Science based targets 17 Nov 2025
Navigating the Updated SBTi Corporate Net-Zero Standard: Key Refinements and What They Mean for Your Business
16 Min Reading Time
GHG Protocol’s and Science Based Targets Initiative’s proposed changes could derail corporate climate progress, but your feedback can shape a better path forward.
In October 2025, the Greenhouse Gas Protocol (GHGP)– one of the most widely recognized global standards for carbon accounting and reporting– proposed a set of revisions to their Scope 2 Guidance. Shortly thereafter, the Science Based Targets initiative (SBTi)– yet another globally recognized framework informing and governing the emission reduction target-setting process– released a draft of the second version of its Corporate Net-Zero Standard containing a similar set of revisions.
Scope 2 guidelines govern how companies account for the emissions from their purchased electricity and steam. These are particularly important for any carbon reduction strategy, as switching to renewable or zero-carbon sources of electricity is often the most cost-effective and proven way to make large-scale impact on overall emissions.
Some of the proposed revisions to how companies can get credit for zero carbon electricity purchases, such as hourly matching, deliverability rules, and unclear grandfathering, risk stalling the energy transition by driving up costs, disrupting markets, and limiting access to impactful clean energy solutions for a wide range of companies.
The proposed revisions across both the GHG Protocol and SBTi for Scope 2 are significant, including:
Notably, the GHG Protocol has signaled that a legacy clause, or grandfathering, is under consideration for market-based contractual agreements signed before the new rules take effect, to protect existing investments and maintain market stability. However, this is not yet confirmed, and details (such as duration of grandfathering and conditions) are still under discussion. Similarly, SBTi makes a slight reference to Section 5 of the RE100 Technical Criteria without specifying whether grandfathering will be included.
While the proposed revisions could, in theory, incentivize greater granularity and data accuracy when it comes to Scope 2 emissions calculations, the reality is that these revisions are not aligned with or reflective of the ways companies make decisions regarding their renewable energy procurement. Instead of accelerating progress, they could inadvertently create barriers that stall renewable adoption and compromise global efforts to meet climate goals.
Long-term power purchase agreements (PPAs) have been the most effective way for companies to drive large-scale decarbonization over the past decade, allowing companies to combine energy demand across regions and sign utility-scale contracts. These agreements have enabled nearly 200 GW of new renewable energy projects globally since 2008, enough to power over 175 million homes for one year.
While smaller deliverability regions ensure power is physically close to consumption, they also discourage investment in areas with the greatest renewable potential and may push buyers toward short-term spot purchases that lack additionality instead of long-term power purchase agreements (PPAs). Hourly matching may also force companies to over-procure renewable energy to guarantee compliance, further escalating costs. These proposed revisions risk limiting access to this proven tool at a time when rapid decarbonization is critical.
Without affordable storage or advanced grid flexibility in many markets, achieving hourly matching is nearly impossible. Execution of hourly and location matching is highly challenging; corporate load profiles rarely align with renewable generation patterns—solar peaks midday, wind is intermittent, and much corporate demand occurs outside these windows. Adding complementary mandatory metrics to track these requirements risks creating confusion and eroding confidence in whether companies are on the right decarbonization trajectory.
The world’s electricity generation is only 15% wind and solar today, which means that in all but a scant few markets, adding any new renewable energy displaces fossil fuels. Hourly matching on a voluntary basis would provide recognition to those companies able to go above and beyond while not penalizing corporate buyers willing to make Scope 2 efforts.
Many companies rely on long-term PPAs or aggregated deals to meet targets, and developers often depend on these agreements to receive project financing. Limiting commissioning windows to 5 or 10 years, as could be possible under SBTi’s proposed revisions, will make it more difficult for renewable energy developers to finance and build projects due to shorter contract length. Combined with rising costs, this creates yet another barrier—companies may find it financially and logistically impossible to source compliant renewable energy as less will be built, jeopardizing their ability to meet near-term climate commitments.
By committing to long-term PPAs and renewable projects (often voluntarily and at significant financial risk) early adopters of the energy transition have accelerated market development, created demand signals, and enabled the scale-up of clean energy infrastructure. Their leadership has delivered tangible climate benefits and paved the way for broader corporate participation.
Granting full grandfathering provisions honors these commitments and ensures that investments made in good faith remain recognized for their entire contract term. It reinforces trust in voluntary markets and sends a clear message: proactive climate action is valued and rewarded. Without this assurance, the progress achieved through early leadership could be overshadowed, weakening confidence in future initiatives. Grandfathering is not just a technical detail—it’s a principle that safeguards credibility and momentum in the global energy transition. While the GHG Protocol has indicated that grandfathering is likely, the details and extent of such a provision remain to be determined. It’s important that companies engage in the consultation process periods to help ensure that full grandfathering is permitted.
The uncertainty surrounding these revisions is further compounded by a lack of alignment between major sustainability and renewable energy frameworks, such as GHGP, SBTi, and RE100, on key issues. This fragmentation has created significant confusion for companies trying to chart a path forward on energy procurement and decarbonization strategies.
The timing couldn’t be more challenging: organizations are under mounting pressure to meet near-term (2030) emissions reduction targets while navigating global economic headwinds. With the rules of engagement shifting so dramatically, many are questioning whether those targets remain achievable and whether they can sustain momentum if costs rise sharply.
Yet, amid this uncertainty, several companies are moving decisively. Recognizing that grandfathering in some form is likely, these organizations are choosing to accelerate clean energy investments ahead of the new provisions to secure favorable terms and safeguard compliance under future rules.
The proposed revisions, if approved, could fundamentally alter renewable energy markets as well as global climate progress. It’s important to stay informed about the proposed revisions and the impacts they could have on your business.
To stay prepared, companies should:
The implications of these proposed revisions are far-reaching, and it can be difficult to understand the direct impact these changes may have on your business. SE Advisory Services leverages decades of experience to help clients develop renewable energy strategies, support global procurement opportunities, and support their decarbonization efforts.
Our team of experts have created a comprehensive toolkit that breaks down the proposed updates from SBTi and GHG Protocol and gives you clear steps to respond effectively.
Download the toolkit now and make your feedback count in shaping tomorrow’s standards.
Contact our team today for expert guidance on adapting your business’ procurement strategy and long-term decarbonization plans to these changes.
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