How to create a credible net-zero strategy

“Net zero” used to be a slogan. Now it is a test of whether a company is serious, or just painting its reporting green.

A credible net zero strategy is not a slide deck or a press release. It is a plan that connects science, operations, capital and governance over decades. The good news: there is now enough guidance to know what “good” looks like. The bad news: it requires real work.

This article walks through the core building blocks of a net zero strategy that can stand up to scrutiny from investors, regulators and NGOs.

1. Start with science, not slogans

A net zero strategy has to be anchored in climate science, not in whatever target sounds nice in marketing.

The most widely used reference today is the Science Based Targets initiative (SBTi), which provides the Corporate Net-Zero Standard – a framework for setting near- and long-term targets aligned with limiting warming to 1.5°C. Science Based Targets Initiative+2files.sciencebasedtargets.org+2

In parallel, the UN’s Race to Zero campaign defines core criteria for credible commitments, often summarized as the “5 Ps”: Pledge, Plan, Proceed, Publish, Persuade. In short: commit, build a plan, act, disclose progress and use your influence. climateaction.unfccc.int+2climatechampions.net+2

A strategy that ignores these reference points is likely to be viewed as out of date or intentionally vague.

2. Map your emissions properly (Scopes 1, 2 and 3)

You cannot manage what you do not measure. The foundation of any net zero strategy is a full greenhouse gas inventory following the Greenhouse Gas Protocol or equivalent standards.

Emissions are typically grouped into three scopes: ghgprotocol.org+2National Grid+2

• Scope 1 – direct emissions from sources the company owns or controls (e.g. fuel burned on site, company vehicles).

• Scope 2 – indirect emissions from purchased electricity, heat, steam or cooling.

• Scope 3 – all other indirect emissions across the value chain, both upstream and downstream (purchased materials, logistics, product use, waste, business travel, financed emissions and more).

For many businesses, especially in finance, retail, food and consumer goods, Scope 3 dominates the footprint. Ignoring it is the fastest way to lose credibility.

A robust baseline requires:

• Clear organizational boundaries (what entities and activities are included).

• Transparent methodology and data sources.

• Documentation of assumptions and gaps, especially where estimates are used.

3. Set science-based near- and long-term targets

A credible net zero strategy separates near-term targets (next 5–10 years) from long-term net zero targets (e.g. 2040–2050), and links both to a science-based pathway.

Good practice includes: files.sciencebasedtargets.org+2files.sciencebasedtargets.org+2

• Near-term targets (typically 5–10 years):

  • Focus on rapid, absolute emissions reductions across Scopes 1, 2 and material Scope 3 categories.

  • Use 1.5°C-aligned trajectories, not “well below 2°C”.

• Long-term net zero targets (mid-century or earlier):

  • Cover the full value chain (all relevant scopes).

  • Limit residual emissions to a small fraction of the baseline, to be neutralized with permanent removals.

Targets should be:

• Absolute, not only intensity-based.

• Backed by interim milestones (e.g. 2028, 2032) so progress can be tested.

• Where possible, validated by an external body (e.g. SBTi) or benchmarked against peers.

“Net zero by 2050” without quantified interim targets is, at this point, mostly a red flag.

4. Build a real abatement plan in your own value chain

Once the targets are set, the strategy has to answer a simple question: what exactly will change in the business to get there?

A credible abatement plan:

1. Prioritises direct reductions.
   Across standards and expert groups, there is strong convergence that companies must cut emissions within their own value chains as the first priority. Offsetting cannot substitute for delayed decarbonization. zerotracker.net+1

2. Breaks down reductions by lever and by business unit.
   Typical levers include:

   • Energy efficiency and process optimisation

   • Electrification of heat and transport

   • Switching to renewable energy (PPAs, on-site generation)

   • Low-carbon materials and product redesign

   • Logistics optimisation and modal shifts

   • Supplier engagement and procurement criteria

3. Includes CapEx and OpEx implications.
   Decarbonization is a capital allocation question. A plan that ignores investment needs is not a plan.

4. Aligns incentives.
   Executive remuneration, internal carbon pricing and performance metrics should reflect climate objectives, not contradict them.

