By Shadia Nasralla

LONDON (Reuters), A U.N.-backed entity launched a scheme on Thursday to check corporates’ net zero strategy. It is likely that this will become a standard for investors and regulators in measuring companies’ climate ambitions.

With rising investor and societal pressure on companies to reduce emissions to keep global warming below 1.5 degrees Celsius (2.7°Fahrenheit) above pre-industrial levels, firms have come up with multiple ways to express climate strategies.

Science Based Targets (SBTi), which is a joint collaboration between the United Nations as well as non-governmental agencies that focus on commodities and climate, seeks to make corporate climate commitments more comparable and credible.

Alberto Carrillo Pineda (Managing Director, SBTi) stated that the SBTi’s Net-Zero Standard gives companies a strong certification which allows them to show investors, consumers and regulators that they are meeting their targets.

“We’re now inviting all companies with net-zero targets and ambitions to show stakeholders that their decarbonisation pathway is aligned with science.”

The SBTi must be convinced by large companies that they can reduce their carbon emissions to half before 2030, and remove 90-95% before 2050, compared to the base year of 2015.

Scope 1 & 2 refer to greenhouse gas emissions from companies’ direct operations. Scope 3 refers to the reductions made by Scope 3 (suppliers and end-users).

Many companies have signalled they would rely heavily on carbon offsets https://www.reuters.com/business/sustainable-business/carbon-offsets-gird-lift-off-big-money-gets-close-nature-2021-02-25 to get to net zero, which means buying or creating carbon offsets in an as-yet small and unregulated market for such certificates.

However, to be approved by the SBTi, offsets can only cover 10% of a company’s emissions.

Only carbon removal projects such as direct aircarbon capture and reforestation, will count for the 10% plus.

It will not be possible to avoid deforestation, or capture carbon from smokestacks. This is called carbon capture and storage.

Participants in pilot schemes include Orsted (Danish renewable power company), CVS Health (NYSE) and JLL real estate group. Dentsu International is a Swiss public relations firm. Holcim (SIX:) and Indian digital service provider Wipro (NYSE: ) satisfied the requirements.

Some industries, like forestry and agriculture or oil and gas, will need to wait for next year in order to submit strategies to verification.