SBTi Launches New Corporate Net Zero Standard

The Science Based Targets initiative (SBTi) has released its Corporate Net Zero Standard Version 2.0. According to SBTi, the update offers companies multiple target-setting options rather than a single approach.

The organisation was founded in 2015 by CDP, the United Nations Global Compact, World Resources Institute and WWF.

It provides frameworks and validation for corporate net zero targets consistent with the 2015 Paris Agreement on climate change.

The updated standard could show businesses how to align decarbonisation plans with climate science while addressing their specific operational context.

More than 11,000 companies have used SBTi frameworks to set science-based targets.

Decision-making under uncertainty

"Businesses now have a great opportunity to manage their transition risk and strengthen resilience in a fast-changing world," says David Kennedy, CEO at SBTi.

"The Standard provides a framework to achieve this in practice across a wide range of contexts, through aligning climate science with actions that they can and should take to transform their businesses."

According to David, companies using the standard will gain a competitive advantage while contributing to international climate objectives.

The framework prioritises direct emissions reduction across operations and value chains.

Companies are expected to focus on emissions over which they have the greatest control and which could deliver the greatest impact.

The approach requires leaders to make strategic choices about where to direct resources.

Three pathways for Scope 3

The standard introduces three options for setting near-term Scope 3 targets.

According to SBTi, companies can choose overarching emissions reduction targets, overarching supplier or customer alignment targets, or category and activity-specific targets.

Each pathway requires different leadership decisions. Companies can use the coming months to identify which option suits their business model and value chain structure.

An SBTi spokesperson says the revised standard has been informed by public consultations, pilot testing and expert working groups. It responds to feedback from businesses seeking more practical guidance.

The spokesperson says the standard is more streamlined and clearer to navigate while maintaining rigour and ambition.

The design aims to help more companies take credible, science-based climate action that delivers business value and measurable emissions reductions.

Managing setbacks transparently

Version 2.0 introduces a voluntary recognition mechanism for short-term action. It acknowledges that companies may face unexpected business impacts affecting sustainability efforts.

As long as they act in good faith and transparently, companies may remain within the SBTi framework even if targets are missed.

The approach aims to encourage more ambitious emissions reduction targets rather than conservative planning.

The SBTi spokesperson explains the flexibility is not lowering the bar. Instead it provides guidelines for leaders to make credible claims about progress toward net zero and avoid greenwashing risk.

According to Francesco Starace, Chair of the Board of Trustees at SBTi, decarbonisation requires new approaches and stronger collaboration.

"Decarbonisation across operations and value chains requires new approaches, stronger collaboration and better tools for decision-making," he says.

"By reflecting a decade of learning, the Standard will help companies open their door to the benefits of decarbonisation: embedding climate action into core business strategy, managing their transition risks and strengthening long-term competitiveness in a rapidly changing global economy."

From ambition to execution

The updated standard builds on 10 years of experience supporting companies in setting science-based targets.

According to SBTi, it reinforces the organisation's role in helping companies translate ambition into credible action and accelerate progress toward net zero by 2050 at the latest.

Kirsten Schuijt, Director General at WWF, says the revised standard has the potential to drive impact across the global economy.

"The revised net zero standard marks a meaningful progression and has the potential to drive real impact across the global economy," she says.

"The adoption of the new standard will not be straightforward, but with the right guidance and support, it can help businesses move faster from ambition to delivery and drive the scale of change urgently needed."