LT1.2: Net Zero Targets
Maximum Score
2 points
Prefill
Not eligible
Validation
Evidence not validated
Has the lender set GHG reduction targets aligned with Net Zero for standing assets in its loan portfolio?
Is the target aligned with a Net Zero target-setting framework?
Assessment Instructions
Intent: What is the purpose of this indicator?
GHG reduction targets are considered a key part of an entity’s decarbonization strategy. Setting GHG reduction targets aligned with Net Zero targets demonstrates a formal commitment to reducing GHG emissions to meet the goals of the Paris Agreement – to limit global warming to well-below 2°C above pre-industrial levels and pursue efforts to limit warming to 1.5°C. Target-setting can strengthen investor confidence regarding the entity’s decarbonization strategy and guide the entity in its transition to a low-carbon economy.
Input: How do I complete this indicator?
Select yes or no. If yes, select all applicable sub-options.
If “yes,” participants may report a net-zero target. Within that target, they must provide at least one short-term, medium-term, or long-term reduction target that includes both a target year and a reduction percentage.
Target requirements:
Target scope: Select the GHG emissions Scope(s) covered by the reduction target. Options include:
Scope 1+2 (market-based)
Scope 1+2 (location-based)
Scope 1+2 (market-based) + Scope 3 (operational emissions)
Scope 1+2 (location-based) + Scope 3 (operational emissions)
Scope 3 (operational emissions)
Target metric: Select whether the target is based on absolute emissions or emissions intensity (kgCO₂e / m²/sq.ft).
Base year: Include a baseline year. Participants have the option to select a baseline year starting from 2015.
Base year performance: Input the base-year GHG performance (absolute or intensity value, depending on the selected target metric) of assets included within the target's scope.
Short-term target year: The year for the short-term target. Must be greater than the base year and less than 2100. Short-term target reduction (%): Reduction percentage for the short-term target, expressed as a value between 0 and 100%.
Medium-term target year: The year for the medium-term target. Must be greater than the short-term year.
Medium-term target reduction (%): Reduction percentage for the medium-term target, expressed as a value between 0 and 100%.
Long-term target year: The year for the long-term target. Must be greater than the medium-term year, or short-term year (if no medium-term year is present).
Long-term target reduction (%): Reduction percentage for the long-term target, expressed as a value between 0 and 100%.
Terminology
Embodied carbon
Refers to emissions that arise from producing, procuring and installing the materials and components that make up a structure. It may also include the lifetime emissions from maintenance, repair, replacement and ultimately demolition and disposal.
Validated by a third party
Refers to targets that have been independently verified or assessed by an external organization to confirm alignment with recognized Net Zero or climate science methodologies. Examples include validation or approval by the Science Based Targets initiative (SBTi), Carbon Trust, or equivalent accredited verification bodies.
Publicly communicated
The targets that are shared with any third party and are not restricted solely to an internal audience within the reporting entity. Examples include public disclosures, communications to investors, etc.
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 target
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 – limiting global warming to 1.5°C above pre-industrial levels.
Validation: What evidence is required?
Evidence
Evidence is required, but it will NOT be subject to manual validation in 2026. However, GRESB will utilize it to inform future validation developments, ensuring the quality of net-zero target-setting exercises.
This evidence requirement aims to capture what documentation participants have available to substantiate their net-zero target. The indicator collects the underlying characteristics of the target and does not mandate a single Net Zero definition in line with a specific framework.
Scoring
Scoring: How does GRESB score this indicator?
Scoring is based on the existence of a GHG reduction target aligned with Net Zero.
Open text box: The open text box is not scored and is for reporting purposes only.
Frequently Asked Questions
Does GRESB recommend Net Zero frameworks for adherence?
No. GRESB does not mandate a single Net Zero definition in line with a specific framework.
How should I report a single “Scope 1+2 + Scope 3” target when the scopes have different reduction percentages?
GRESB recommends reporting a weighted average reduction percentage based on emissions volume.Example:
Scope 1+2 target: Reduce Scope 1 + 2 emissions 50% from a baseline of 100,00 tCO₂.
Scope 3 target: Reduce Scope 3 emissions 20% from a baseline of 200,000 tCO₂
The weighted average reduction is calculated as: (100,000 × 0.50 + 200,000 × 0.20)÷(100,000 + 200,000) = 0.30In this example, the reported combined target would be a 30% reduction.
References
CDP Climate Change Reporting Guidance, 2019: C4.1
Recommendations of the Task Force on Climate-Related Financial Disclosures June 2017: Metrics and Targets- C
Science Based Targets initiative, 2020
Whole life carbon assessment for the built environment, RICS professional standards and guidance, UK, 2017
SBTi Corporate Net-Zero Standard, version 1.1, April 2023
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