The Science Based Targets initiative (SBTi) has released the second version of its Corporate Net Zero Standard. This builds on the first version of the standard that was released in 2021 and aims to provide a framework to assess, certify and track companies’ carbon reduction commitments and support science-based climate target setting.
Changes from the first version
The latest version of the corporate net zero standard has been updated focusing on six key areas:
• Differentiated approaches across markets – The new standard introduces accommodations for small and medium sized companies, and companies in lower-income countries.
• Setting actionable, context-specific targets – Targets should be set that reflect emissions reductions in different contexts, for example geographically, by sector or in supply/value chains. The link between targets and transition planning has also been strengthened.
• A ‘best-effort’ basis is required with transparent disclosure – Targets should be pursued on a best effort basis, and key assumptions and dependencies should be disclosed transparently.
• Mobilise all available levers to achieve emissions reductions – The new standard introduces an implementation hierarchy which ranks actions, from those that directly reduce emissions in an entity’s own operations down to broader activity pools and sector-level actions.
• Continuously assess, disclose and strengthen progress – A new annual process of assessment and reporting which covers progress, barriers to implementation and actions being taken to overcome these barriers, and setting new targets. This emphasises continuous improvement and progress within the SBTi framework of achieving net-zero.
• Maintaining ongoing emissions responsibility – The new standard does allow the use of ‘high-integrity’ carbon credits and other similar mechanisms as a complementary part of a company’s net-zero targets, but emphasises that this is not a substitute for companies reducing their carbon emissions.
Until 31 January 2028, companies will be able to use either version 1.3.1 or the new version 2.0 when submitting targets to SBTi Services. After that, the new standard will become mandatory for all submissions. The new standard can be accessed here.
Our thoughts
We are pleased to see the SBTi continue to improve the Corporate Net-Zero Standard. Setting effective, measurable and verifiable targets is a vital part of sustainability reporting frameworks around the world. As scientific understanding and climate science advances it is important to update the guidance for reporting entities in this area.