• SBTi’s Net-Zero Standard 2.0 introduces tighter rules on carbon removals while giving companies greater flexibility on Scope 1, 2 and 3 targets.
• More than 11,500 companies hold SBTi validations, putting the revised rules at the centre of corporate climate governance and supply-chain decarbonisation.
• Supporters say the changes could accelerate implementation, while critics warn optional measures and “best efforts” provisions may weaken accountability.

The Science Based Targets initiative has released the first major overhaul of its flagship Net-Zero Standard, five years after its launch.

Version 2.0 aims to move companies “from ambition to action” by clarifying how businesses can develop and implement credible climate strategies. Yet the update has divided companies and climate experts over whether greater flexibility will accelerate decarbonisation or dilute ambition.

For SBTi CEO David Kennedy, the balance is deliberate. He says the standard must reflect “the way the world actually is”, rather than creating a “predefined algorithm” for corporate climate action.

Carbon removals gain a clearer role

One major change is the new Ongoing Emissions Responsibility framework. It recognises companies that go beyond validated targets and take responsibility for continuing greenhouse gas emissions.

Companies will no longer be able to rely heavily on offsets immediately before reaching their net-zero target date.

After 2035, large companies participating in the recognition programme will be required to support carbon removals. This applies to companies in high-income countries with annual turnover above €50 million.

Companies reaching their net-zero target year must also cut emissions to zero or neutralise remaining emissions through carbon removals.

Amy Merrill, chief executive of the Integrity Council for the Voluntary Carbon Market, said the revision clarifies the role of carbon credits. “We want to see everybody taking responsibility for as much emissions as they have, however they do it. And I think there’s now a good understanding in the market that the role of high-integrity carbon credits sits within this, and not as an alternative,” she clarifies.

More flexibility on corporate targets

The more controversial changes concern target-setting.

Small companies will no longer need external verification of base-year or target-year emissions. Companies are also encouraged, rather than required, to set Scope 3 targets extending beyond five years.

For Scope 1 and 2 emissions, businesses will gain more options. These can include emissions-intensity targets, asset-transition targets and low-carbon electricity targets.

Schneider Electric Chief Sustainability Officer Esther Finidori supports the stronger focus on near-term action. “Nobody can credibly model emissions out to 2050. The pace and depth of change ahead, including major technology disruptions, simply aren’t known yet… Five-year targets are what actually drive the machine.”

She also expects the Scope 3 changes to help companies tailor decarbonisation strategies across sourcing, supplier engagement and product design.

RELATED ARTICLE: SBTi Issues Detailed Decarbonization Pathways for Global Chemicals Industry

Scope 3 remains the central challenge

More than 11,500 companies worldwide now hold SBTi validations. For many, however, most emissions sit within supply chains rather than direct operations.

Joel Mertens, director of environmental impact methodologies at Cascale, said this makes supplier action essential. “So, even if that one brand is setting a target, without action at the manufacturer level, it’s going to be next to impossible to reduce its emissions.”

SBTi is responding with an “implementation hierarchy”. This allows companies to count certain collective mitigation efforts conducted at activity, pool or sector level.

Nikol Ostianova of the International Platform for Insetting said the approach could improve flexibility where supply-chain traceability remains limited. “To seriously consider deploying strategies to decarbonise an entire portfolio that involves all suppliers requires investments that today are not available to individual companies.”

Critics question accountability

Some experts remain concerned that flexibility could reduce pressure on weaker performers.

Jessica Nicol of Zero Carbon Analytics pointed to the standard’s “best efforts” provision. Companies missing targets may retain validation if external constraints prevented delivery.

“The reality is that the targets are not assessed in the first place for feasibility. So, the sort of goals that companies lay out don’t actually need to be feasible,” Nicol says.

David Picton, senior vice president of safety and sustainability at EcoOnline, said stronger supplier data requirements will also increase governance demands. “The real work lies in building data visibility, identifying where progress is falling short and correcting course.”

SBTi is now developing sector-specific guidance for power, automotive, agriculture, buildings and finance, with oil and gas work expected to begin next year.

For companies and investors, those sector rules could ultimately determine whether version 2.0 delivers greater climate accountability or simply greater discretion.

As governments and capital markets increasingly scrutinise corporate transition plans, the credibility of SBTi validation has implications well beyond voluntary target-setting. Its revised framework will influence how companies allocate capital, engage suppliers and demonstrate progress toward global climate goals.