GH2: Net Zero Targets
Prefill
Eligible
Validation
Automatic; Evidence not validated
Does the entity have a GHG emissions reduction target aligned with Net Zero?
Is the target aligned with a Net Zero target-setting framework?
Assessment Instructions
Intent: What is the purpose of this indicator?
This indicator assesses GHG emission target setting, including current- and future-year emissions targets and Net Zero targets.
Net Zero targets are considered a key part of an entity’s decarbonization strategy. They can strengthen investor confidence regarding the entity’s decarbonization strategy and guide the entity in its transition to a low-carbon economy.
GRESB assesses the existence of Net Zero targets and collects additional information on understanding the target’s underlying characteristics and the methodology used to set them. It does not judge or score the ambition of the target or the underlying characteristics of the target.
The data reported in this indicator informs the IIGCC Net Zero Investment Framework (NZIF) alignment report. Any Asset Assessment participant can receive the NZIF alignment report by providing additional data required in the NZIF Alignment Module.
Input: How do I complete this indicator?
Select Yes or No: If selecting 'Yes', then the following subsections must be completed to detail the characteristics of the target.
Data
Instructions
Target Scope
Participants must define the scope of their net zero targets (e.g., Scopes 1 and 2, or Scopes 1, 2, and 3).
The ‘Scopes 1, 2, and 3’ option refers to target setting exercises with quantitative Scope 3 targets. These targets are combined using the same quantitative metric into an aggregate Scope 1, 2, and 3 quantitative target.
In the case that a Scope 3 target exists, but that the Scope 3 target is qualitative in nature (e.g., a supplier engagement target), this does not fall into the ‘Scope 1, 2, and 3’ option. Without a combined quantitative target for all three Scopes, the Participant is meant to select the ‘Scope 1 and 2’ option.
Scope 2 method
Participants must define the Scope 2 accounting method used in their net zero targets (i.e., location-based or market-based)
Selecting market-based as the Scope 2 method for Net Zero target setting requires reporting of current year market-based emissions in GH1 to achieve the score associated with Net Zero target setting.
Target Metrics
Participants must specify the metric used (e.g., absolute emissions in tonnes CO2e or intensity metrics such as CO2e per unit of revenue).
If selecting ‘Other’ (i.e.. if the Participant uses a metric for target setting that is not able to be calculated by GRESB based upon other data provided), participants must report:
the intensity metric used
the value of the intensity metric’s denominator for the reporting year
Base year, metric, and value
Participants must provide a base year. The base year must be between 2015 and the reporting year (inclusive). Participants must provide the value of the metric in the base year.
Targets
Scored and mandatory: To achieve the score associated with net zero target setting, Participants must report (year and reduction target) for 2 out of 3 of the following targets:
Short-term
Medium-term
Long-term
Carbon Offsets (Optional)
Participants may disclose the percentage of carbon emissions (short-, medium-, and/or long-term) expected to be achieved through offsets.
For example, if the targets are based on absolute emissions, and the base year value is 100 tonnes of CO2e, and the long-term target year is 2050 with a reduction percentage of 90%, then the calculated targeted emissions would be 10 tonnes of CO2e. If the entity expects to offset all 10 tonnes of CO2e for 2050 (the long-term target year), then the carbon offset percentage should be input as 100%. However, if the entity expects to offset 8 tonnes of CO2e in 2050, then the carbon offset percentage should be input as 80%, since 8 tonnes is 80% of the expected 10 tonnes for the target year.
Third-party target validation
The target has been reviewed in a structured and consistent manner by an independent third party.
Public availability of target
List whether the target is publicly available. If so, provide the hyperlink.
Terminology
Greenhouse gas emissions
Refers to the seven gases listed in the Kyoto Protocol: carbon dioxide (CO2); methane (CH4); nitrous oxide (N2O); hydrofluorocarbons (HFCs); perfluorocarbons (PFCs); nitrogen trifluoride (NF3) and Sulphur hexafluoride (SF6).
Location-based
A method to calculate scope 2 emissions, reflecting the average emissions intensity of grids on which energy consumption occurs (using mostly grid-average emission factor data) (definition based on the GHG Protocol)
To calculate location-based Scope 2 emissions for an infrastructure asset, obtain location-specific grid emission factor for the region in which the asset operates, and multiply the energy consumption by the corresponding average grid emissions factor to determine emissions. If the asset has facilities that span across different geographies, do these steps for each facility, and aggregate these facility-level emissions to obtain the total location-based Scope 2 emissions for the entire infrastructure asset.
Note that for the location-based method, procurement or purchasing of renewable or low-carbon energy from the grid is not accounted for.
This may require that the asset manager collaborate closely with facility managers to ensure accurate communication of energy data and use of consistent in emissions factors used for various reporting purposes. Organizations employing this approach should regularly update emission factors to reflect changes in the grid's carbon intensity, promoting more precise calculations.
Market-based
A method to calculate scope 2 emissions, reflecting emissions from electricity that the entity has purposefully chosen (or their lack of choice). It derives emission factors from contractual instruments (definition based on the GHG Protocol).
