The Science Based Targets initiative (SBTi) has revised the Absolute Contraction Approach (ACA), the methodology companies use to calculate near-term emissions reduction targets. The update brings the method into line with the direction proposed for version two of SBTi's Corporate Net-Zero Standard, which is still under development.
A team of analysts examining emissions data while industry and reforestation efforts are unfolding outside the window. AI generated picture.
The ACA determines the annual rate at which a company must reduce its absolute emissions between a chosen base year and its net-zero target date. Under the revised method, those annual reduction rates are adjusted based on how much time a company has remaining before its net-zero deadline.
The core requirements stay the same. Companies must still reach net zero by 2050 or earlier, and the minimum annual reduction rate floor of 4.2% remains in place.
‘The refinement of the Absolute Contraction Approach is a targeted technical update to how near-term emissions reductions are calculated by adjusting the annual reduction rates based on the time a company has to reach net-zero from its chosen base year,’ SBTi said.
The reason for the change is practical. SBTi acknowledged that the earlier version of the ACA was designed for companies setting targets in the early 2020s, and that it now ‘results in increasingly prohibitive reduction rates for those setting targets now.’
‘What has changed is how this ambition is calculated and phased over time,’ SBTi said.
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The revised method is not new in principle. It was consulted and pilot-tested as part of the Corporate Net-Zero Standard version 2 development process, conducted in accordance with SBTi's Standard Operating Procedure for the Development of Standards. Its application to version 1.3 of the Corporate Net-Zero Standard was treated as an urgent revision given the implications for companies setting targets from 2026 onwards. The SBTi Technical Council, the independent body responsible for reviewing and approving normative technical decisions, has formally approved the update. No criteria of the Standard have changed.
In practical terms, the update requires no new data or inputs from companies. Updated tools within the Validation Portal apply the revised calculation automatically. Companies may choose to update their targets, though no action is required for those with already validated targets. The update sets a minimum ambition threshold; more ambitious targets remain encouraged.
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