In an effort to broaden accessibility to science-based climate action and reinforce alignment with international climate goals, the Science Based Targets initiative (SBTi) has released an updated draft of its Corporate Net-Zero Standard V2. This revision incorporates new methodologies for companies to set and achieve net-zero targets, promising to simplify the process of decarbonization commitments for businesses. Several pathways have been proposed for reducing direct emissions and rules for the application of carbon credits have been clarified. This aims to offer companies a comprehensive set of options to effectively lower their carbon footprint.
SBTi, established in 2015, has played a pivotal role in promoting science-aligned emission reduction targets. Initial efforts focused on defining and disseminating best practices for achieving net-zero emissions. The introduction of the first Corporate Net-Zero Standard in 2021 marked a significant step towards providing a framework for businesses committed to ambitious climate goals. Since then, approximately 12,000 companies have adopted or committed to science-based emissions reductions through SBTi. The recent draft continues this trajectory by introducing nuanced steps towards realizing net-zero emissions.
How Does the New Draft Address Scope 1 and 2 Emissions?
The updated draft advances three options for Scope 1 emission targets. Companies can opt for a linear reduction pathway, increase their share of low-carbon operations, or implement Asset Decarbonization Plans tailored to technology readiness. For Scope 2 emissions, the stipulations include near-term target-setting mandates for all businesses, with long-term goals remaining optional for smaller enterprises. The draft also prescribes specific mechanisms allowing limited exclusions for certain energy types, creating potential for more effective emissions management.
What Changes are Included for Scope 3 Emissions?
Addressing Scope 3 emissions in the new draft shifts focus to high-priority emissions sources. It introduces three target-setting methodologies: “emissions intensity,” “activity alignment,” and “counterparty alignment.” These options cater to the need for flexibility given the diverse nature of value chain emissions. This change aims to lower one of the significant barriers companies face in setting science-based targets.
Recent drafts have incorporated consultations involving public feedback and expert opinions. The most current iteration offers a refined rule set with the removal of ambiguities from prior versions. Emphasis has shifted towards the broader intent of achieving net-zero emissions by 2050, clarifying earlier language that demanded public commitment. The revised focus enables businesses to frame their long-term intentions without perceived immediate obligations.
Formal acknowledgment of Environmental Attribute Certificates (EACs) marks a significant addition to this draft. It allows a limited but critical role for carbon credits in meeting targets. Companies can utilize these in regions matching their consumption, providing an additional means of achieving decarbonization goals where physical tracing isn’t feasible.
SBTi’s draft introduces a “leadership” category to incentivize voluntary action against emissions, acting as recognition for companies addressing a substantial proportion of their emissions. Especially noteworthy are enhanced requirements for large corporations categorized as A-level, which must craft credible transition plans and progressively handle ongoing emissions with carbon removal portfolios from 2035.
David Kennedy, CEO of the Science Based Targets initiative, commented,
“Businesses are driving global decarbonization, and will be key to achieving our climate objectives. Taking science-based action both reduces emissions and manages transition risks, maintaining competitiveness and offering growth opportunities in a carbon-constrained world.”
The current draft remains open for public consideration until December 8, 2025, inviting feedback for its finalization and use in 2026. The updated standard seeks to empower businesses across sectors, navigating intricate climate challenges with structured, science-based methodologies.