To calculate market-based Scope 2 emissions for an infrastructure asset, determine the use supplier-specific emission factors corresponding to the appropriate contractual instruments and calculate a weighted average emissions factor. In the calculation of this weighted average emissions factor, non-renewable energy should correspond to an emissions factor provided by the energy provider. If specific energy generation sources are not available, a residual emissions factor should be used for all energy that is not explicitly renewable. This is also the case for assets for which no renewable energy is purchased, whereby the entire amount of energy consumption is to be multiplied by the residual emissions factor for that region. In cases where facilities lack access to residual emissions factors, work closely with suppliers to obtain accurate data or estimate emissions based on broader industry averages. This should follow the Market-based Scope 2 Data Hierarchy Examples. It is noted that if no such residual emissions factors are available, the last remaining option is to use an average grid emissions factor, in much the same way as is done in the location-based method. Multiply this weighted average emissions factor by the energy consumption of the asset to derive the market-based emissions of the asset. For assets that consist of multiple facilities spread across energy markets, sum the facility-level market-based emissions to calculate the total for the entire infrastructure asset.
Net Zero
Net zero means cutting greenhouse gas emissions to as close to zero as possible, with any remaining emissions re-absorbed from the atmosphere.
Science-based targets
Science-based targets provide a clearly-defined pathway for companies to reduce greenhouse gas (GHG) emissions, helping prevent the worst impacts of climate change and future-proof business growth. Targets are considered ‘science-based’ if they are in line with what the latest climate science deems necessary to meet the goals of the Paris Agreement.
Scope 1 emissions
GHG emissions that arise from operations that are directly owned or controlled by the Entity (definition based on the GHG Protocol). Examples include combustion of fuels in boilers, machinery or vehicles controlled by the Entity, emissions from industrial processes and fugitive emissions from Entity-controlled refrigeration equipment.
Scope 2 emissions
GHG emissions from the generation of purchased or acquired electricity and steam, heating and cooling consumed by the Entity (definition based on the GHG Protocol).
Scope 3 emissions
All indirect GHG emissions not included in scope 1 or 2 that occur in the value chain of the entity, including both upstream and downstream emissions (definition based on the GHG Protocol). Scope 3 emissions are typically divided into categories to facilitate reporting.
Carbon dioxide equivalent (CO2e)
The unit of measurement to express the Global Warming Potential (GWP) of a greenhouse gas, relative to the GWP of 1 unit of carbon dioxide (definition based on the GHG Protocol).
Validation: What evidence is required?
Data: GRESB automatically validates data in the performance tables.
Evidence: Only required if selecting 'Yes' to whether the Net Zero target is publicly available.
Scoring
Scoring: How does GRESB score this indicator?
Materiality-Based Scoring
The relevance of the 'Net Zero' issue (determined by the GRESB Materiality Assessment) defines this indicator's maximum score.
For more details, refer to the Asset Scoring Basics page or download the Asset Materiality & Scoring Tool.
Net Zero Target Setting
To earn the score for GH2 indicator, participants must fill the Target Setting table and answer each of the embedded yes/no questions in the survey, including:
Scope of the Net Zero target
Scope 2 accounting method
‘Metric’ used for the Net Zero target
Whether the target is aligned with a Net Zero target-setting framework
Whether the target is science-based
Whether a third party validated the target
Whether the target is publicly communicated
GRESB does not perform automatic validation to ensure all questions are completed and will not prevent the submission of the assessment if a question is skipped. However, to achieve a score, it is required to answer all the questions from the list above. Only the ‘Offsets’ column in the Target Setting table is not required to get the score for Net Zero component of the indicator, and can be completed voluntarily for communication purposes only. If responses to any questions, other than offsets, are missing, none of the Net Zero section will be scored.
In the Target Setting table, to achieve the score associated with net zero target setting, Participants must report the year and reduction target for 2 out of 3 of the following targets:
Short-term target
Medium-term target
Long-term target
References
CDP Climate Change 2024 - Technical note on science-based targets
Eurostat - Environment Glossary
Science-based Targets Initiative - Tools and resources
IIGCC Net Zero Investment Framework 2.0
WRI - GHG Protocol Scope 2 Guidance
WRI & WBCSD - Corporate Value Chain (Scope 3) Accounting and Reporting Standard
WRI & WBCSD - Technical Guidance for Calculating Scope 3 Emissions
WRI & WBCSD - The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard
US EPA - AVoided Emissions and geneRation Tool (AVERT)
QUICK START GUIDE FOR ELECTRIC UTILITIES
Alignment with External Frameworks
CDP Climate Change 2021 - C4 Targets and performance
CDP Climate Change 2021 - C5 Emissions methodology
CDP Climate Change 2021 - C6 Emissions data
CDP Climate Change 2021 - C7 Emissions breakdown
SAM Corporate Sustainability Assessment (CSA) - 4.1.1 EP - Direct Greenhouse Gas Emissions (Scope 1)
SAM Corporate Sustainability Assessment (CSA) - 4.2.4 Climate-related Targets
SAM Corporate Sustainability Assessment (CSA) - 4.2.6 Scope 3 GHG Emissions
GRI Standards 2016 - 305: Emissions
Relevant UN Sustainable Development Goals
SDG 9 - Industry, Innovation and Infrastructure
9.4 By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes, with all countries taking action in accordance with their respective capabilities
Get Support: Solution Providers
GRESB Solution Providers are independent, third-party organizations within the GRESB Partner network that offer specialized products, tools, and services to support sustainability performance outside the GRESB Assessment process.
The organizations below deliver commercially available solutions designed to help drive improvement for this indicator. Engagement is managed directly between the reporting entity and the Solution Provider.
GRESB will continue to update this section as the GRESB Solution Provider network grows. Please check back regularly to find GRESB Solution Providers who can support your sustainability performance.
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