The Science Based Targets initiative (SBTi) Corporate Net Zero Standard has released its Corporate Net-Zero Standard V2.0, introducing a best-efforts framework, greater flexibility in science-based target setting, and stronger requirements for supply chain emissions reduction.
The Science Based Targets initiative (SBTi) Corporate Net-Zero Standard is the world’s leading framework enabling companies to set net zero targets consistent with limiting global warming to 1.5°C above pre-industrial levels. A collaboration between CDP, the UN Global Compact, the World Resources Institute (WRI), and the World Wide Fund for Nature (WWF), the SBTi provides independent target validation of corporate climate targets and supports science-based target setting across different industries and sectors.
After a public consultation process launched in 2024, the SBTi has published Corporate Net-Zero Standard Version 2.0, a landmark update that fundamentally changes how companies set, measure, and report on their greenhouse gas emissions reduction targets. For businesses currently holding or pursuing validated science-based targets, this update is essential reading.
What is the SBTi Corporate Net-Zero Standard?
The SBTi Corporate Net-Zero Standard provides a science-based framework that enables companies to set science-based targets for greenhouse gas (GHG) emissions reduction, aligned with climate science and the goals of the Paris Agreement. It sets out criteria for both near-term and long-term decarbonization, covering all three scopes of emissions:
- Scope 1 includes direct emissions from owned or controlled sources, such as combustion in company facilities and vehicles.
- Scope 2 includes indirect greenhouse gas emissions from purchased electricity, heat, and cooling.
- Scope 3 covers all other indirect emissions across a company’s value chain, including supply chain activities, product use, and end-of-life treatment. Scope 3 emissions often account for over 90% of a company’s total GHG emissions, making them both the largest and most challenging category to address.
More than 10,000 companies have now validated their science-based targets through the SBTi’s target validation process, and over 90% of those companies report a positive business impact as a result. Aligning with the SBTi’s validated targets framework builds credibility with investors and customers, and 79% of business leaders agree that science-based targets keep companies on track for decarbonization.
Why does the SBTi Corporate Net-Zero Standard matter?
The SBTi was founded in 2015 to establish science-based target setting as a standard corporate practice. Before the original Corporate Net-Zero Standard was published in 2021, net zero pledges varied widely in scope, methodology, and ambition, creating serious concerns about greenwashing and a lack of accountability in the net zero transition.
The Standard was designed to address this inconsistency by providing a common definition of net zero, a robust target validation process, and sector-specific guidance across different industries. It has since become the benchmark framework for corporate climate action, with validated targets now covering a significant proportion of global GDP and total GHG emissions.
The release of V2.0 follows both the evolution of climate science and a recognition that the original standard’s one-size-fits-all approach did not adequately reflect the diversity of business contexts, company sizes, and national economic realities. This update also aligns with the SBTi’s new five-year strategy, which expands the organisation’s focus beyond target validation services to actively supporting companies in implementing their climate targets and reaching net zero.
Key changes in the SBTi Corporate Net-Zero Standard V2.0
1. A best-efforts framework for corporate climate action
One of the most significant changes in V2.0 is the introduction of a best-efforts compliance framework. Under the new SBTi standard, companies can remain in good standing even if their emissions reduction targets are not fully achieved, provided they can demonstrate they have:
- Deployed every available lever to drive emissions reductions
- Been transparent about implementation barriers
- Taken mitigating action where possible
SBTi Chair Francesco Starace summarised the approach: “Set targets based on science accompanied by reasonable implementation plans, deploy every lever within your control, be transparent about where barriers have limited what was possible, and demonstrate what you are doing to address those barriers over time.”
This shift acknowledges that factors outside a company’s control, including policy uncertainty, supply chain disruptions, and technology availability, may affect progress on climate targets.
2. A tiered category system for companies of all sizes
V2.0 introduces a formal category system to reflect differences in company size and national economic context, directly addressing the need for sector-specific guidance and tailored support for small and medium enterprises:
- Category A covers large companies from all countries and medium-sized companies from high-income countries. These companies face comprehensive requirements, including near-term Scope 3 targets, mandatory transition plan disclosures, and limited assurance of base year greenhouse gas data.
- Category B covers small companies from all countries and medium-sized companies from lower-income countries, with greater flexibility in early-stage target setting to encourage broader participation in corporate climate action.
All companies, regardless of category, are required to set targets for Scope 1 and Scope 2 GHG emissions on a near-term (five-year) basis.
3. Three approaches for Scope 1 science-based target setting
For direct operations, V2.0 introduces three distinct approaches for science-based target setting on Scope 1 greenhouse gas emissions:
- Absolute emissions reduction, based on a straight-line trajectory from the target base year to the net zero year, consistent with limiting global warming to 1.5°C.
