SBTi Updates

SBTi Updates – What’s New, and Why Does It Matter?

What is SBTi?

The Science Based Targets initiative (SBTi) is a globally recognized framework for developing and validating science-based climate targets.

The framework helps organizations align greenhouse gas reduction targets with climate science and the objectives of the Paris Agreement. SBTi is widely regarded as the leading methodology for setting credible emissions reduction targets and demonstrating climate leadership.

SBTi is a collaboration between CDP, the UN Global Compact, the World Resources Institute (WRI), and WWF.

Companies with validated SBTi targets demonstrate that their climate ambitions are grounded in scientific methodologies rather than internally defined aspirations.

What's New – Proposed Changes to the Net-Zero Standard?

The revised standard remains under development, but several major themes have emerged from the consultation draft.

Greater Flexibility for Scope 3 Emissions
Scope 3 emissions are often the largest source of emissions for many companies and among the most challenging to influence directly.

The proposed draft introduces additional flexibility, including options such as:

- Supplier engagement targets
- Green procurement initiatives
- Increased revenue from low-carbon products and services
- Focus on emissions-intensive suppliers and activities

The aim is to improve practicality while maintaining climate ambition.

Increased Focus on Action and ProgressSBTi is proposing mechanisms that recognize companies not only for setting targets but also for demonstrating measurable progress. The revised framework seeks to incentivize implementation and accelerate real-world emissions reductions. 

Stronger Emphasis on Transition Plans
Organizations are expected to provide greater transparency regarding how targets will be achieved.

This includes:

- Strategic integration of climate objectives
- Capital allocation and investments
- Operational decarbonization initiatives
- Long-term net-zero roadmaps

Transition planning is expected to become a more prominent component of target validation and reporting. 

New Approaches to Carbon Removals and Climate Finance

The consultation draft explores mechanisms that could recognize voluntary climate action beyond a company's direct value chain. Examples include:

- Beyond Value Chain Mitigation (BVCM)
- Interim carbon removal targets
- Management of residual and hard-to-abate emissions

At the same time, direct emissions reductions remain the primary focus of the framework.

More Tailored Requirements

The revised standard proposes a more differentiated approach based on:

- Company size
- Geography
- Sector
- Emissions profile

The objective is to make the framework more practical and scalable across different business contexts. 

Why Is This Relevant for Companies?

Although SBTi remains voluntary, science-based climate targets are increasingly becoming a business expectation.

There are three primary reasons to follow these developments:

1. Growing Value Chain Expectations

2. Many large organizations already require suppliers to disclose climate targets and emissions data.

3. A validated SBTi target can strengthen competitiveness in procurement processes and customer assessments.

Alignment with CSRD, IFRS, and CDP

Many sustainability reporting frameworks require companies to disclose climate targets, transition plans, and decarbonization strategies. SBTi provides a credible methodology that supports these expectations.

Preparing for Future Market Expectations

The revised Net-Zero Standard provides a strong indication of how corporate climate governance may evolve in the coming years. Companies that begin building capabilities now are likely to be better prepared for future requirements.

 

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Sources: SBTi Draft Corporate Net-Zero Standard V2 Public Consultation (March 2025), SBTi Consultation Materials and Technical Summary