SBTi Corporate Net-Zero Standard v2.0: What companies need to know
Written by: Laura Russell, Technical Specialist | Last updated: 25/06/26
The Science Based Targets initiative (SBTi) has become the gold standard for corporate net-zero target setting because it gives companies a credible, science-based framework for aligning emissions reduction targets with the Paris Climate Agreement. Following the launch of the SBTi in December 2015, the number of companies with SBTi targets rose quickly. At the end of 2025, almost 10,000 companies had validated targets, representing close to 40% of global market capitalisation[1]. Investors have been using SBTi-validated targets in their investment choices and large multinationals are asking their suppliers to adopt SBTi-validated targets.
The Net-zero Standard version 1 (v1) provided the guidance for setting net-zero targets to be validated by the SBTi[2]. Whilst this standard has proven to offer a robust approach for ensuring that net-zero targets reflect the ambition level required by climate science, companies have also faced practical challenges using the standard.
The requirement to set absolute reduction targets for scope 1 and 2 made it difficult to reconcile science-based targets with business growth, even where core business activities facilitated emissions reduction for others in the business ecosystem. Some companies found that their baseline emissions inventory was no longer relevant as their emissions data quality improved and they got better insight in the emissions from the actual activities in their operations and supply chain. And many companies struggled with finding appropriate levers to drive emissions reduction in their value chain to progress towards their scope 3 target.
These issues have become increasingly apparent in recent years, especially regarding scope 3 data quality and reliability, supplier and customer engagement, and achievability of targets following implementation challenges.
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The Net-Zero Standard version 2.0 seeks to respond to these challenges by shifting the standard from a target-setting framework towards a more comprehensive implementation and accountability framework[3]. Some of the key changes in version 2.0 include:
Requirements will differ according to company size and geographic location, with the aim of recognising different starting points and differentiated responsibilities.
More emphasis on governance, accountability and transition planning. Companies will need to demonstrate how targets are embedded into decision-making and all companies are now required to develop and maintain a transition plan which will need to be disclosed as part of the validation process.
Expansion of target-setting options across scopes 1, 2 and 3. Companies can opt for alternatives to absolute emissions reduction targets, including intensity-based targets, low-carbon electricity targets and supplier/customer alignment. This range of options is intended to improve usability, particularly for companies with complex value chains. It also means companies will need to be clear on which options they choose and why.
Updates to target base year. Companies must now use the most recent year that has comprehensive emissions data as the base year for all target. This is a subtle but important shift as under the previous standard there was greater flexibility in adopting an historical base year.
Baseline year emissions will be reset at the beginning of each target cycle, recognising the dynamic environment in which businesses operate and to make baseline years a more meaningful reference point. Assurance on the baseline emissions inventory becomes mandatory for large companies.
A requirement for larger companies to support high-integrity carbon removals from 2035. Companies will be required to purchase eligible carbon credits from 2035, covering at least 1% of scope 1 and 2 emissions at that point, and will be recognised for purchased carbon credits covering a higher proportion of emissions.
From Q1 2027, companies will be able to submit under v2.0, whilst version 1.3.1 remains available until the end of 2027. From 1 February 2028, new submissions will need to align with v2.0.
What this means in practice
The introduction of version 2 of the Net-Zero Standard will affect companies at differing stages of their target-setting journeys in different ways.
For companies that have already set an SBTi target, near-term targets are expected to remain valid until the end of their current target timeframe. When approaching the end date of the near-term target, they will need to use the new Net-Zero Standard for setting targets for the next cycle (2030-35). The SBTi recommends that companies start in 2028 to allow sufficient time for implementation. In the interim period, companies should use this time to assess whether their transition plan, capital allocation, procurement processes and supplier engagement programme are strong enough to evidence credible delivery under version 2.0.
Companies who are considering or preparing their first target submission to the SBTi are able and even encouraged by the SBTi to use version 1 (v1.3.1) until the end of 2027. At the same time, they can anticipate the requirements of version 2, which will apply for their next target update cycle after 2030. For example, a company beginning its baseline and target modelling now should design its approach to be “v2.0-ready” even if it submits under the current standard, particularly on scope 3 boundary decisions, governance, transition planning and removals strategy.
