The SBTi’s Draft Corporate Net-Zero Standard Version 2.0: A New Era for Corporate Decarbonization

The Science Based Targets initiative (SBTi) recently launched a draft of its revised Corporate Net-Zero Standard for public consultation. This new standard aims to accelerate corporate decarbonization by addressing key challenges in target-setting and target management.

Why is the Draft Corporate Net-Zero Standard Important?

Despite the growing number of economies covered by net-zero or carbon-neutral objectives, the gap between current global emissions trajectories and the necessary reductions remains alarming. The latest UN Emissions Gap report warns that current commitments to cut greenhouse gas emissions put the planet on track for an average 2.7°C temperature rise this century. This highlights the urgent need for credible, science-based targets to guide and accelerate the necessary transformations.

How does this impact your business?

Among several changes proposed by the SBTi, the Draft Corporate Net-Zero Standard 2.0 introduces a new company categorization model to provide more tailored requirements based on company size and geography. Two categories are introduced: Category A companies (large and medium-sized companies operating in higher-income geographies) are required to follow all criteria, while Category B companies (small and medium-sized companies operating in lower-income geographies) are offered increased flexibility with some criteria being optional. This categorization aims to drive climate action across all types of companies while acknowledging differences in size, resources, and operating context.

Our EcoAct Experts answer 8 key questions below.

1. Are these updates final and when do they come into effect?

This document, Version 2.0, is in draft and its criteria will likely change through the public consultation process. The final version is expected to be published at some point in 2026.

2. What if I am looking to set near-term targets or long-term targets now?

Companies will continue to be able to set near-term targets for 2030 under the current SBTi frameworks throughout 2025 and 2026. This applies to both the Corporate Net-Zero Standard Version 1.2 (for companies setting comprehensive net-zero targets) and the Near-Term Criteria Version 5.2 (for companies focusing only on near-term science-based targets). Near-term targets set in 2025 and 2026 under current criteria will remain valid for five years or until the end of 2030, whichever comes first. The EcoAct team recommends moving forward with any ongoing or planned near-term target setting activities.

Regarding long-term net-zero targets, the draft standard indicates that from 2027, companies will use Version 2.0 to set both near-term and long-term targets. The SBTi has committed to providing a transition pathway for companies with targets validated in 2025 and 2026 to align with Version 2.0, with further details to be released soon.

While we await these specific details, companies should continue working toward their climate commitments under the current guidance, as the SBTi emphasizes that efforts under Version 1.2 will continue to be relevant and provide a strong foundation for future alignment with Version 2.0. The EcoAct team is actively seeking clarification from the SBTi to provide a more definitive recommendation on proceeding with long-term target-setting.

3. What if I have an existing target?

Existing near-term targets will remain valid until 2030, or the end of their target timeframe, whichever comes first. Near-term targets with a target year after 2030 will need to be updated.

For companies with existing long-term targets, the draft standard doesn’t yet provide specific guidance on if or when these will need to be updated to align with Version 2.0. The SBTi has indicated that additional details about transition processes will be provided in the second public consultation scheduled for later this year.

4. What if my existing targets are coming due (or are up for review) in 2026?

The SBTi will provide further details on the intended renewal process for companies with previously validated near-term targets in the second public consultation, scheduled for later this year.

5. Are Scope 3 targets no longer required in the draft Corporate Net-Zero Standard Version 2.0?

Near-term targets will be required across Scopes 1, 2 & 3 for Category A companies (large and medium-sized companies in higher-income geographies).

Category A companies are required to set long-term targets for Scopes 1 and 2 only. Long-term Scope 3 targets are not currently required, though this is under consultation and may change in the final version of the standard. 

6. What does this mean for our carbon credit investments and BVCM activities?

The Draft Standard continues to recognize Beyond Value Chain Mitigation (BVCM) as important but keeps it separate from requirements for neutralizing residual emissions at the net-zero target date. BVCM activities—such as investing in climate solutions, financing external emission reduction projects, and purchasing carbon credits—remain encouraged as valuable contributions to global climate goals.

The SBTi is using the consultation process to gather input on how to better recognize BVCM activities, establish reporting requirements, and integrate these efforts into corporate climate strategies. Notably, the guidance recommends that companies should aim to address 100% of their remaining emissions in line with recognized third-party frameworks as well as take responsibility for historic emissions. This implies that companies are encouraged to utilize broader frameworks—such as the VCMI or ISO 14068—to guide their current BVCM activities. It also reinforces the recommendation for companies to engage in BVCM as a means of addressing annual ongoing emissions.

7. How does the Draft Standard approach residual emissions neutralization, and how might our existing carbon credit investments align with future requirements?

The Draft Standard requires companies to neutralize any residual emissions that remain at the net-zero year and thereafter.

For addressing projected residual emissions between now and the net-zero target year, the draft proposes three options specific to Scope 1 emissions:

Option 1: Companies may be required to set mandatory removal targets alongside abatement targets to address projected residual Scope 1 emissions.

Option 2: Companies may receive recognition for setting voluntary removal targets for Scope 1 emissions.

Option 3: Companies may have flexibility to address residual Scope 1 emissions through additional reductions, removals, or a combination of both.

For Scope 3 residual emissions, Category A companies must ensure these are neutralized either by the responsible value chain partner or by providing support to enable their neutralization.

All options limit removals to the small portion of emissions projected to remain at the net-zero target year (typically <10% of base year emissions). Removal activities must adhere to high-integrity quality and sustainability criteria, with specific standards to be defined through the consultation process. The draft also suggests approaches for implementing removals that recognize the evolving landscape of carbon removal technologies, including considerations for transitioning to more permanent removal solutions over time.

Companies currently investing in high-quality carbon removal credits may find their approach already aligned with the draft standard’s direction. As implementation details continue to be refined, focusing on high-integrity removals while maintaining flexibility will position companies well for alignment with the final standard. This creates an opportunity for companies to proactively engage with the carbon removals market now. Planning ahead for removal requirements can help companies integrate these considerations into their climate strategies and financial planning, potentially optimizing costs while ensuring readiness for the new standard requirement.

8. What are the other key changes in the Draft Corporate Net-Zero Standard Version 2.0?

Below is a summary of the most significant updates, along with EcoAct’s perspective on how they might impact you and your organization.