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Copyright © 2025 Tango. All rights reserved. www.tangoanalytics.com Net Zero in the Built Environment The 4 Pillars of a Credible Net Zero Strategy A net zero commitment only matters if it comes with a concrete, science-aligned execution plan. Under the current SBTi framework, four key components define a valid and credible net zero strategy. Three are required. The fourth is strongly recommended. 4 Pillar 1: Set Near-Term Science-Based Targets (Required) Near-term targets (typically 5–10 years out) are designed to drive immediate reductions and operational changes. These targets: Focus on Scope 1 and Scope 2 emissions and select Scope 3 categories. Must align with 1.5°C pathways, using SBTi's sector- specific or cross-sector tools. Are expected to cover at least 95% of total Scope 1 and 2 emissions and 67% of Scope 3 emissions if Scope 3 is material. This phase is where most organizations begin: by identifying their highest-impact emission sources, benchmarking baseline performance, and establishing measurable targets for emissions reductions in the short term. Pillar 3: Neutralize Residual Emissions with Carbon Removal (Required) Companies are expected to neutralize any emissions that cannot be eliminated through operational or supply chain transformation. Requirements include: Only carbon removal methods count (e.g., direct air capture, enhanced weathering, reforestation with permanence). Avoided emissions and avoided deforestation do not qualify for net zero claims. Neutralization is expected to represent <10% of total baseline emissions. This step must not be used as a substitute for reductions. It's a final-phase component, not a shortcut. Pillar 2: Set a Long-Term Net Zero Target (Required) A long-term target defines the organization's endpoint, typically a 90–95% absolute emissions reduction across all scopes by no later than 2050. These targets must: Cover Scopes 1, 2, and all material Scope 3 emissions. Represent deep decarbonization beyond status quo operations with offsetting. Include a clear plan for emissions that cannot be eliminated, with guidance on how and when those residuals will be neutralized. Note: As of 2025, SBTi has begun pushing for interim milestones every five years to validate that progress toward the long-term goal is on track. Pillar 4: Support Beyond-Value-Chain Mitigation (Recommended) SBTi encourages organizations to go further by financing climate solutions beyond their own operations. Examples include: Investing in low-carbon innovation (e.g., sustainable materials, carbon removal R&D). Supporting community-scale renewable projects or grid decarbonization. Providing capital to accelerate supplier transformation where feasible. While not required for official net zero validation, these efforts contribute to broader climate impact and are increasingly expected by stakeholders.

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