Draft Corporate Net-Zero Standard V2 Explained: Progress Against Targets
18th Mar 2025
This blog walks through the key changes to progress assessments proposed in the draft standard.
We are updating the Corporate Net-Zero Standard to support more companies to set targets and make corporate climate action more effective, to accelerate the pace of decarbonization.
When the Corporate Net-Zero Standard was first published in 2021, there was no consistent approach for companies to set net-zero science-based targets. That’s why the first version of the standard primarily focused on target setting, aiming to get companies to take this important step towards near- and long-term decarbonization.
Today, more than 3,000 companies have set science-based net-zero targets or committed to set them, and the standard has become the global benchmark for businesses committed to ambitious climate action. Companies, investors and civil society now want to understand how businesses can credibly report progress against their targets. That’s why one of the core objectives of the revision to the Corporate Net-Zero Standard is to integrate continuous improvement and assessment of progress against target.
But what does this look like in practice? We have published a draft of V2 of the standard for public consultation, including multiple proposals for stakeholders to review and provide feedback on.
This blog walks through the key changes to progress assessments proposed in the draft standard. We have also published two other blogs on scope 1, 2 and 3 target setting and environmental attribute certificates. You can find the full scope of proposed requirements in the consultation draft.
Determining progress
The current standard (V1.2) includes general requirements for companies to publicly report their emissions, but does not include clear guidelines on how to actually assess progress against targets. The draft standard includes a set of pre-defined formulas to be used for progress assessments (see Annex G). These formulas are designed to provide companies with a standardized approach to assess performance during their target cycle.
These assessments enable transparency around progress, and are also used in the proposed methods to renew targets at the end of each cycle.
Substantiating progress
The availability and quality of emissions data are common barriers identified by companies when setting and reporting on science-based targets. The draft standard seeks to acknowledge these practical challenges by proposing a more nuanced approach to substantiate progress against indirect emission sources (scopes 2 and 3).
The draft standard prioritizes direct mitigation that is fully traceable and provides clear and transparent evidence against progress claims. However, when emission sources are only semi-traceable, the draft standard allows for assessment at the activity-pool level as a time-limited stop gap. When emission sources are completely untraceable, indirect mitigation efforts (e.g. using the book-and-claim model - see our blog on EACs for more information) are also acceptable as a temporary means to meet the substantiation requirements.
Target renewal
The draft standard proposes a process for companies to renew their targets at the end of the target cycle. Each new set of targets will take into account the performance of a company during the previous target cycle. To do this, the standard proposes that companies use the performance assessment (as above - see Annex G) as the basis for calculating their new targets.
Once a company uses the progress assessment formulas, it will know if it met, exceeded or underperformed against its previous targets.The level of performance achieved is then considered for the next set of targets or to inform any action needed to address any potential underperformance.
Check back here in the coming weeks for a training video on the proposals for continuous improvement and renewal validation.
Claims
The SBTi currently provides a basic set of communications guidelines for companies to use for communicating about commitments and target validation. The draft standard expands this significantly to provide clarity about the different types of claims at different stages of the process–from commitment to initial assessment to target renewals and progress claims.
By providing clear requirements for substantiating claims, the standard incentivizes a consistent, transparent and accurate approach to claims. The draft will also be supplemented with specific types of claims and substantiation guidelines, informed by the consultation process.
All interested parties are welcome to submit feedback on the draft Corporate Net-Zero Standard V2 through 1 June 2025. Before doing so, be sure to review the draft standard itself through our new digital consultation guide.
If you want to learn more, register for our Q&A webinar on 9 April and submit a question to be answered by our expert team.
