The Science-Based Targets Initiative is Adopting Carbon Capture Strategies
In the modern world, reaching net-zero emissions isn't just an aspiration, it's a deadline. Yet, an alarming number of corporations treat it like a distant goal, banking on future carbon removals instead of taking action today. The consequence? Delay makes solutions more complicated, costs escalate, and climate risks become more formidable. Carbon removal solutions need to be integrated into corporate strategies today, not as a last-ditch effort.
The Science Based Targets initiative (SBTi) has been pioneering sustainable corporate climate action, and now they're evolving their approach. The previous strategy—removal at the finish line—is not sufficient anymore. The new course? Interim targets that force businesses to ramp up removals alongside deep emissions cuts.
Businesses have chronically regarded carbon removals as a "later" problem. However, removals do not operate like a magic wand. Direct air capture remains expensive, with current prices ranging from $600 to $1,200 per ton of CO removed, and limited operational plants globally. Even natural solutions, such as reforestation, take years to deliver and require vast tracts of land—around 900 million hectares globally by 2050—to be impactful.
Corporations must commit to measurable advancements in removal techniques by 2030, not just 2050. The shift from vague long-term promises to near-term actions is crucial. Companies delaying to invest now face a bleak future, scrambling for pricey, scarce remedies down the line.
This is not just an environmental responsibility, but a financial one too. Long-term institutional investors, including pension funds and asset managers, are making carbon removals prerequisites for capital access. Investors managing trillions in assets are increasingly linking funding decisions to clear, accountable net-zero pathways, with carbon removals holding a significant role.
Without interim targets for removals, corporations might find themselves excluded from capital markets, as investors demand credible climate action. According to institutional investors holding $1.5 trillion in assets, asset managers must boost climate action or risk losing backing. Companies failing to integrate removals risk losing access to long-term development funds and experiencing valuation discounts due to perceived climate risk.
What Changes are Coming to Climate Standards?
SBTi is revising its Corporate Net-Zero Standard, launching public consultations and establishing expert working groups in 2025. The objective? A stronger, clearer framework pushing for tangible action, instead of just distant commitments. Key changes include:
- Interim Removal Targets: A structured roadmap encouraging businesses to implement removals now.
- Enhanced Scope 3 Strategies: Addressing value chain emissions, which account for 70-90% of most companies' total carbon footprint.
- Fortified Transparency: Real progress reporting, rather than far-off targets with no accountability.
- Interoperability: Aligning with other climate frameworks to devise a coherent global approach.
This marks a transformative period. It's no longer sufficient to promise emissions cuts and hope removals will be available decades down the road. Companies must now devise a clear, phased strategy for integrating removals alongside forceful emissions reductions.
The Cost of Delay
Carbon removal solutions are not infinite. High-quality removals will grow increasingly expensive as demand rises, leading enterprises hesitating to face a fierce battle for scarce resources when they need them most.
Consider the technology race underway. Direct air capture companies are scaling up, with predictions for costs dropping to $100-$200 per ton by 2050, although these reductions hinge on early investment. Nature-based solutions like forest restoration need scarce land already in high demand for agriculture and development, with some estimates suggesting 20% of global cropland may be needed for large-scale reforestation.
The financial risk extends beyond removal costs. Regulations surrounding corporate climate disclosures worldwide are intensifying. The European Union's Corporate Sustainability Reporting Directive will require over 50,000 companies to report detailed climate data starting in 2024. Switzerland introduced corporate milestone targets for carbon removals, and Canada published the world's first government-backed direct air capture protocol. Companies delaying action may find themselves unprepared for the new reporting and regulatory requirements.
Corporate Leaders Need to Act
The upcoming consultation provides an opportunity for businesses to shape a standard that works. Companies committed to net-zero must engage now—this isn't just about ticking a box. It's about implementing genuine, measurable, and scalable climate action.
Early adopters of interim removal targets will not only stay ahead of regulatory trends but gain competitive edges. Businesses taking action today will gain access to the best removal projects, secure long-term partnerships, and establish themselves as climate leaders.
On top of that, companies making early investments in removals will help drive innovation and cost reductions. Similar to how commitments to renewable energy helped bring down the costs of wind and solar power—solar costs plummeted 89% from 2009 to 2019, and wind power costs decreased 70%—companies integrating removals now will contribute to scaling up solutions that benefit the entire market.
The road to net-zero must be proactive, not reactive. Carbon removals are no longer a future problem—they are an immediate corporate responsibility. Companies lagging behind will bear the consequences—financially, competitively, and reputationally. Those acting today will blaze the trail in the new era of corporate climate accountability.
The time for action isn't 2050. It's now.
- To meet the net-zero deadline, corporations need to integrate carbon removal solutions into their strategies today, not as a last-ditch effort, considering the complications, escalating costs, and strengthening climate risks associated with delay.
- The Science Based Targets initiative (SBTi) acknowledges the need for interim targets for removals, encouraging businesses to take action now rather than relying on future carbon removals, and boosting transparency in reporting progress.
- Direct air capture, currently expensive with prices ranging from $600 to $1200 per ton of CO removed, and limited operational plants globally, may become scarcer and more expensive as demand increases, making early investment crucial.
- SBTi is revising its Corporate Net-Zero Standard, launching public consultations in 2025, to establish a stronger, clearer framework encouraging tangible action and enhancing the scope of emissions strategies, accountability, and interoperability with other climate frameworks.
- Early adoption of interim removal targets by businesses will provide competitive advantages, offering access to the best removal projects, securing long-term partnerships, and establishing a reputation as climate leaders, driving down costs of removals for the entire market.
