The Science Based Targets initiative (SBTi) has released the initial draft of Corporate Net-Zero Standard V2, a proposed update to its framework for assessing, certifying, and tracking corporate decarbonization commitments. The revised standard aims to strengthen science-based climate target setting and ensure companies’ net-zero goals align with global climate objectives.

Key Updates in the Draft Standard

• Scope 2 Targeting: Companies must set explicit targets to drive the transition to zero-carbon energy.
  

• Scope 3 Flexibility: Large companies must establish value chain emissions goals, with increased flexibility in target setting.
  

• Decarbonization Tracking: Stronger requirements for reporting progress towards net-zero targets.
  

• Carbon Removal Targets: Exploration of interim targets for residual emissions and recognition of Beyond Value Chain Mitigation (BVCM) investments.
  

• Zero-Carbon Electricity: A shift from renewable energy targets to technology-agnostic zero-carbon electricity by 2040.
  

• Net-Zero Progress Assessment: Standardized formulas for tracking emissions reduction performance over time.
  
  

Background & Controversy

SBTi introduced its first Corporate Net-Zero Standard in 2021 and announced plans for an update in early 2024. However, its proposal to allow carbon credits for Scope 3 emissions sparked internal controversy, leading to staff backlash and the resignation of former CEO Luiz Amaral in July.

In the new draft, SBTi has clarified that offsetting through external carbon credits will not be permitted. Instead, companies may neutralize residual emissions at the net-zero target year after exhausting all abatement measures. The draft also includes three proposed options to address residual emissions, such as introducing interim carbon removal targets.

Next Steps

SBTi has launched a public consultation on the draft standard, open until June 1, 2025. The organization will also develop a transition pathway to support companies setting targets under the current framework while V2 is finalized.

Stay ahead in sustainability compliance with Global PCCS —where expert insights meet the latest regulations. Unlock a future where compliance fuels sustainability, helping your business thrive in a greener, well-regulated world. For more information, contact us at info@globalpccs.com