SBTi's Flexible Path to Net-Zero
New SBTi Net-Zero Standard Guides Companies with Flexible, Real-World Decarbonization Plans
Anonymous
Key Points
1
SBTi said the Corporate Net-Zero Standard Version 2.0 followed an extensive development process, including “two public consultations, pilot testing and the convening of multiple expert working groups.”
2
SBTi explicitly addressed its rationale for the updated rules: it made “an explicit choice to recognize that companies do not control everything, and that pretending otherwise does not serve anyone,” and reiterated an expectation that companies “deploy every lever within your control,” be transparent about barriers, and show how they address them over time.
3
The WSJ report explains the scope shift: prior SBTi guidance pushed companies to focus on decarbonization in their own supply chain (e.g., using renewable electricity on site), while market-based actions outside the supply chain—such as purchasing sustainable-aviation-fuel credits—weren’t previously allowed to count toward SBTi-approved net-zero targets; under V2, these methods can be considered core to a net-zero strategy.
4
SBTi CEO David Kennedy framed the update as a change in role from “ambition-setter” to “transformation partner,” and said the standard aims to help businesses embed climate action across decision-making, identify and tackle “systemic barriers” blocking progress, and encourage pre-competitive collaboration between companies.
The Science Based Targets initiative released Corporate Net-Zero Standard Version 2.0 on June 11, 2026, marking the biggest overhaul of the world's leading corporate climate framework since its launch in 2021. The updated standard shifts SBTi's role from what CEO David Kennedy calls an "ambition-setter" to a "transformation partner" — one that helps over 11,000 companies actually deliver on their climate commitments, not just set them. ESG Today
The headline change is a "best-efforts" framework. Under this approach, companies can stay aligned with the standard even if external barriers slow their progress — as long as they are transparent about what is blocking them and what they are doing about it. SBTi said it made "an explicit choice to recognize that companies do not control everything, and that pretending otherwise does not serve anyone." African Sustainability Matters
Best-Efforts Framework Replaces One-Size-Fits-All Net-Zero Mandate
The original V1.0 standard, launched in 2021, required all companies to reach absolute net-zero by 2050. V2.0 drops that universal rule. Instead, it introduces sector-specific pathways and an "implementation hierarchy" — meaning companies must first cut direct emissions, then use market-based tools only where direct cuts are not feasible. ESG Today
Board Chair Francesco Starace put it plainly: "Ambition alone is not enough — delivery is paramount." Companies must now produce a board-approved Corporate Transition Plan within 12 months of getting their targets validated. Target validation is also no longer a one-time event. V2.0 introduces a renewal check every five years, plus periodic spot checks. African Sustainability Matters
Market-Based Credits Now Count Toward Net-Zero for the First Time
Under the old rules, companies had to cut emissions in their own supply chains. Buying outside credits — like sustainable-aviation-fuel certificates — did not count toward an SBTi-approved net-zero target. V2.0 changes that. Environmental Attribute Certificates and commodity certificates for things like green steel and cement can now be counted as core parts of a net-zero strategy. Yahoo Finance
A new "Ongoing Emissions Responsibility" (OER) framework also requires companies to pay for residual emissions they cannot yet eliminate — using high-integrity carbon credits. Carbon removal options like direct air capture and reforestation credits are now allowed, though those provisions phase in later. By 2050, at least 41% of a company's carbon removal portfolio must come from long-lived, durable sources. ESG Today
Climate Advocates Warn Flexibility Could Dilute 1.5°C Goals
Not everyone welcomed the changes. Climate groups focused on durable carbon removal expressed what one described as "radical disappointment." Their concern: V2.0 allows nature-based credits — like tree-planting, which can be reversed by fire or drought — to cover up to 59% of a company's residual emissions footprint all the way to the 2050 net-zero date. Critics say this lets companies avoid investing in permanent removal technologies. ESG Today
Legal analysts have flagged another risk. The "best-efforts" language is helpful for keeping companies in the standard, but it may create problems under strict greenwashing laws — like the EU's Green Claims Directive — which demand hard performance data, not just good-faith effort. Some financial analysts also noted that SBTi's new "transformation partner" role looks more like a consultancy, which could raise questions about its independence as a validator. African Sustainability Matters
What Comes Next: Key Dates for Companies Using the Standard
V2.0 does not take effect immediately for all companies. Starting February 1, 2027, companies can submit applications using the new standard. It becomes mandatory for all new science-based targets on January 1, 2028, when V1.3 is fully retired. The development process involved two public consultations, pilot testing, and input from more than 900 stakeholders. just-food.com
SBTi also launched a new internal subsidiary, SBTi Services, to speed up target validation. Wait times hit a peak of 47 days in 2024. The new unit aims to cut that to 30 days. SBTi's Scope 3 rules also tighten slightly: only emissions categories that make up less than 5% of a company's total Scope 3 footprint can now be left out of targets. ESG Today
Sentiment
Mostly PositiveNEGATIVENEUTRALPOSITIVE
Publishers
11
Articles
2
Reach
13
A
AnonymousAuthor
