Key Changes in the SBTi Corporate Net-Zero Standard V2

SBTI

Sunny Hsiao

Growth Marketer

4 min read

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Key Changes in the SBTi Corporate Net-Zero Standard V2 Draft

The Science Based Targets initiative (SBTi) Corporate Net-Zero Standard (CNZS) is the globally recognized gold standard for corporate climate action. The release of the CNZS Version 2 (V2) consultation draft signals a major evolution in corporate decarbonization: one that prioritizes accountability, rigor, and the urgent need to drive real physical change.

Version 2 builds on the foundation of the initial standard (V1.2/V1.3) but introduces significant revisions across all three scopes of emissions, formalizing new mechanisms that aim to accelerate action and ensure corporate claims are robust and verifiable.

Here is a breakdown of the core differences you need to know:

Key Differences Between CNZS V2 Draft and V1

Feature	CNZS Version 1 (V1.2/V1.3)	CNZS Version 2 (Draft)
Scope 1 & 2 Targets	Targets could be aggregated for Scope 1 (direct) and Scope 2 (purchased energy) emissions.	Requires separate, dedicated targets for Scope 1 and Scope 2 to ensure action in both areas.
Scope 1 Target Coverage	Allowed exclusion of up to 5% of total Scope 1 and 2 emissions (when aggregated).	Requires 100% coverage of Scope 1 emissions. Introduces new options like Asset Decarbonization Plans.
Scope 2 (Low-Carbon Electricity)	Primarily relied on market based mechanisms (like unbundled Renewable Energy Certificates/GOs), which were criticized for lacking direct impact.	Tightens integrity by introducing stricter criteria, including a phased approach to require geographic matching and an eventual goal of temporal (hourly) matching for large electricity consumers.
Scope 3 (Value Chain) Target Boundary	Required a minimum percentage coverage of total Scope 3 emissions (e.g., ≥67% for near term targets).	Shifts to a focus on "relevant" sources (categories ≥5% of total Scope 3 emissions) and emissions intensive activities using an impact based mapping approach. Places greater emphasis on Alignment Targets (e.g., supplier engagement).
Ongoing Emissions	Addressed through Beyond Value Chain Mitigation (BVCM), which was a voluntary recommendation (not formally recognized in the target setting pathway).	Formalizes a new framework called Ongoing Emissions Responsibility (OER). It introduces two tiers of formal recognition (Recognized and Leadership) to incentivize companies to address ongoing emissions (i.e., those not yet abated) before the net zero year.
Accountability & Monitoring	Annual reporting on progress, but lacked a standardized, required method for progress assessment. Limited requirements for third party assurance.	Introduces a cyclical validation model and requires companies to use defined formulas for end of cycle performance assessment. Mandates limited assurance for the GHG inventory for Category A companies (large/medium in high income countries).
Transition Plan	Not a specific requirement within the target setting criteria.	Requires companies to publish a transition plan setting out the roadmap for achieving their targets.

The Shift in Focus: From Goal Setting to Delivery

The updates in Version 2 signal a clear shift in the focus of the standard: moving beyond merely setting ambitious goals toward embedding accountability, rigor, and specific, verifiable actions into the corporate transition strategy.

Decarbonization Integrity: The most notable change is the push for real world impact. By mandating the separation of Scope 1 and Scope 2 targets and introducing stricter rules for Scope 2 (such as geographic and temporal matching for electricity sourcing), V2 ensures that companies are actively driving tangible decarbonization in their energy use, rather than relying on contractual instruments alone.
Target Effectiveness: For the value chain (Scope 3), the new standard moves away from arbitrary percentage coverage to an impact based approach. This allows companies to concentrate their efforts where they have the most influence and where the largest emission sources reside, ensuring that action is strategic and high leverage.
Mobilizing Climate Finance: The introduction of the formal Ongoing Emissions Responsibility (OER) framework, which replaces the term BVCM, is designed to incentivize greater investment in climate solutions outside a company's own value chain. By introducing formal recognition tiers, the SBTi encourages companies to take financial responsibility for their ongoing emissions while they work toward their deep abatement goals.
Accountability: The mandatory requirements for transition plans and third party assurance are designed to significantly increase transparency. The new cyclical validation system, which includes a mandatory end of cycle performance assessment, ensures continuous improvement and holds companies accountable for their targets over the entire duration of the commitment.

The CNZS V2 is not just an update; it's a retooling of the net zero journey to ensure corporate ambition translates into credible, measurable action aligned with limiting global warming to 1.5°C. Companies should begin planning now to align with these new, more rigorous requirements.