In June 2026, the Science Based Targets initiative (SBTi) released Corporate Net-Zero Standard V2.0, the most significant overhaul of corporate climate target-setting since the framework launched in 2021. The update introduces company-specific target categories, mandatory transition plans and assurance for larger companies, and a new framework for how businesses account for ongoing emissions. Companies have until early 2028 to transition, but those setting or renewing targets soon should start planning now.
What Is SBTi?
The Science Based Targets initiative (SBTi) is the world's leading body for corporate climate target-setting. Founded in 2015 as a partnership between CDP, the UN Global Compact, World Resources Institute, and WWF, it gives companies a science-based framework for setting emissions-reduction targets aligned with keeping global warming within Paris Agreement limits, and independently validates those targets against the latest climate science. More than 11,000 companies and financial institutions worldwide have set targets through SBTi, making its standards a de facto benchmark for what counts as a credible net-zero commitment — one that investors and rating agencies increasingly expect companies to meet, even outside formal regulatory mandates.
Why SBTi Needed an Update
When the original Corporate Net-Zero Standard launched in 2021, it was groundbreaking simply for establishing a common, rigorous definition of "net-zero" at a time when the term was used loosely and inconsistently across industries. Five years and 11,000-plus validated targets later, SBTi has learned where the framework fell short in practice. Companies set ambitious targets in good faith but ran into real obstacles: opaque, multi-tier supply chains; immature decarbonization technology; investment cycles that didn't match target timelines; and Scope 3 emissions that depend on the decisions of thousands of external suppliers and customers, many at very different stages of their own climate journeys. The gap between stated ambition and demonstrated progress kept widening. Version 2.0 is SBTi's direct response — a rework of roughly 42% of the standard's content, shifting its center of gravity from ambition-setting toward implementation and measurable delivery.
What's Changing
- Company categorization — Companies are now grouped by size, revenue, and emissions profile. Larger "Category A" companies face the toughest requirements: mandatory third-party assurance, published Climate Transition Plans, and tighter Scope 3 rules. Smaller "Category B" companies, along with SMEs and companies in lower-income countries, get proportionate, lighter obligations.
- Separated Scope 1 and 2 targets, replacing the combined-scope approach many companies used under Version 1.
- Continuous progress assessment — annual reporting and periodic reassessment replace one-time validation, with an expectation that targets are revisited and strengthened if a company falls behind.
- Ongoing Emissions Responsibility (OER) — a new, bounded framework lets companies fund verified climate action beyond their own value chain as a complement to, never a substitute for, direct emissions cuts. Category A companies face a longer-term expectation to neutralize a share of Scope 1–3 emissions starting in 2035.
- "Best-efforts" recognition — companies that fall short of targets can stay in good standing within the SBTi framework if they're transparent about implementation barriers and demonstrate they're using every lever available.
Timeline
Version 1.3.1 remains the valid framework for target validation through the end of 2026. From Q1 2027, companies may submit new or renewed targets under either Version 1.3.1 or Version 2.0, giving organizations flexibility to move at their own pace. From February 1, 2028, Version 2.0 becomes mandatory for all new submissions, and Category A companies will have 12 months from validation to publish their first Climate Transition Plan. Companies with existing validated targets don't need to act immediately — most will transition at their next mandatory five-year review or when their current target cycle ends, whichever comes first.
Why It Matters
SBTi's update lands alongside a parallel move in the net-zero space: in June 2026, the International Standards Organization (ISO) opened a public consultation on a draft standard that would turn its existing, voluntary Net Zero Guidelines into a certifiable standard — meaning companies' net-zero claims would need independent, third-party verification rather than simple self-declaration. Taken together, the two developments point in the same direction: net-zero commitments generally are moving away from self-reported pledges and toward audited, comparable, third-party-verified claims. For companies with existing SBTi targets, that broader shift makes early alignment with V2.0's assurance and transition-planning requirements a matter of credibility as much as compliance — the standards a company's net-zero claims are measured against are only getting stricter, not looser.
What to Do (for Companies)
Companies planning to set or renew targets in the next 12–18 months should map their likely category under V2.0, review whether their current Scope 3 approach will meet the new thresholds, and start scoping what a Climate Transition Plan would require internally — well before the 2028 deadline arrives.
Read more at:
https://sciencebasedtargets.org/corporate-net-zero-standard-v2