A credible net zero commitment covers Scope 1, 2 and 3 emissions, interim targets and a transition plan. Carbon credits should not replace reductions but only offset residual emissions.
Source: SBTi Net-Zero Standard, Paris Anlaşması
Related terms
Scope 1, 2 and 3 emissionsThe classification of greenhouse gas emissions by source into direct emissions (Scope 1), indirect emissions from purchased energy (Scope 2) and other indirect emissions in the value chain (Scope 3).Transition planA strategic plan setting out an entity's targets, actions, resources and timetable for transitioning to a low-carbon economy.Carbon footprintThe total greenhouse gas emissions caused by an organisation, product or activity, expressed in carbon dioxide equivalent (tCO₂e).Carbon Border Adjustment Mechanism (CBAM)An EU regulation that puts a price on the embedded carbon emissions in the production of certain goods imported into the European Union.Climate-related risksThe potential effects on a company's financial position of physical risks arising from climate change and transition risks arising from the shift to a low-carbon economy.Double materialityAssessing sustainability matters both in terms of their effect on the company's financial position (financial materiality) and the company's impact on the environment and society (impact materiality).
Last updated: October 31, 2026 · This definition is for general information only.