5. Use offsets and removals carefully, as a last step

Offsets are the quickest way to lose reputational capital if misused. Recent guidance such as the Oxford Principles for Net Zero Aligned Carbon Offsetting and various net zero frameworks emphasize a hierarchy: Net Zero Climate+3Nature-based Solutions Initiative+3smithschool.ox.ac.uk+3

1. Reduce first. Minimise the need for offsetting by cutting emissions within the value chain as far and as fast as possible.

2. Use high-quality credits only. Offsets should be:

   • Additional (would not have happened without the project)

   • Measurable and verified

   • Permanently stored, with low risk of reversal

   • Safeguarded against double counting and with strong social and environmental co-benefits

3. Evolve from avoidance to removals.
   Over time, portfolios should shift from avoidance/reduction credits to carbon removals, especially for neutralising residual emissions at the net zero date.

Nature-based solutions, such as reforestation or regenerative agriculture, can play a useful role, particularly where projects generate revenue and measurable co-benefits. However, they have to be structured transparently, with clear ownership, rights and monitoring, not as vague “tree planting” narratives.

6. Put governance and disclosure at the centre

A strategy is only as strong as the governance behind it.

Elements that typically support credibility:

• Board oversight.
  The board or a dedicated committee formally oversees climate strategy and risk.

• Clear management accountability.
  Senior executives have defined responsibilities and, ideally, variable compensation linked to climate targets.

• Integrated risk management.
  Climate risks (transition, physical, legal, reputational) are embedded in enterprise risk frameworks, not treated as a separate sustainability file.

• Public disclosure.
  Reporting aligned with frameworks such as TCFD or ISSB climate standards, including:

  • Full emissions inventory and methodology

  • Targets and pathways

  • Progress, shortfalls and course corrections

Campaigns like Race to Zero explicitly require members to publish their progress regularly, not just their ambition. climatechampions.net+2mycarbon.co.uk+2

7. Connect net zero to business model and growth

A credible strategy is not a sustainability annex; it affects what the company does and how it makes money.

That means:

• Identifying products and services that are misaligned with a 1.5°C pathway and planning their managed phase-down or transformation.

• Developing new lines of business that benefit from the transition: low-carbon products, enabling technologies, financing of real-world decarbonization projects, nature-based solutions and more. Exponential Roadmap Initiative+1

• Ensuring that capital allocation, M&A and lending or underwriting decisions are consistent with the net zero pathway, not in conflict with it.

Investors have become increasingly skeptical of strategies that rely on “business as usual plus offsets,” especially in high-emitting sectors. Recent debates around sector-specific standards and alliances show that the tolerance for vague plans is shrinking, even if implementation politics remain complex. Reuters+2Reuters+2

8. Avoid the common credibility traps

Several patterns show up repeatedly in “net zero” plans that fail the smell test:

• No Scope 3 coverage in sectors where value chain emissions are material.

• Intensity-only targets without absolute reductions, while total emissions keep growing.

• Heavy reliance on cheap avoidance offsets instead of concrete decarbonization measures.

• No interim milestones, just a 2050 aspiration.

• Climate commitments that sit in sustainability reports but do not appear in strategy, budgeting or remuneration.

If a plan fits any of these descriptions, stakeholders will treat the net zero claim as marketing.

9. From commitments to execution

Creating a credible net zero strategy is ultimately about aligning three things:

1. Scientific benchmarks – pathways consistent with 1.5°C and widely accepted guidance.

2. Operational decisions – technologies, suppliers, products and processes.

3. Financial and governance structures – who decides, who is accountable and how capital is deployed.

Companies that treat net zero as a real, long-term transformation tend to move from offset purchases and isolated projects toward owning or financing real decarbonization assets: renewable energy, efficiency, low-carbon infrastructure and high-integrity nature-based solutions.

Those assets can generate both economic value and climate value, provided they are structured transparently and backed by data and independent verification.

In other words, a credible net zero strategy does not depend on perfect forecasts or heroic assumptions. It depends on measurable reductions, clear rules, honest disclosures and real assets behind the story.