#Japan #Tokyo #SBTi #Climate Leadership #Corporate Net-Zero

SBTi's Push for Climate Action in Japan

In an era inevitably marked by climate change, the Science Based Targets Initiative (SBTi) has initiated a vital step towards effective climate action by launching the Japanese translation of its Corporate Net-Zero Standard Version 2.0. This comprehensive document serves as a guide for Japanese companies aspiring to align their operations with scientifically grounded climate goals. Introduced by SBTi—a global organization established in 2015 in collaboration with notable entities such as CDP, UN Global Compact (UNGC), World Resources Institute (WRI), and World Wildlife Fund (WWF)—the new standard underscores Japan’s role as an emerging leader in climate change initiatives, particularly in Asia.

The release of this document is well-timed, as Japan is cautiously transitioning from fossil fuels to clean energy solutions under the current Green Transformation (GX) initiatives. The Japanese version is expected to assist businesses in navigating unprecedented pressures related to transition risks, global supply chain expectations, and reliable decarbonization pathways.

The SBTi's recent data reflects the valuation that corporations place on setting scientifically-grounded targets (SBT). A survey conducted among Asian companies that received their SBT certification over two years ago revealed that a significant 75% strengthened internal strategic alignment and long-term vision. Additionally, 71% found the undertaking advantageous when responding to supply chain and customer demands, with 70% reporting enhanced competitiveness and 80% achieving resilience against future regulations.

Preeti Srivastav, Chief Sustainability Officer at Asahi Group Holdings, emphasized the significance of the Corporate Net-Zero Standard in providing essential tools and frameworks for companies to establish actionable climate strategies. Srivastav stated, “The Corporate Net-Zero Standard Version 2.0 encompasses elements necessary for companies to adopt effective climate actions, illustrating practical frameworks tailored for various business realities while connecting target setting with tangible outcomes.”

The process of developing this comprehensive standard involved extensive public commenting, pilot testing, and approvals from the technical advisory committee and the board. The resulting document aids Japanese corporations in transitioning from ambitious target-setting to practical implementation, embedding climate objectives into core business strategies and decision-making processes. Notable revisions include:

• - Improved Flexibility: The standard allows companies to tailor their net-zero strategies according to their respective sectors, scale, and operational contexts, making it easier to set ambitious yet achievable goals relevant to Japan's economic and energy situations.
• - Focus on Execution and Progress Tracking: It aids Japanese firms in bridging scientific-based pathways with business decision-making, promoting transparency, monitoring of progress, and directions for continual improvement.
• - Mandatory Coverage for Scope 1 Emissions: All companies are required to set targets covering 100% of their Scope 1 emissions, facilitating focused efforts on decarbonizing direct emissions sources.
• - Practical Approach to Scope 2: The document demands emission reductions or low-carbon electricity procurement targets while ensuring that companies are evaluated based on their adherence to sourcing renewable energy round-the-clock.
• - Valuable Approaches for Scope 3 Emissions: Companies are encouraged to prioritize their most material emission sources and act in areas where they can exert the most influence, efficiently managing complex supply chains.
• - Best Effort Approach for Target Achievement: Acknowledging potential external constraints, companies are encouraged to act transparently, disclose obstacles, and leverage all available means to achieve their goals, enabling those struggling with challenges to recalibrate and drive systemic changes effectively.
• - Assessment of Ongoing Emissions Efforts: A new mechanism introduces a way for companies to demonstrate their voluntary measures addressing ongoing greenhouse gas emissions and thus showcases their climate leadership.

SBTi’s CEO David Kennedy remarked on the current pivotal moment in climate action, stating, “We are at a critical juncture in climate change, and businesses require support to translate high goals into tangible actions. This Corporate Net-Zero Standard Version 2.0 is exactly that support. Japan will increasingly play a decisive role in the transition to net-zero. The release of the Japanese version reflects the trust we place in Japan as a leader driving the future of corporate climate action.”

The implemented features of this standard are now accessible to both companies that have already set science-based targets and those still utilizing the earlier version of the Corporate Net-Zero Standard. For detailed case studies, such as that of Asahi Group Holdings, interested parties can download additional materials.

Understanding SBTi

The SBTi’s mission is to advance corporate climate action globally, establishing criteria, tools, and guidance necessary for companies aiming to curb greenhouse gas emissions. Committed to limiting the global temperature increase to below catastrophic levels and achieving net-zero by 2050 at the latest, SBTi operates as a registered charity in the UK, managing validation services through its subsidiary, SBTi Services Limited.