Why SBTi’s Net-Zero Standard 2.0 Raises the Bar for Corporate Climate Action

The Science Based Targets initiative (SBTi) has released the second draft of its Corporate Net-Zero Standard Version 2.0 for a second public consultation, marking a significant milestone in the evolution of corporate climate governance. This update reflects extensive feedback from the first consultation, along with expert inputs and aims to refine how companies set, implement, and report on net-zero targets aligned with limiting global warming to 1.5°C.

The consultation period was open until 12 December 2025, giving stakeholders a final chance to shape the Standard before its expected finalization in 2026 and mandatory adoption for new targets from 1 January 2028.

Why This Update Matters

SBTi’s Corporate Net-Zero Standard is widely recognized as the benchmark for corporate climate target setting, translating the latest climate science into clear, actionable commitments. It guides companies not only on what targets to set, but also on how to achieve them.

Today, over 11,000 companies and financial institutions have committed to science-based targets. Version 2.0 will shape how those commitments evolve over the next decade, especially as scrutiny from investors, regulators, and customers continues to increase.

Key Updates in the Second Draft

1. A More Robust and Action-Oriented Net-Zero Framework

The draft reinforces the Standard’s core objective of ensuring corporate climate action is scientifically robust, transparent, and practical to implement. It improves the structure and clarifies expectations, making it easier for companies across sizes and sectors to adopt and operationalize credible net-zero pathways.

2. Clearer Scope-Specific Target Setting

The updated draft introduces more detailed, scope-specific requirements:

• Scope 1: Multiple reduction pathways that better reflect real-world operational constraints.

• Scope 2: A stronger focus on low-carbon electricity procurement, with expectations progressing toward 100% low-carbon electricity by 2040.

• Scope 3: A “focused and flexible” approach that prioritizes action on high-impact value-chain emissions while allowing limited exclusions for low-impact categories.

This evolution helps companies address the full breadth of their climate impacts rather than treating different emissions categories as a single block.

3. Transition Planning and Governance are no longer optional

For the first time, the Standard links net-zero target setting to actionable climate transition plans:

• Companies must publish a credible transition plan within 12 months of target validation.
• Companies will be required to demonstrate board-level or executive oversight.
• The must also obtain third-party assurance for base-year emissions.

These changes align SBTi more closely with emerging disclosure frameworks such as ISSB S2 and CSRD, reinforcing the idea that climate strategy must sit at the core of corporate decision-making.

4. Continuous Validation and Accountability

Instead of a single approval moment, the draft introduces a three-stage process:

• Entry Check
• Initial Validation
• Renewal Validation

Optional spot checks and regular progress reporting further strengthen accountability. Together, these changes position SBTi not just as a target-setting framework, but as an ongoing performance system.

5. Ongoing Emissions Responsibility and Recognition

The draft introduces a new framework to recognize ongoing emissions responsibility, acknowledging that residual GHG emissions will persist during the transition to net zero:

• Beyond Value Chain Mitigation (BVCM) and other mitigation outcomes can be disclosed and publicly recognized, while clearly not replacing science-based abatement targets.

• Companies taking early and ambitious action on emissions ahead of 2035 may achieve “Leader” status, signalling advanced climate leadership.

This framework increases transparency around residual emissions and encourages companies to support climate solutions beyond their direct operations.

Key Milestones and Next Steps

• March 2025: First draft of the Corporate Net-Zero Standard V2.0 released for public consultation.
• 6 November 2025: Second draft published and consultation launched (open until 12 December 2025).
• 2026: Final version of the Standard expected following review of stakeholder feedback.
• 31 December 2027: Companies may continue to set new targets under the current Corporate Net-Zero Standard (V1.3) and Near-Term Criteria (V5.3)
• 1 January 2028: Version 2.0 becomes mandatory for all new net-zero target submissions.

Key Takeaways for Businesses

The second draft makes one thing clear: setting a net-zero target is no longer enough. Companies will be expected to:

• demonstrate progress, not just ambition
• engage more deeply across their value chains
• align climate targets with governance, strategy, and reporting
• treat net-zero as a living commitment, not a static pledge

For businesses already on this journey, now is the time to review the draft closely and consider submitting feedback. The consultation period offers a real opportunity to ensure that the final Standard reflects operational realities while still maintaining the integrity that science demands.