SBTi V2.0: What the Category Category B Changes Mean for Scope 3

Understanding the SBTi V2.0 and the New Category Category B Changes

The Science Based Targets initiative (SBTi) has released its updated Corporate Net-Zero Standard V2.0, a significant milestone in corporate climate action. This new version refines the pathway for businesses aiming to align with global net-zero goals. One of the most important updates is the introduction of two distinct company classifications: Category A and Category B. This change acknowledges that a one-size-fits-all approach to decarbonisation has its limits. For sustainability and procurement leaders, understanding the nuances of these classifications is vital, especially the specific category category b changes that alter requirements for Scope 3 emissions targets.

These categories are designed to tailor the target-setting requirements based on a company's specific context, likely considering factors like size, sector, and overall emissions impact. The goal is to make the standard more accessible and practical without compromising scientific rigour. For many organisations, particularly those navigating the complexities of their value chain, these changes bring both clarity and new strategic questions. This article explores the differences between Category A and B, focusing on what the new framework means for your Scope 3 strategy and how you can prepare effectively.

What Are the New SBTi Company Categories?

The introduction of Category A and Category B is the SBTi's answer to the diverse landscape of global business. While the full criteria for each category are detailed in the official standard, the core purpose is to differentiate the level of requirement, particularly for value chain emissions. This ensures that the most significant emitters face the most stringent requirements, while providing a more flexible path for others.

Previously, the requirements for Scope 3 target setting were applied more uniformly. The V2.0 standard recognises that a company's ability to influence its value chain can vary dramatically. A large multinational retailer has a different level of leverage over its suppliers than a smaller, specialised manufacturer. By creating these two tiers, the SBTi aims to encourage broader adoption of science-based targets by making the entry points more manageable for a wider range of companies.

It is crucial for every organisation to consult the SBTi's V2.0 documentation to determine its correct classification. This self-assessment is the foundational step for understanding your obligations and opportunities under the new standard. Misclassifying your organisation could lead to setting inappropriate targets, wasting resources, or failing validation.

The Core SBTi Category Category B Changes for Scope 3 Targets

The most substantial difference between the two categories lies in the requirements for near-term Scope 3 targets. Under the new standard, these requirements have been adjusted to reflect a company's classification, representing a significant shift in approach.

According to criterion CNZS-C14 of the new standard:

• Category A companies: It is mandatory to set near-term Scope 3 targets that cover significant Scope 3 categories. This continues the established practice of requiring large emitters to take direct responsibility for their value chain footprint.
• Category B companies: Setting near-term Scope 3 targets is now optional.

This is a landmark adjustment. For companies qualifying as Category B, the removal of the mandatory requirement for near-term Scope 3 targets offers significant flexibility. It lowers the barrier to getting started with the SBTi, potentially encouraging more businesses to commit to a net-zero journey. However, optional does not mean irrelevant. While the formal target may not be required for validation, the pressure to manage and reduce value chain emissions from investors, customers, and regulators continues to grow.

For Category B companies, the change from mandatory to optional Scope 3 targets is not an invitation to ignore the value chain. Instead, it is an opportunity to build a robust data foundation and engagement strategy without the immediate pressure of a formal target.

Ignoring Scope 3 emissions, which for many companies represent over 80% of their total footprint, is a strategic risk. The category category b changes simply provide a different timeline and approach. Progressive Category B companies will use this flexibility to their advantage, focusing on building a high-quality emissions inventory and engaging key suppliers to identify reduction hotspots. This proactive stance ensures they are prepared for future requirements and can demonstrate climate leadership to their stakeholders.

Beyond Scope 3: Other Key Distinctions

While the adjustments to Scope 3 are the most discussed, they are not the only differences. The category category b changes also extend to long-term targets for direct emissions. Specifically, criterion CNZS-C11 outlines different requirements for long-term Scope 1 targets.

Here is a simple breakdown of the key differences:

1. Near-Term Scope 3 Targets: As detailed above, these are mandatory for Category A companies but optional for Category B. This is the most significant change affecting how companies approach their value chain.
2. Long-Term Scope 1 Targets: Category A companies are required to set long-term targets to reduce their Scope 1 emissions to residual levels by 2050 at the latest. For Category B companies, this long-term Scope 1 target is optional.
3. Scope 2 Targets: The requirements for Scope 2 targets, which cover purchased energy, remain largely consistent for all companies. Both categories must set near-term Scope 2 targets, while long-term targets are optional for all.

These distinctions reinforce a clear principle: the standard holds companies with the largest direct and indirect footprints to the highest level of accountability, while creating a more phased approach for others. The focus remains on driving economy-wide decarbonisation, but the pathway is now more tailored.

How to Prepare for the New SBTi Standard

Whether your organisation falls into Category A or B, the direction of travel is unmistakable. A deep understanding of your entire carbon footprint, especially Scope 3, is no longer a niche activity but a core component of business strategy. The category category b changes simply alter the pace, not the destination.

1. Determine Your Company's Category

The first step is to thoroughly review the SBTi V2.0 standard and its accompanying guidance to accurately classify your organisation. This will define your specific target-setting obligations and inform your entire climate strategy.

2. Measure Your Scope 3 Footprint (Regardless of Category)

Even if a near-term Scope 3 target is optional, measurement is not. You cannot manage, reduce, or report on what you do not measure. Establishing a comprehensive and reliable Scope 3 inventory is essential for identifying risks, finding efficiencies, and engaging suppliers effectively. The old way of using spend-based averages from spreadsheets is no longer sufficient. Modern platforms can provide verified, supplier-specific data that offers a true picture of your value chain emissions.

3. Prioritise Supplier Engagement

Decarbonisation is a team sport. Your Scope 3 footprint is the sum of your suppliers' Scope 1 and 2 emissions. Engaging them is the only way to achieve meaningful reductions. Start by identifying your emissions hotspots and collaborating with those key suppliers on their own decarbonisation journeys. Providing them with scorecards, benchmarks, and support can accelerate progress for everyone.

4. Leverage Technology to Move from Data to Action

Managing Scope 3 data for hundreds or thousands of suppliers is impossible with manual processes. A dedicated platform can automate data collection, normalise information from different sources, and provide audit-ready outputs. This frees up your team from chasing data to focusing on what matters: implementing reduction initiatives. By unifying verified supplier data in one place, you gain a single source of truth to set credible targets, report with confidence, and make procurement decisions that align with your climate goals.

The SBTi's Corporate Net-Zero Standard V2.0 marks a maturing of corporate climate action. The introduction of Category A and B provides tailored, pragmatic pathways for businesses. While the category category b changes offer flexibility on near-term Scope 3 targets, the underlying message is clear: a company's climate responsibility extends deep into its value chain. Proactive organisations will seize this moment to build the data infrastructure and supplier partnerships needed to lead the transition to a net-zero economy.