Issue link: https://resources.tangoanalytics.com/i/1538218
Copyright © 2025 Tango. All rights reserved. www.tangoanalytics.com Net Zero in the Built Environment What Net Zero Actually Means "Net zero" is often used as a catch-all term, but in practice, it has a very specific meaning. A company reaches net zero by reducing greenhouse gas (GHG) emissions across an organization's entire value chain as much as scientifically feasible, and permanently removing the small remainder to achieve a balance between emissions produced and removed from the atmosphere. Under the SBTi Corporate Net-Zero Standard, at least 90–95% of emissions must be reduced before a company can claim net zero status. Residual emissions must be neutralized using long-term carbon removal, not avoided emissions or temporary offsets. The two core components of net zero: 2 What is SBTi? A Global group that provides companies with the necessary standards, tools, and guidance to determine how much and how fast they need to reduce GHG emissions to align with efforts from the latest climate science and limit warming to 1.5 degrees Celsius. Deep emissions reductions across Scope 1 (direct emissions), Scope 2 (indirect emissions of purchased energy), and Scope 3 (indirect emissions from the value chain). Neutralization of residual emissions (typically <10%) through high-quality, permanent carbon removal methods and not simply offsetting. Required elements of a valid net zero commitment To meet the expectations of leading standards bodies (e.g., SBTi), companies must: Include Scope 3 emissions if they represent more than 40% of total emissions (which they typically do). Neutralize residual emissions via high-quality, permanent carbon removal (e.g., direct air capture, reforestation with long-term permanence). Avoid reliance on avoided emissions or offset purchases that do not meet permanence and additionality requirements. 1. 2. Set near-term targets (5–10 years) to cut Scope 1 and Scope 2 emissions and begin addressing material Scope 3 categories. Set a long-term target aligned with reaching net zero by no later than 2050. 3. 4. 5. A one-time certification. It's an ongoing process that must be monitored and adjusted regularly. An excuse to delay Scope 3 action. Phased approaches are accepted, but material categories must be addressed. Achievable through offsets alone. Under current standards, offsetting does not count toward net zero; only neutralization of residuals does. What Net Zero Is Not