- Emissions intensity reduction, allowing companies to follow sector-specific emissions-intensity pathways, in line with the SBTi’s sector-specific guidance for different industries.
- Asset transition, designed for companies with capital stock that does not follow a linear pathway, requiring a transition plan to operate existing assets efficiently and replace them with low-carbon alternatives.
4. Updated approach to Scope 2 and Scope 3 emissions targets
For Scope 2, companies may now set emissions targets based on absolute reductions or increases in the share of low-carbon electricity, implementable through power purchase agreements, renewable energy certificates, or direct investment in low-carbon generation.
For Scope 3, the standard offers three options for near-term GHG emissions reduction targets:
- Overarching emissions reduction targets, built on a linear pathway to residual greenhouse gas emissions of approximately 10% or less by 2050.
- Supplier and customer alignment targets, focused on growing the proportion of tier 1 suppliers and customers that set science-based targets of their own. Engaging suppliers to set targets within five years is now a core SBTi expectation: over 90% of total emissions come from supply chains, and supplier engagement both improves GHG visibility and mitigates climate-related risks.
- Category- or activity-specific targets, tailored for companies with concentrated emissions in particular Scope 3 categories, designed to encourage the procurement of lower-carbon commodities and a transition to lower-carbon products and services.
Companies retain the ability to make justified exclusions for immaterial Scope 3 categories, for example where a category accounts for less than 5% of total GHG emissions or where the company lacks practical influence.
5. Implementation hierarchy and Ongoing Emissions Responsibility
V2.0 introduces a clear implementation hierarchy for reducing emissions, prioritising direct action at source (efficiency improvements, fuel switching, and supply chain engagement), followed by actions within shared systems such as electricity grids, and then sector-level actions where direct options are constrained.
The standard also introduces a new Ongoing Emissions Responsibility (OER) framework, recognising companies voluntarily taking responsibility for their ongoing greenhouse gas emissions through funding carbon removals or emissions reductions. Notably, for Category A companies, this voluntary status ends in 2035, after which they will be required to support carbon removals to neutralise 100% of residual emissions by their net zero target year, making early planning essential.
What the SBTi Corporate Net-Zero Standard V2.0 means for businesses
The release of V2.0 is both a challenge and a significant opportunity. As SBTi CEO David Kennedy stated: “Those that use it will gain competitive advantage while contributing to international climate objectives.”
For companies currently holding approved targets or engaged in the target validation process, the priority actions are:
- Review existing targets against the new category system and assess whether revisions are required through the SBTi services validation portal.
- Strengthen Scope 3 strategy, particularly for Category A companies now required to set near-term supply chain emissions targets. Companies with validated science-based targets consistently report stronger market positioning.
- Prepare transition plan disclosures that are transparent, credible, and supported by clear evidence of progress against climate targets.
- Plan for the OER requirement if your net zero target extends beyond 2035, ensuring carbon removal strategies are embedded in your long-term net zero transition roadmap.
Setting validated science-based targets remains one of the most effective tools available to any business leader for managing transition risk, demonstrating climate ambition, and enabling swift climate action in line with what the science demands.
Frequently asked questions about the SBTi Corporate Net-Zero Standard V2.0
What is the SBTi Corporate Net-Zero Standard V2.0?
The SBTi Corporate Net-Zero Standard V2.0 is the updated version of the Science Based Targets initiative’s flagship framework, enabling companies to set net zero targets aligned with limiting global warming to 1.5°C. It introduces a best-efforts compliance framework, a tiered category system, and new options for Scope 1, 2, and 3 emissions reduction targets.
What is the best-efforts framework in the new SBTi standard?
The best-efforts framework allows companies to remain compliant with SBTi standards even if their emissions reduction targets are not fully met, provided they demonstrate that all available levers were used, progress was transparent, and barriers were actively addressed.
What are the Category A and Category B requirements under V2.0?
Category A companies (large companies from all countries and medium-sized companies from high-income countries) must set near-term Scope 3 targets, disclose transition plans, and provide limited assurance of base year data. Category B companies (small companies and medium-sized companies from lower-income countries) have reduced requirements to support broader participation in science-based target setting.
How does V2.0 change Scope 3 emissions targets?
V2.0 offers three Scope 3 target-setting approaches: overarching emissions reduction targets, supplier and customer alignment targets, and category- or activity-specific targets. Only Category A companies are required to set near-term Scope 3 targets.
What is the Ongoing Emissions Responsibility (OER) framework?
The OER is a new SBTi framework recognising companies that voluntarily take responsibility for their ongoing greenhouse gas emissions through carbon removals or emissions reduction funding. For Category A companies, participation becomes mandatory after 2035.
How many companies have validated science-based targets with the SBTi?
More than 10,000 companies have validated their science-based targets through the SBTi’s target validation process, covering a significant share of global GHG emissions and GDP.
