Following consultation that closed December 2025, the Science Based Targets initiative (SBTi) has released an updated draft of the new Corporate Net-Zero Standard Version 2. It aims to be a stronger and more inclusive standard to help companies translate climate science into an actionable plan. This update is designed to focus on what is changing in the SBTi standards, for more information on the SBTi please see here.
The current Corporate Net-Zero Standard (Version 1.3) are still valid for companies to establish their new targets until 31 December 2027. Once published, companies will have the choice to set targets in line with Version 2 or Version 1.3 of the Corporate Net-Zero Standard up until 1 January 2028, when all companies will be required to use Version 2.
Companies that do not currently have targets set with SBTi are encouraged to do so now, as any targets made under Version 1.3 will continue to be relevant and valid.
Version 2 of the Corporate Net-Zero Standard will introduce scope-specific targeting which will enable companies to submit separate targets for each scope. This allows targeting that focuses on the biggest impacts for decarbonization for each individual circumstance rather than generalised targets. Version 2 also divides companies into two categories:
- Category A: large companies in all countries and medium-sized companies in high-income countries.
- Category B: all other companies.
Changes and Clarifications to Scope 1
| Topic | First Consultation Draft | Second Consultation Update |
|---|---|---|
| Integration | Sector-specific methods and pathways had been partially incorporated in the Standard. | Full integration of existing pathways: clarifying how the Corporate Net-Zero standard is related to the other SBTi standards. |
| Target Setting | Two proposed methods for emissions-based targets: Linear Contraction (LC) or Budget Conserving Contraction (BCC); as well as inclusion-based methods. | Emissions-based targets to focus on Linear Contraction or the Sector Decarbonisation Approach. |
| Performance | A Proposal that would enable companies to adjust their next targets, based on performance. | Subsequent targets can be adjusted according to performance. This can be done following the validation cycle using method design. |
Changes and Clarifications to Scope 2
| Topic | First Consultation Draft | Second Consultation Update |
|---|---|---|
| Ambition | Near and long-term Scope 2 targets require for all companies. |
Near-term targets will be required for all companies. Long-term targets will be required for Category A companies and optional for Category B companies. |
| Target boundary | 100% Scope 2 emissions covered by targets. |
Long-term targets need to cover 100% of Scope 2. Near-term targets will include mechanisms to exclude limited amounts of electricity, heat, steam and cooling to align with the International Energy Agency Net Zero Emissions scenario. |
| Target setting | All companies must set a location-based target, and either a market-based OR and electricity purchasing target. |
Near-term targets for low-carbon electricity alignment is required. Long-term targets will focus on low-carbon electricity alignment, however, it is optional to choose location or market-based. |
| Purchasing electricity | The introduction of criteria for purchasing zero carbon electricity | Developing principles to guide the potential use of EACs (Environmental attribute certificates), including low-carbon electricity. |
Changes and Clarifications to Scope 3
| Topic | First Consultation Draft | Second Consultation Update |
|---|---|---|
| Target boundary |
Near-term: Scope 3 categories that are more than 5% of the total Scope 3 emissions; and activities that are
emissions intensive and more than 1% of Scope 3 emissions. Long-term: 100% of Scope 3 emissions covered. |
Refocus target setting on the highest-priority value chain emission sources. Near term: Scope 3 categories that are more than 5% of the total Scope 3 emissions; and targets on priority emissions. Long-term: 100% of scope 3 emissions covered. |
| Target setting | Introduction of new alignment options including emissions reduction and mandatory supplier engagement targets. | Introduce three main options for setting targets to reflect the complexity of value chain emissions. These are emissions intensity, activity alignment, and counterparty alignment. |
| Performance |
Provides nuance for "hard to trace" emissions. Direct mitigation: actions that can be linked directly to a known emission source or activity. Indirect mitigation: actions outside the companyโs direct value chain. |
Companies will report mitigation efforts on four levels: activity, counterparty, activity pool, and sector |
Note: Version 2 of the Science Based Targets initiative Corporate Net-Zero Standards is still in the draft phase and is subject to change and finalisation.
Ensuring Compliance
Navigating the sustainability landscape and latest and long-term requirements with the SBTi can benefit from an expert review. NUS supports clients with every stage of the journey with the SBTi, including full Scope 1, 2 and 3 emissions quantification, guidance through the application and portal process and developing bespoke decarbonisation strategies. To discuss in more detail, get in touch at contact@nusconsulting.com or contact us online.