Your transition to carbon neutrality

Your transition to carbon neutrality

Your transition to carbon neutrality 752 564 Greengage Environmental

Over the last two decades, the world has seen a paradigm shift in the way we operate and think about our impact on the environment. With increased investor demand and a more conscious client base, businesses are recognising their responsibility to measure and report direct and indirect impact on the environment and are setting out clear decarbonisation pathways in their strategy.

PAS 2060 is an internationally recognised carbon neutrality standard developed by the British Standard Institute (BSI). Carbon neutrality means not adding new greenhouse gas (GHG) emissions to the atmosphere. Where emissions continue, they must be offset by absorbing an equivalent amount from the atmosphere, for example through carbon capture and reforestation that is supported by carbon credit schemes.

Carbon neutral claims have received considerable amount of scepticism in the past. Most recently, Delta Air Lines [1] had to pay damages to customers for misleading carbon neutral statements in campaigns that warranted customers paying a higher price. Alignment with PAS 2060 increases the transparency of carbon neutral claims with trusted and credible global standards infrastructure. It is the only credible Carbon Neutral Standard that helps break through the heavy mist of empty environmental claims and joins the fight against greenwashing.

In order to set out clear decarbonisation pathways at an organisational level, companies can opt to achieve carbon neutrality with PAS 2060 Standard or set out a Science Based Target to limit global warming to 1.5°C. The main difference between the standards is that certifying to PAS 2060 allows companies to claim they are carbon neutral, and committing and achieving Science Based Targets allows companies to claim they have achieved ‘Net Zero’.

PAS 2060 provides guidance to companies on how to quantify, reduce and offset GHG emissions in a specified business area. The standard presents four key stages to achieving carbon neutrality. This includes the following 4 steps:

PAS 2060 4 steps

Science-Based Targets initiative (SBTi) provides companies with clearly defined pathways to reduce emissions in line with the Paris Agreement goals by limiting global warming to 1.5° C. The launch of the SBTi Net Zero Standard [2] ahead of COP26 in 2021 was a milestone. The standard requires companies to make rapid and deep emissions cuts, through setting both near-term and long-term Science-Based Targets. To achieve Net Zero, organisations are required to achieve a 90% reduction in line with latest climate science, where only 10% of emissions can be offset using carbon capture and storage technologies.

Carbon neutrality includes a wider definition of offsetting residual emissions, including emissions avoidance activities, and wouldn’t prescribe a specific reduction trajectory. It’s also less prescriptive regarding the reporting boundary, with the inclusion of wider value chain (Scope 3) emissions being encouraged but not mandatory.

The purpose of this article is to highlight key differences and similarities between the two decarbonisation approaches and let companies make informed decisions on which approach is best suited for their business.

The key differences between PAS 2060 and SBTi are shown in the table below.

Differences PAS 2060 and SBTi

PAS 2060 – Pros and cons

1. Flexibility

SBTi offers a more robust framework for decarbonisation in comparison with PAS 2060. However, it is not suitable for companies who are unable to reduce emissions at a higher reduction rate (e.g. minimum trajectory requirement for SMEs is based on a 4.2% annual reduction aligned with 1.5 °C across all scopes). Greengage has recently worked with an engineering consultancy where 79% of their carbon emissions derived from travel. This was predominantly due to the nature of the business, reliant on its ability to work with clients and do in-person site surveys and inspections. In this case, PAS 2060 offers a more flexible option to set realistic reduction targets and embed this into a company’s Carbon Management Plan (CMP). Once significant reductions are realised and set as part of CMP, verifiable offsets can be used to achieve a carbon neutral status at the end of each annual cycle.

2. Short-term focus on emission reduction targets

PAS 2060 allows companies to have a shorter-term focus on emission reduction targets in comparison with SBTi. Science Based Targets can be achieved when an absolute 90% reduction of emissions has been achieved in line with global Net Zero ambitions to align with 1.5 °C by 2050 (almost 27 years from now). The long-term and transformational nature of the SBTi has its benefits and demerits. While it allows a long-term projection into the future, some companies, due to factors including unforeseen growth or lack of resources, can derail achieving set targets. PAS 2060 allows companies to achieve a carbon-neutral status at the end of each annual cycle.

3. Use of carbon offsets

The SBTi framework does NOT allow the use of carbon offsets as part of achieving carbon reduction targets. Up to 10% of unabated residual emissions can be neutralised using carbon capture and sequestration technologies in the final year of achievement of long-term Net Zero ambition (i.e. 2050) using Direct Air Capture (DAC) and Reducing Emissions from Deforestation and Forest Degradation (REDD+). These technologies however have not reached scalability due to lack of adequate demand.

