Introducing the SBTi Corporate Net-Zero Standard Version 2.0

The Science Based Targets initiative (SBTi) has released Version 2.0 of its Corporate Net-Zero Standard, the most comprehensive framework for corporate climate action to date.

A new era for corporate climate action

Companies today are operating against a backdrop of increasing climate risk, market volatility, and evolving regulation. Many businesses are no longer asking whether they should act on climate, but how to make progress in a way that’s credible and commercially relevant.

Version 2.0 responds to this shift. Built on more than a decade of experience and informed by extensive stakeholder feedback, the updated Standard introduces an expanded toolkit to drive implementation and enable companies to unlock the opportunities of credible climate action.

What’s new

More than 11,000 companies have already set science-based targets through the SBTi. Version 2.0 builds on this momentum by introducing comprehensive updates across multiple areas, strengthening alignment with the latest climate science and evolving best practice.

Company categorization

The Standard moves beyond a one-size-fits-all approach by introducing company categorization that differentiates requirements based on company size and geography. Certain requirements for Category A companies (typically larger and based in higher-income countries) are optional for Category B (typically smaller and based in lower-income countries), including disclosure of transition plans, assurance of target base year data, and scope 3 target setting.

Net-zero governance

Version 2.0 introduces new expectations for companies to demonstrate that their targets are supported by strong governance. It requires businesses to secure formal approval of targets at the highest level of the organization, and to develop and maintain a transition plan outlining how targets will be implemented. These requirements are designed to ensure that targets are embedded in how companies operate as core components of broader business and climate decision-making.

Target setting

Companies face different challenges, opportunities, and levels of influence across their operations and value chains, which is why the updated Standard introduces new, tailored approaches to target setting.

Version 2.0 maintains the need to align near-term action with long-term climate objectives, grounded in a company’s physical emissions inventory. Companies are expected to continue prioritizing direct decarbonization within operations and value chains, exhaust all viable decarbonization levers within their control, and transparently report on and address dependencies that may affect delivery.

Scope 1 targets

All companies are required to set targets covering 100% of scope 1 emissions. The new Standard separates scope 1 and 2 targets, and provides more practical target-setting methods for scope 1, allowing businesses to select from three science-based approaches to: 

1. Absolute emissions reduction: Reduce emissions on a linear trajectory to residual levels;
2. Emissions intensity reduction: Reduce operational emissions intensity from applicable sector activities; and
3. Asset transition: Set asset transition targets based on a plan to decarbonize assets in line with science-based milestones and/or a carbon budget.

Scope 2 targets

The energy sector is critical to achieving the global net-zero climate goal. The updated Standard requires companies to set separate targets covering 100% of scope 2 emissions based on emissions reductions and/or increase the share of low-carbon electricity. It includes specific requirements for low-carbon electricity, such as location-matching, so that procurement happens in the same system as generation and consumption, along with a 15-year limit on the age of generation assets to help encourage investment in new renewable energy capacity

Version 2.0 also introduces a recognition framework for companies that reach certain hourly matching performance levels, allowing businesses to adopt this practice where feasible without creating unintended barriers to near-term climate action. The framework sets a clear, long-term direction by encouraging companies to align their electricity use with clean power generation more closely over time.

While implementing targets using hourly-matching remains optional, large electricity users are required to measure and report their low-carbon electricity performance using hourly accounting rules. This is designed to build transparency, improve data availability, stimulate market innovation, and help scale solutions over time. It aims to create the enabling conditions for the evolution of any future hourly matching requirements.

More information on the updated Standard’s approach to scope 2 targets can be found in our explanatory video and our blog.

Scope 3 targets

Scope 3 target-setting remains required for Category A companies and is optional for Category B companies, reflecting varying market contexts while maintaining a clear pathway for broad participation in the net-zero transition. This approach provides a focused and flexible framework that allows companies to focus their efforts on where they can have the greatest impact or influence, prioritizing: scope 3 categories that represent 5% or more of scope 3 emissions.

Companies can apply a range of science-based approaches when setting scope 3 targets, including emissions reduction targets, supplier or customer alignment targets, and category-specific targets tailored to upstream and downstream activities. These methods are designed to reflect real-economy mitigation levers, such as procurement decisions, supplier engagement, and the scaling of lower-carbon products and services.

The new Standard also recognizes credible actions toward target implementation, acknowledging existing constraints such as data traceability, availability of lower-carbon alternatives, and infrastructure or market limitations. These actions are governed by clear integrity guardrails to ensure consistency with science-based outcomes while enabling practical implementation at scale.

