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The Net-Zero Needle Movers
The Net-Zero Needle Movers
With the UK launching transition plan consultations and the Science Based Targets initiative (SBTi) set to update its Net-Zero Standard, you’d be forgiven for thinking businesses might be in a ‘wait and see’ mode for decarbonisation. As this section proves, that is very much not the case.
The big story coming out of early summer was the UK Government’s announcement that it would consult on how to help companies plot a course to a net-zero future, while supporting the nation’s wider clean energy and finance ambitions.
The consultations explore how the Government can support markets to spur investment into clean energy, how new UK Sustainability Reporting Standards will be introduced to create investor information on climate-related financial parameters, and how to develop a voluntary registration regime to provide assurances for sustainability reporting.
The Government’s approach will take forward recommendations from last year’s Transition Finance Market Review, which outlined how the UK should introduce new guidelines for transition finance, improve resources for the Net Zero Council, create a Transition Finance Lab to develop financial solutions and innovations, and implement mandatory transition plan uptake, aligned with Transition Plan Taskforce guidance.
While new guidance on transition plans is welcome, we’re already seeing the first movers publish their transition plans.
edie Members, including OVO, BBC, and BT have all published ambitious and detailed plans that outline what can be achieved, and how externalities such as policy will need to change if a net-zero transition is to be delivered.
As for edie’s wider audience, 50% have introduced what they state is a 1.5C-aligned Climate Transition Plan, suggesting that these strategic documents are becoming more commonplace in the private sector.
Additionally, more businesses are turning their focus to Scope 3. Scope 3 targets are a requirement under the SBTi Net-Zero Standard. Under the SBTi Criteria: if a company’s Scope 3 emissions are 40% or more of total emissions, then a Scope 3 target is required.
Currently, around 52% of survey respondents have targets in place, with a further 24% stating they will introduce a Scope 3 target this year.
There is the possibility that updates to the SBTi’s Net-Zero Standard – expected in early 2026 – could change what gold-standard advice looks like for corporate targets.
The SBTi published an initial draft of its revised Corporate Net-Zero Standard for consultation in March, confirming that it wants to tweak a requirement for companies to aim for a 90% reduction in Scope 3 emissions.
The SBTi has said that the changes are needed to drive more real-world decarbonisation by tackling shared barriers to target-setting and delivery. Moreover, it wants the Standard to be more interoperable with other emerging voluntary and regulatory frameworks.
The Standard currently requires businesses to commit to a 90% reduction in their absolute Scope 3 emissions by 2050 or sooner. This is known as a ‘fixed boundary’ approach.
Under the draft, while businesses would still be required to set near-term targets covering “all relevant” sources of Scope 3 emissions, they would have flexibility on setting long-term targets. They could choose to either set absolute emissions targets aligned with global net-zero by 2050; set intensity-based emissions targets aligned with global net-zero by 2050; or set targets to increase the “level of alignment of the category, activity, or value chain counterparty” with global net-zero by 2050.
The SBTi is also proposing a recommendation or requirement for all companies aligning with the Standard to produce a transition plan. Transition planning is already set to become mandatory for thousands of firms doing business in the EU, under the Corporate Sustainability Reporting Directive (CSRD).
Only 55% of respondents to edie’s survey were aware that the SBTi was updating its standard. Of those who were aware, two-thirds (64%) of sustainability professionals believe the proposed changes will help overall efforts to reach net-zero.
While businesses wait for the update, many are forging ahead with their priority areas for decarbonisation. Despite a lack of investment and funding being a major barrier (as highlighted in the executive summary, and explored in the next section of this report) businesses are turning to energy efficiency measures and staff behaviour change, and energy management optimisation to start to deliver improvements to decarbonisation.
In total, 56% listed energy efficiency upgrades as a high or business-critical priority, followed by staff engagement and behaviour change (55%), Scope 3 and supplier emissions (53%), and energy data management optimisation (51%).
Q. How much of a priority is your organisation currently placing on each of the following areas of decarbonisation?
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