With the focus on transition planning, it will become increasingly important to develop a detailed view of the emissions reduction pathway for key emissions drivers. In helping companies prepare for SBTi-validation, we have found that companies that have modelled this in detail, bottom-up, with input from experts in the business, are much more likely to translate their targets into concrete action plans that can be taken forward by the business.
Recommendations: what companies should do now
The new Net-Zero Standard offers a great opportunity for companies to set emissions reduction targets that are based on climate science, aligned with business strategy and embedded in decision making. The increased flexibility in target options allows companies to choose targets that reflect sector pathways, hard-to-abate emission sources and business growth objectives. With the requirements for integration into governance and regular review cycles, emphasis shifts from target setting as a one-off, static exercise to target delivery through ongoing transition planning and implementation.
While companies may want to take time to understand what the new Net-Zero Standard means for them, this should not delay implementation of existing GHG emissions reduction strategies. There are four practical steps that all companies with net-zero ambitions can take.
Review current targets and transition plans against the key changes of v2.0.
Strengthen scope 3 data, supplier engagement and value chain decarbonisation plans.
Clarify governance, accountability and internal ownership of target delivery.
Begin building a credible approach to residual emissions, removals and ongoing emissions responsibility.
Curious to know more?
Get in touchto arrange a meeting with one of our experts to explore the next step in your sustainability journey.
SBTi v2.0 raises the bar from target ambition to target delivery. Companies that act now will be better placed to maintain credibility, manage transition risk and demonstrate that their net-zero commitments are backed by practical implementation.” Laura RussellTechnical Specialist
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SBTi defines corporate net-zero as achieving a state where human-caused greenhouse gas (GHG) emissions are reduced to zero or a residual level, and any remaining emissions are permanently neutralised through atmospheric carbon removals.
What does SBTi stand for, and what is the Science Based Targets initiative?
The Science Based Targets initiative (SBTi) is a global organisation that helps companies to set greenhouse gas (GHG) emissions reduction targets that are aligned with the latest climate science and the goals of the Paris Agreement, particularly limiting global warming to 1.5°C. The initiative was founded in 2015 through a partnership between CDP, the UN Global Compact, the World Resources Institute (WRI), WWF, and the We Mean Business Coalition.
What does the SBTi do, and why does it matter?
The SBTi develops standards, guidance and methodologies that enable businesses to set independently validated science-based emissions reduction targets. It also enables decarbonisation strategies to be aligned with climate science and companies to demonstrate credible climate action to investors, customers, regulators and other stakeholders.
It provides a widely recognised and robust framework for corporate climate action, helping organisations to avoid greenwashing and to ensure that emissions reduction commitments are consistent with global climate goals. SBTi validation is often viewed as the benchmark for credible corporate climate leadership.
Why should businesses consider SBTi-aligned targets?
Businesses should consider setting SBTi-aligned targets because they can deliver an array of benefits. Firstly, it will help an organisation ensure that the level of carbon reduction being achieved across the organisation, aligns with the latest climate science and requirements to limit global warming to 1.5°C. In addition, SBTI-aligned targets directly support the robust management of climate-related risks through emissions monitoring and reduction and help to ensure that companies have a credible route to minimising the risk of financial implications and penalties for failure to transition to a low-carbon business. As SBTi is often viewed as the benchmark for credible climate leadership, having validated SBTi targets also helps to improve an organisation’s sustainability and business strategy credibility from the point of view of investors, customers and regulators.
How do businesses set SBTi-aligned targets?
The starting point for all SBTi-aligned targets is the development of a robust carbon footprint measurement which accurately measures the scope 1, 2 and 3 emissions of your business. Once you have measured your carbon footprint, there is a 5-step process that must be followed in order for SBTi to validate your SBTi targets: commit, develop, submit, communicate and disclosure. Please reach out to our team of experts for further information on the target setting process, as the exact steps will vary depending on the size and sector within which your organisation operates within.
What does the latest SBTi Corporate Net-Zero Standard mean for companies?
While companies may want to take time to understand what the new Net-Zero Standard means for them, this should not delay implementation of existing GHG emissions reduction strategies. There are four practical steps that all companies with net-zero ambitions can take.
Review current targets and transition plans against the key changes of v2.0.
Strengthen scope 3 data, supplier engagement and value chain decarbonisation plans.
Clarify governance, accountability and internal ownership of target delivery.
Begin building a credible approach to residual emissions, removals and ongoing emissions responsibility.
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