Target implementation

Under Version 2.0 of the Standard, targets are pursued on a best-efforts basis, meaning that companies are expected to employ all available levers to drive emissions reductions and proactively address implementation barriers.

Version 2.0 introduces an implementation hierarchy that recognizes that, where direct action is not feasible, companies can take action within the shared systems, such as electricity grids, gas grids, supply sheds, or logistics networks that companies feed into or purchase from. These shared systems are known as activity pools. Where structural constraints prevent action at the activity or activity pool level, they can take action at the sector level. This hierarchy is designed to support the decarbonization of the activities and systems that generate companies’ emissions.

The updated Standard also recognizes a broader range of actions that can support target implementation. These include projects and market instruments that, when used in line with the Standard’s integrity criteria and supported by transparent claims, can contribute to target progress. This approach maintains credibility while enabling companies to support decarbonization beyond their direct operations and value chains.

Reporting and assessing target progress

Ongoing tracking, evaluation, and public reporting of progress are essential to maintain credibility and to understand what works, where barriers exist, and how to course-correct. The updated Standard introduces a cycle of target setting, regular reporting, end-of-target cycle assessment, and target renewal. This represents an evolution of the SBTi model from validating target ambition to recognition of company-reported progress. This approach builds on other parts of the wider climate action architecture, including existing disclosure platforms.

Progressive responsibility for ongoing emissions

While the focus remains on prioritizing emissions reductions across company operations and value chains, the updated Standard introduces the Ongoing Emissions Responsibility program. It is designed to encourage companies to take voluntary action to address the impact of emissions released on the path to net-zero, demonstrating leadership while helping to limit temperature overshoot, manage transition risks, and contribute to the scale-up of climate solutions.

These actions may include emissions reductions, carbon removals, and other forward-looking climate actions, such as mitigation funding, low-carbon research and development, adaptation and resilience, and loss and damage.

Removals must be scaled to enable long-term neutralization of residual emissions at the net-zero target year, which is why from 2035, Category A companies will be required to address part of their ongoing emissions with removals. This requirement aims to progressively increase the proportion of removals, so that by the time companies reach their net-zero target, the remaining residual portion of ongoing emissions are neutralized.

What this means for companies

Companies should not delay setting science-based targets—Version 1.3.1 remains the most well-established framework available. 90% of companies with science-based targets report  an overall positive impact on their business, along with improved strategic cohesion and strengthened investor perception.

Companies that already have targets can benefit from new elements introduced by Version 2.0 right away, including the pursuit of targets on a best-efforts basis, company categorization, and ongoing emissions responsibility.

Companies setting, updating, or renewing targets in 2026 are strongly encouraged to prepare them for submission at the earliest opportunity using the Corporate Net-Zero Standard V1.3.1. Companies setting, updating, or renewing targets in 2027 are also welcome to continue to use the Corporate Net-Zero Standard Version V1.3.1 for target setting until January 31, 2028, after which companies must use the Corporate Net-Zero Standard V2.0 for all new target submissions.

To support a smooth and practical transition between both versions of the Standard, the SBTi has published a series of supportive resources:

• Continuing use of the Corporate Net-Zero Standard V1.3.1 and Transition to Version 2.0: Outlines the innovations introduced in Version 2.0 that are expected to be available to companies that have set targets using Version 1.3.1 and the SBTi’s Corporate Near-Term Criteria.
• Guide for Companies in the Transition to Corporate Net-Zero Standard Version 2.0: Explains the main changes introduced in Version 2.0 and how companies with validated targets and active commitments can navigate the transition in a way that maintains continuity with the decarbonization efforts already underway.
• Main Changes Document: Provides a high-level overview of the updates introduced in Version 2.0.
• The Corporate Net-Zero Standard V2.0 Is Here: What Comes Next: Explains what comes next to support operationalization of the Standard, before validation against the Standard opens in early 2027.

For companies with existing targets, immediate action is not required. However, early preparation is encouraged to help build familiarity with the updated framework and support future target updates.

Moving from ambition to real-world transformation

The next five years are a critical window for climate action. For many businesses, the challenge is no longer whether to act, but how to deliver progress consistently and at scale. The evolution of the Corporate Net-Zero Standard is designed to combine scientific rigor and practical implementation tools, enabling companies not only to determine ambition but to deliver measurable progress toward net-zero emissions.

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