4. Mitigation takes precedence

It is important to note that carbon neutrality with PAS 2060 cannot be achieved using offsets alone. The entire premise of achieving a carbon neutral status with PAS 2060 banks on mitigating emissions first (i.e. through improvement in data capture, energy efficiency measures and switching to renewable energy, and reducing travel etc). Once significant carbon reductions have been realised, only then can verifiable offsets be used to achieve carbon neutrality at the end of each annual cycle. The significant reductions will be achievable from company to company.

5. Verified offsets

Carbon offsetting projects can provide cross-sector benefits to the environment and communities around the world. However, carbon credits have come under scrutiny due to lack of transparency and double counting. As a result, there is a risk associated with investing in such projects due to integrity and quality concerns for the private sector. PAS 2060 only allows using verified carbon offsets with credible third-party offsetting providers. The carbon offsets allowed by PAS 2060 Standard can be Kyoto compliant using Clean Development Mechanism, Non Kyoto compliant using Gold Standard and Voluntary Carbon Standard, or use domestic schemes such as Woodland Carbon Code [3] and Verified Carbon Standard [4]. Offsetting can be applied to client projects from an embodied and operational carbon perspective in line with the UKGBC guidelines [5].

6. Beyond Value Chain Mitigation

SBTi encourages companies to invest in initiatives that fall outside of a company’s value chain (Beyond Value Chain Mitigation or BVCM) [6]. While SBTi does not allow the use of offsets to achieve their reduction targets, companies can use PAS 2060 in conjunction with SBTi to support Beyond Value Chain emissions (BVCM) by investing in high quality carbon credits that qualify under BVCM (e.g. Cookstoves projects [7] for energy efficiency and Peatland terrestrial forests [8] or mangroves for restoration).

7. Frequency

PAS 2060 requires an annual review and update of GHG inventory to allow any changes to the organisational structure (such as mergers, acquisitions or divestments) or any historic reductions (due to retired credits within the last 12 months), providing an opportunity for companies to frequently measure and reduce carbon each year. SBTi encourages companies to re-baseline and verify emissions at least every 5 years, or when there are significant material changes to the company (e.g. business growth).

8. Work in conjunction

PAS 2060 works equally well alongside Science Based Targets (SBTi). Both frameworks advocate carbon mitigation first before entering the neutralisation phase. Greengage has worked with a real estate and construction consultancy that decided to align with PAS 2060 and SBTi for the unique benefits both frameworks offer. PAS 2060 allows flexibility and a good starting point for companies starting out on their decarbonisation journey.

9. Defined subject

PAS 2060 Standard can be applied to a defined subject (products, activities, events, buildings etc) in contrast to having a company-wide focus with SBTi. In July 2022, events venue ExCeL London [9] took a significant step on its journey to become Net Zero by becoming Carbon Neutral Certified with PAS 2060 for its events.

10. Update required

The last revision to PAS 2060 Standard was in 2014. To keep up with the fast-moving climate trends, it is crucial updates are made to the guidance. On the contrary, Science Based Targets are continuously monitoring the market trends and making updates to guidance. In April 2023, SBTi published updates to SBTi Corporate Net-Zero Standard and SBTi Corporate Net-Zero Standard Criteria, SBTi Criteria for Near-term Targets, SBTi Corporate Manual, Target Validation Protocol and Target Validation pricing.

SBTi has made headways into developing the next sector specific guidance on Building [10]. The SBTi Building Sector Science Based Target-Setting Guidance (draft version) was released on December 12, 2023 and is currently holding a pilot phase for companies and financial institutions in the buildings value chain to test the Buildings Science-Based Target-Setting Guidance and Tool Drafts for Pilot Testing.

Key takeaways

By aligning with the UN Sustainable Development Goal 13, PAS 2060 plays an active role towards taking urgent action to combat climate change and its impacts caused by carbon emissions.

  • It is a credible standard and promotes transparency by using verifiable carbon offsets by verified independent third-party providers. PAS 2060 standard officially recognises an organisation’s climate efforts and clearly indicates with evidence, the aspects of activity that are proven to be carbon neutral. It’s a display of corporate social responsibility and clear, verified proof of the fight against climate change.
  • By anticipating future policies and regulations to limit carbon emissions, organisations can positively differentiate from others. Disclosure and communication are key elements of PAS 2060. Companies can use the standard to inform and motivate their audience to take responsibility for the impact of their business operations on the climate and the wider environment.
  • To maintain a carbon neutral status, companies are encouraged to do an annual verification with PAS 2060.

As part of its ongoing internal sustainability actions, Greengage has committed to achieving carbon neutrality with PAS 2060 and developed a Carbon Reduction Strategy for 2023 based on its own carbon footprint.

How can we help?

Greengage is supporting companies to achieve carbon neutrality with PAS 2060. If you would like to speak to us about understanding how the PAS 2060 framework can be applied to your organisation, please contact:

ayesha.farooq@greengage-env.com

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