How to Create a Net Zero Plan for Your Business

A baseline, dated targets across all three scopes, costed abatement and a named owner. Plus the 2028 deadline that dates most plans written before this summer.

A net zero plan for business is not a statement of intent. It is a baseline, a set of dated reduction targets across all three scopes, a costed plan of the work that delivers them, and a governance arrangement that makes someone accountable. Anything short of that is a press release, and increasingly it is a press release with legal risk attached.

The rules also moved this year, which is why plans drafted in 2023 and 2024 need revisiting. Here is how to build one that will still be defensible in 2028.

Step 1: measure the baseline properly

Everything downstream depends on the baseline year, and getting it wrong is expensive because you cannot quietly change it later without explaining why.

Measure across all three scopes of the GHG Protocol: scope 1 for fuel you burn directly, scope 2 for the electricity, heat and steam you buy, and scope 3 for everything in the value chain, from purchased goods and services to business travel, employee commuting, transport and distribution, and the use and end-of-life of what you sell. For most companies outside heavy industry, scope 3 is the overwhelming majority of the footprint and the part nobody has good data for.

Choose a baseline year that is representative and for which you actually have records. A year distorted by a pandemic, an acquisition or a plant closure will make your reduction curve either impossible or meaningless. Document the boundary: which entities, which sites, which categories, and what you excluded and why. Our guide to measuring your company's carbon footprint across scopes 1, 2 and 3 covers the mechanics.

Step 2: understand what "net zero" now requires

The Science Based Targets initiative published version 2.0 of its Corporate Net-Zero Standard on 11 June 2026, and it is the most consequential change to corporate climate target-setting in several years. The SBTi's own page on the new standard is the primary source.

Three things to take from it:

• You need near-term and long-term targets, not one or the other. Near-term targets cover the next five to ten years. Long-term targets set the total level of decarbonisation reached by 2050 or earlier.
• Net zero means at least 90% reduction. Companies committing to net zero through the SBTi commit to cutting emissions by at least 90% across the value chain by 2050 at the latest. The residual, which must be neutralised through permanent carbon removals, cannot exceed 5% to 10% of emissions depending on the sector.
• There is a window, then there is not. Submissions can use V1.3.1 or V2.0 from Q1 2027 until 31 January 2028. From 1 February 2028, V2.0 is mandatory for all submissions.

The practical implication for anyone starting now: build the plan against V2.0. Designing to a standard that expires in early 2028 buys you nothing except a rewrite.

Step 3: separate reduction from neutralisation

The single most common flaw in corporate net zero plans is treating offsets as interchangeable with cuts. They are not, and the standard is explicit about it.

Reduction is the plan. Neutralisation applies only to the residual that cannot be eliminated, and only with permanent removals rather than avoidance credits. A plan that reaches its target date by buying credits for 40% of its footprint is not a net zero plan under any current framework, and describing it as one now carries consumer protection risk in the UK. See our guide to the UK rules on greenwashing for where that line sits.

Some companies also make separate contributions to climate action beyond their value chain. That is legitimate and worth doing, but it should be presented as exactly that: a contribution alongside the target, not part of achieving it.

Step 4: build the abatement plan, with numbers

This is the part that distinguishes a plan from an ambition. For each material source of emissions, identify the intervention, the tonnes it removes, the capital and operating cost, and the year it lands. The usual sequence, roughly in order of cost-effectiveness:

1. Energy efficiency. Cheapest tonnes in the plan, and they reduce cost rather than adding it. Building fabric, controls, heat recovery, compressed air, lighting.
2. Electricity. Move to genuinely additional renewable supply. Note that unbundled certificates and a green tariff are not equivalent to a power purchase agreement in either impact or credibility.
3. Heat and process. Electrification of heat, heat pumps, and the point where the plan starts costing real capital.
4. Fleet. Long lead times, so decisions taken now determine emissions in the mid-2030s.
5. Scope 3, purchased goods and services. Supplier engagement, specification changes, material substitution, design for longevity. Slow, political and usually the largest single block.
6. Product use phase. If your product consumes energy, this may dwarf everything else, and it is an engineering problem rather than a procurement one.

Where the plan runs out of identified abatement before it reaches the target, say so. A curve with an honest gap and a research commitment is more credible than one closed with a straight line and no mechanism.

Step 5: governance, or it will not happen

Name the executive accountable. Take the plan to the board and minute it. Put the milestones into management incentives if the company uses them. Set a reporting cadence and stick to it, including the years when the numbers go the wrong way, because a plan that only reports good years is not believed.

Where climate risk is financially material, the board also has to think about it as a matter of directors' duties rather than sustainability policy. Our page on directors' duties under the Companies Act 2006 covers the statutory framing.

Step 6: check what you are already required to disclose

A net zero plan does not exist in isolation from reporting obligations. In the UK, depending on size and sector, those can include streamlined energy and carbon reporting, climate-related financial disclosures, and requirements flowing from customers rather than regulators.

The procurement one catches many mid-sized companies by surprise. Under PPN 006, formerly PPN 06/21, suppliers bidding for central government contracts with an anticipated value of £5 million a year or more must publish a Carbon Reduction Plan confirming a commitment to net zero by 2050 in the UK, with a stated baseline, the current footprint and reduction targets. The note has been updated for the terminology of the Procurement Act 2023 and the Procurement Regulations 2024, which apply to procurements commenced on or after 24 February 2025. If public sector work is part of the pipeline, this is not optional and it has a defined format.

For the broader reporting picture see UK ESG reporting requirements and how to write an ESG report.

A realistic timeline

What makes a plan fail

• A baseline year chosen because it flatters the curve.
• Scope 3 excluded, or included as a single estimated number that never changes.
• Offsets doing the work that reductions should be doing.
• No named owner, so the plan belongs to a departed sustainability manager.
• Targets set to a standard that is about to be superseded.
• Nothing costed, so the plan never reaches the capital budget and quietly stops being real.

For the wider strategy that a net zero plan sits inside, see how to build an ESG strategy, or start at the e-Business Ethics home page.