SBTi Corporate Standard V2: Key Changes to Scope 1, 2 & 3 Decarbonisation

On the 11th of June 2026 the Science Based Targets initiative (SBTi) released version 2 of their Corporate Net-Zero Standard. This update focuses on a transition from setting ambitious targets to Net-Zero implementation. This update is designed to focus on what is changing in the standards of SBTi, for more information on the SBTi please see here.

SBTi released version 2 of their Corporate Net-Zero Standard, aligning with their recent 2026-2030 Strategy. Version 2 (V2) focuses on strengthening value chain (Scope 3) emissions and integration of target achievement and continuous improvement. The latest version will also introduce formal company categorisation with differentiated requirements based on company category.

The current Corporate Net-Zero Standard (Version 1.3) is still valid for companies to establish their new targets up until 31 December 2027.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.

Key SBTi Updates

• Company categorisation: Version 2 places companies in two categories:
  • Category A: Category A includes all large companies, and medium-sized companies located in high-income countries.
  • Category B: Category B includes all small companies, and medium-sized companies in lower-income countries.
• Target implementation: V2 introduces mandatory 5-year requirements for target reviews. This will utilise a continuous evaluation approach. The updated standard also implements an implementation hierarchy to prioritize direct, activity-level emissions deductions before allowing actions within shared systems or at the sector level.

Scope 1 Changes

• Target setting: V2 will separate out Scope 1 and 2 targets covering 100% of direct emissions. Companies will have three options for setting Scope 1 emission targets:
  1. Absolute emissions reduction - a linear trajectory to net-zero calculated via the SBTi tool from target base year.
  2. Asset transition target - Best used for companies whose capital stock is non-linear, this methodology uses planned asset phase-out milestones and science-based carbon budget.
  3. Emission intensity reduction - Based on sector specific pathways.
• Long-term targets: unlike in version 1, long-term targets are only required for companies that are setting near-term Scope 1 emissions intensity or asset transition targets.

Scope 2 Changes

• Target boundary: V2 of this standard will separate Scope 1 and 2 emissions and will need to cover 100% of a company’s purchased electricity, heat steam and cooling. These targets can be either an emissions target or an alignment target. Alignment targets have also been revised from renewable to low-carbon electricity. Category A companies with rapidly increasing electricity demand (in excess of 20% p.a.) must set emissions targets as the option to set emissions intensity targets has been removed
• Location-based reporting: Scope 2 emissions targets are based on the physical inventory (location-based reporting).

Scope 3 Changes

• Target-setting: Modifying supplier/customer engagement targets, V2 expands into broader supplier/customer alignment pathways measuring the share of “in-transition” or “net-zero aligned” suppliers/customers.
• Alignment: Introduction of new alignment methods for volume, product, use, and product end-of-life. This will provide actionable metrics linked with direct commercial levers and emissions reduction targets.
• Long-term targets: V2 has made setting long-term Scope 3 targets optional for all companies. The V1 Scope 3 economic and physical intensity method have been removed due to the lack of science-based reference pathways for these metrics.

Develop Your SBTi Strategy

Companies aligning with the SBTi require suitable action plans for decarbonisation in order to meet targets. NUS provide a range of supporting sustainability services to directly enable rapid decarbonisation and long-term strategy implementation. The Sustainability division guide companies across all markets and sectors with quantifying emissions, achieving carbon reduction and ensuring alignment with the latest SBTi standards. Get in touch at contact@nusconsulting.com.