Navigating the proposed changes in the SBTi Net-Zero Standard Version 2.0

The Science Based Targets initiative (SBTi) has released its draft Corporate Net-Zero Standard Version 2.0 (V2) for public consultation, marking an important evolution in how companies worldwide are expected to tackle climate change. 
With over 10,000 companies having set science-based targets through SBTi, this update is a crucial milestone that will shape corporate climate ambition in the years to come. With this blog, we are breaking down what is changing, why it matters, and how your business can stay ahead of the curve. 

 

Understanding the SBTi and why it matters 

The SBTi is a collaboration between CDP, the UN Global Compact, the World Resources Institute (WRI), and WWF. The SBTi’s Corporate Net-Zero Standard is the world’s only science-based framework for setting corporate net-zero targets. It provides the guidance, criteria, and recommendations companies need to align their targets with limiting global warming to 1.5°C in line with the Paris Agreement. The standard is now being revised. The new Version 2.0 builds on the original 2021 standard and extends SBTi’s role from target validation to full-cycle performance tracking and claims governance. 
The initiative enables companies to: 

• Define science-based reduction targets 
• Have targets independently validated 
• Combat greenwashing through transparent accountability 

You can read more about SBTi and the process in our previous blog here.  

 

Why is the net-zero standard being updated?  

As more companies commit to net-zero, challenges have emerged, particularly in tracking Scope 3 emissions, ensuring consistent progress, and validating claims. Version 2.0 responds to this by: 

• Introducing a full-cycle validation model (entry, initial validation, renewal validation) 
• Strengthening target setting, implementation, and progress tracking 
• Aligning with best practice from initiatives like the UN HLEG and CSRD 

The overall aim of this major revision is to ensure that this standard continues to enable companies to set and deliver ambitious, science-based targets.  

 

Key changes in the Net-Zero Standard Version 2.0 

1. Stronger focus on Scope 3 emissions 

Acknowledging both the barriers and opportunities associated with Scope 3 target setting, the revised standard introduces a series of changes aimed at making Scope 3 targets more effective in driving net-zero transformation across value chains, while recognising the operational challenges faced by companies. 
Scope 3 targets are now mandatory for Category A companies. While previous standards required Scope 3 target-setting only if these emissions made up 40% or more of a company’s total footprint, the updated approach moves away from this fixed threshold. Instead, companies are now expected to prioritise emissions-intensive and high-influence areas across their value chain, regardless of whether Scope 3 emissions exceed the 40% mark. 
To demonstrate progress, companies can use both emissions-based metrics and alignment indicators, such as supplier spend or product portfolio alignment with net-zero goals, offering more flexibility in how impact is tracked and managed. 

 

2. Indirect mitigation and carbon offsets 

Carbon offsets, credits from outside a company’s value chain, cannot be used to meet science-based targets. Instead, the draft introduces indirect mitigation (e.g., book-and-claim systems) as time-limited and transitional solutions when traceability is impossible. These: 

• Do not alter a company’s GHG inventory 
• Must be reported separately 
• Are not to be confused with beyond value chain mitigation (BVCM) 

 

3. Accelerated decarbonisation: action now, not later 
A key criticism of many net-zero plans is their over-reliance on long-term targets. In reality, what happens in the next few years is far more critical than distant goals. 
Version 2.0 sets a clear expectation; companies must cut emissions by approximately 45% by 2030, using 2020 as a baseline, in line with pathways limiting global warming to 1.5°C. This front-loaded approach aligns with the IPCC’s guidance and ensures that companies contribute to climate goals within this decisive decade. 
Interim targets must now be embedded into core operations, through technology shifts, process efficiency, and supply chain transformation, rather than deferred to future years. 

4. Clearer targets for Scope 1 and 2 
Previously, companies could combine Scope 1 (direct emissions) and Scope 2 (purchased energy) into a single target. The revised standard now requires these to be reported and reduced separately for: 

• Scope 1: Direct emissions from owned/controlled sources 
• Scope 2: Purchased energy emissions, with both location-based and market-based or zero-carbon electricity targets 

This helps clarify which emissions levers companies can use; from electrifying operations (Scope 1) to switching to renewable electricity (Scope 2) and strengthens overall clarity and accountability. 

5. Introducing alignment targets 
These new targets are qualitative or semi-quantitative, and focus on how a company’s broader ecosystem, its suppliers, products, and services, is aligning with a net-zero future. This includes: 

• Share of tier 1 suppliers aligned with net-zero 
• Share of revenue from aligned products 

While companies may not have direct operational control, these targets allow them to demonstrate influence, direction, and ambition, while complementing emissions-based targets and demonstrating broader climate influence throughout the value chain. 

6. Climate transition plan: from ambition to implementation 
Version 2.0 introduces a requirement for companies to develop and publicly disclose a climate transition plan within 12 months of target validation. This marks a major step forward in making net-zero goals more than symbolic commitments. 
The plan must outline how the company intends to achieve its science-based targets, including governance arrangements, key policies, actions, and resources. Important to note is that: 

• The transition plan must be formally approved by the company’s highest governance level (e.g., board of directors). 
• It must be reviewed and updated at least every five years​. 

Although SBTi will not issue detailed content requirements, companies are encouraged to align with external frameworks such as the UK’s Transition Plan Taskforce (TPT) Disclosure Framework or corresponding jurisdictional standards​. 
Additionally, Version V2.0 places a growing emphasis on traceability. Companies must increasingly be able to show how specific actions and investments result in actual GHG reductions, whether through direct operational improvements or interventions in the value chain. 

Why this matters 

The changes introduced in CNZS V2 are not just technical updates, they are a call for more meaningful and transparent corporate climate action. By closing loopholes, speeding up timelines, and requiring deeper value chain engagement, the new standard raises the credibility and ambition of corporate net-zero commitments. 
Whether you are a sustainability leader in a multinational or an SME just starting the journey, aligning with these updates means staying ahead of regulatory changes, responding to investor expectations, and contributing to a liveable climate future. 

 

What this means for businesses 

Many organisations will need to reevaluate their target-setting strategy, accelerate their internal decarbonisation plans, and rethink how they engage their value chain. The clearer guidance on Scope 3 and offsetting is especially relevant for businesses operating in sectors with complex supply chains or customer use-phase emissions. 
It is no longer just about “doing your part”, it is about proving it with transparency, ambition, and accountability. 

 

Get involved: public consultation open until 1 June 

The SBTi is inviting feedback on the draft Corporate Net-Zero Standard V2 until Sunday 1 June 2025. This is a key moment for businesses, NGOs, and policymakers to provide input on what the new standard should look like.  

 

How 2impact can help 

As experts in sustainability strategy and science-based target-setting, we can support your organisation with: 

• Mapping and assessing emissions across Scope 1, 2, and 3 
• Setting or updating SBTi-aligned targets in line with the new Version 2.0 requirements 
• Designing credible decarbonisation strategies that go beyond the minimum 
• Engaging your value chain to maximise Scope 3 impact 
• Communicating your progress clearly and confidently 
• Creating a climate transition plan to strategically reduce emissions and achieve net-zero targets 
• Provide support and advice when preparing and submitting CDP reports  

 

Whether you are just starting out or revisiting your strategy in light of the new standard, we provide the insights and support you need to take climate action with confidence. 
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