The SBTi Corporate Net-Zero Standard Is Evolving. The Shift Is Towards Delivery

The Science Based Targets initiative (SBTi) is in the process of updating its Corporate Net-Zero Standard. While the core definition of net zero is not changing, the way companies are expected to set - and crucially deliver - their targets is evolving.

This represents a meaningful evolution of the framework, building on what has worked under Version 1 (V1) and addressing where companies have struggled to translate ambition into action.

Why is SBTi updating the standard?

V1 played an important role in scaling corporate climate ambition. It provided a clear, science-aligned framework and enabled widespread adoption of net zero targets.

However, as implementation has progressed, a consistent challenge has emerged: many organisations have credible targets, but less clarity on how those targets will be achieved in practice.

At the same time, external pressure has increased. Regulators, investors, and other stakeholders are placing greater emphasis on delivery, transparency, and the risk of greenwashing.

Version 2 (V2) reflects this shift. It retains the scientific foundations of the standard, but strengthens the link between target setting and real-world decarbonisation.

What is the overall direction of change?

V2 remains a target-setting standard. What changes is the level of expectation around how those targets are constructed and evidenced.

In practical terms, the direction of travel is:

• from one-off validation to ongoing accountability

• from high-level ambition to decision-grade planning

• from broad coverage to prioritised action

• from emissions accounting to operational change

This is less about introducing entirely new concepts, and more about making the framework usable in real business contexts.

What are the key changes?

Scope 1: broader and more realistic target-setting approaches

Under V1, most companies relied on linear emissions reductions or sector pathways. V2 expands this to better reflect how decarbonisation actually happens.

Companies can now use:

• Asset decarbonisation plans, aligned to capital stock turnover and investment cycles

• Alignment (activity-based) targets, such as increasing the share of low-carbon processes or technologies

These approaches are still grounded in science-based pathways, but allow companies to align targets with operational reality.

Scope 2: stronger expectations on electricity

Renewable electricity remains a central lever, but the integrity of claims is strengthened.

V2 introduces:

• increasing expectations for geographic matching (where electricity is generated vs consumed)

• a phased move toward temporal matching (when it is generated, potentially at an hourly level)

• greater scrutiny of Energy Attribute Certificates (EACs)

This reflects a shift from accounting-based claims toward demonstrating real impact on power systems.

Scope 3: more targeted and actionable

Scope 3 (value chain emissions) remains essential, but the approach changes significantly.

Instead of focusing on covering a fixed percentage of emissions, companies are expected to:

• identify material categories (typically ≥5% of Scope 3 emissions)

• focus on priority emissions sources within those categories

V2 also includes multiple target types, including:

• emissions intensity targets

• volume or activity-based targets

• supplier (counterparty) alignment targets

The intention is to move from broad, often theoretical coverage toward areas where companies can realistically drive change.

A structural change: Category A vs Category B

V2 introduces two categories of companies, primarily based on size and geographic context:

• Category A: larger companies and those in higher-income regions, expected to meet the full set of requirements

• Category B: smaller companies and those in lower-income or emerging markets, with some flexibility and optionality in how requirements are applied

This is intended to make the framework more proportionate, recognising differences in resources, data availability, and market maturity, while maintaining overall ambition.

Greater emphasis on implementation and governance

A key theme throughout V2 is that targets are expected to sit within broader business processes, rather than remaining within sustainability teams.

This shows up most clearly through a stronger emphasis on transition planning. For Category A companies, this is no longer optional - they are expected to develop and submit a transition plan within 12 months of target validation, setting out how their targets will be delivered in practice.

More broadly, this requires:

• clearer internal ownership of delivery (beyond sustainability teams)

• stronger links to procurement, capital allocation, and operational decision-making

• defined processes to track progress and manage delivery over time

The standard does not prescribe a single format for transition plans, but the expectation is clear: targets need to be backed by plans that are sufficiently detailed to guide real business decisions.

Ongoing accountability through a validation cycle

Validation is no longer a one-off milestone.

V2 introduces a cyclical approach, where companies:

• submit targets

• demonstrate progress

• and update or renew targets over time

This shifts the emphasis toward continuous performance, rather than initial target approval.

A structured approach to ongoing emissions

V2 also introduces a framework for addressing emissions released during the transition to net zero.

Companies are encouraged to take responsibility for these “ongoing emissions” through:

• mitigation beyond their value chain

• and/or climate finance contributions

This builds on the previous concept of Beyond Value Chain Mitigation (BVCM), but introduces more structure and transparency.

Importantly, these contributions sit alongside emissions reductions, they do not replace them.

What does this mean for businesses now?

V2 is expected in summer 2026, but companies do not need to pause activity in the meantime.

Targets can still be set under V1 until 31st December 2027, and those targets will remain valid. Both V1 and V2 represent credible routes - the right approach depends on where a company is in its journey and how ready it is for the more detailed requirements in V2.

At the same time, there is a clear direction of travel. The most useful preparation is to focus on the areas that V2 is strengthening.

In practice, that means:

• Getting clear on your main emissions drivers, particularly in Scope 3

• Testing whether your current strategy could translate into a credible transition plan

• Strengthening governance and accountability, including ownership outside sustainability teams

• Reviewing electricity procurement strategies in light of tighter integrity expectations

• Improving data and tracking, so you can demonstrate progress over time

The key point is that this is not about rewriting targets now. It is about making sure your current approach is robust enough to evolve.

Final thought

The core message of V2 is not that companies need to start again, it’s that the bar for credibility is rising. Targets still matter, but increasingly, they are expected to be backed by clear plans, operational decisions, and demonstrable progress.

If you are currently setting targets under V1 or starting to think about how V2 will affect your organisation, I can support both.

As an SBTi-certified expert, I work with companies to set science-based targets and translate them into practical, deliverable strategies.