What SBTi’s Net-Zero Standard Version 2.0 Means for Your Business

The Science Based Targets initiative (SBTi) released its Corporate Net-Zero Standard Version 2.0 in June 2026, marking the most substantial revision to the framework since the original standard launched in 2021. For the more than 11,000 companies currently operating within the SBTi framework (and the many more evaluating whether to commit) this is a fundamental rethink of what it means to have a credible, science-based net-zero commitment.

The message at the heart of Version 2.0 is direct: setting a target was never the hard part. Delivering on it is. The SBTi has spent the last decade learning from companies that committed in good faith and then encountered fragmented supply chains, unavailable technologies, misaligned investment cycles and Scope 3 emissions that depended on the decisions of thousands of independent actors. Version 2.0 is built to address those realities, not to ignore them.

The implications are significant: Version 2.0 shifts the focus from setting targets to implementing them. It connects climate ambition directly to business decisions: capital allocation, procurement strategy, supplier engagement and long-lived asset management. It introduces mandatory transition plans, rolling target base years, a structured implementation hierarchy and a new approach to ongoing emissions responsibility. And it raises the bar on governance, assurance and transparent progress reporting (Science Based Targets Initiative (SBTi, 2026).

Version 2.0 takes effect on February 1, 2027, while Version 1 remains available for new submissions through the end of 2027.

If you have not yet reviewed the standard in detail, this guide will help you understand what has changed, why it matters, and what your organization should be doing right now.

What Is the SBTi Corporate Net-Zero Standard?

The SBTi Corporate Net-Zero Standard is the global benchmark for science-based corporate climate target-setting. It defines how companies should set, validate, implement, and report on emissions reduction targets that are consistent with limiting global temperature rise to 1.5°C, the threshold established by the Paris Agreement.

Unlike voluntary pledges or self-declared net-zero commitments, SBTi-validated targets are assessed by independent validation bodies against a defined methodology grounded in climate science. This external validation is what gives SBTi recognition its weight with investors, customers, regulators, and ratings agencies worldwide.

Version 2.0, effective from February 1, 2027, replaces both the Near-Term Science Based Targets Criteria and the earlier versions of the Corporate Net-Zero Standard. It consolidates these into a single, integrated framework covering near-term targets (five-year cycles), long-term targets (to 2050 or earlier), optional net-zero targets, and introduces a new framework for ongoing emissions responsibility, initially as a voluntary recognition program. (Science Based Targets Initiative. Corporate Net-Zero Standard Version 2.0 (SBTi, 2026).

What Has Changed in Version 2.0?

Version 2.0 introduces changes across every dimension of the standard. Below are the developments that will have the greatest practical impact on your organization.

   1. A Two-Tier Company Classification System That Puts   Large Companies on Notice

Category A covers large companies globally (net turnover ≥ €450M or ≥1,000 FTEs) and medium-sized companies in high-income countries. These organizations face the full complement of Version 2.0 requirements, including mandatory Scope 3 targets, transition plan disclosure, and third-party assurance of emissions data.

Category B covers small companies worldwide and medium-sized companies in lower-income countries. Several Category A requirements, including Scope 3 targets, assurance and transition plan disclosure, are optional for Category B companies, though the SBTi strongly encourages them to go beyond the minimum.

In practice, most multinational corporations, listed companies, and large private businesses will fall into Category A. Companies should confirm their classification at registration, as it applies for the full five-year target cycle.

  2. Mandatory Transition Plans and Board-Level Accountability

All companies must now develop a transition plan that sets out the specific actions, timeframes, assumptions and dependencies associated with delivering their targets, along with a high-level path to net-zero by 2050. The plan must be formally approved by the company’s highest governing body (the Board of Directors or equivalent) and must be integrated into corporate strategy.

For Category A companies, the transition plan must be publicly disclosed within 15 months of target validation. The SBTi will validate the presence of a plan and confirm it contains the required elements, but the responsibility for quality and delivery rests with the company. Critically, where companies have identified significant emissions-intensive activities (EIAs) (SBTi, 2026) in their value chain, the plan must include a specific decarbonization roadmap for those activities.

This creates important governance implications. Sustainability teams will need to engage boards and CFOs far earlier in both target setting and delivery. In practice, this means that climate strategy must now be embedded in financial planning, capital allocation and corporate risk management.

This creates important governance implications. Sustainability teams will need to engage boards and CFOs far earlier in both target setting and delivery. In practice, this means that climate strategy must now be embedded in financial planning, capital allocation and corporate risk management.

  3. A Rolling Target Base Year

One of the most technically significant changes in Version 2.0 is the shift from a historical base year (often 2019 or earlier) to a rolling, current-year target base year. At the start of each new target cycle, companies must use the most recent year for which comprehensive emissions data are available as their baseline.

The rationale is clear: calibrating ambition against current emissions rather than a decade-old baseline ensures that targets reflect the company’s actual emissions profile today, including any reductions already achieved. It prevents situations where companies benefit from emissions reductions that occurred before the target period, without being required to build on that progress.

For Category A companies, a minimum of limited third-party assurance of the target base year greenhouse gas (GHG) inventory is now required. This is a meaningful step up from previous version, where assurance was recommended but not mandatory, and it will require companies to put formal assurance processes in place before or alongside target validation.

  4. Scope 1 Targets: Three Options, Including a New Asset Transition Pathway

Version 2.0 retains absolute and intensity-based Scope 1 target options, and adds a significant new pathway: the asset transition target4 (Targets to reduce Scope 1 emissions in line with a trajectory defined by an Asset Decarbonization Plan. The plan shall set out a schedule to abate, retire or decommission GHG-emitting assets in a manner consistent with reaching net-zero emissions by 2050 or earlier, using predetermined milestones (e.g., timeline to phase out investment in new GHG-emitting assets and operation of existing assets) and/or a carbon budget derived from one or more reference science-based pathways). This is designed for companies, particularly in heavy industry, utilities, aviation and shipping, whose capital stock turnover does not follow a linear reduction curve.

Under the asset transition approach, companies develop a transition plan that sets out a schedule for operating existing assets efficiently and replacing them with low-carbon alternatives, using predetermined milestones (e.g., cessation of new investment in emitting assets, decommissioning timelines). The SBTi does not require companies to publish detailed investment plans given commercial sensitivity, but the plan must include a quantitative emissions reduction target for each cycle, grounded in a science-based carbon budget.

Companies choosing intensity or asset transition targets for Scope 1 are required to also set a long-term Scope 1 target (to 2050 at the latest). All approaches work toward net-zero Scope 1 emissions by 2050 at the latest.

  5. Scope 2 Targets: Geographic Matching and Hourly Reporting

Version 2.0 tightens the rules on how companies can implement Scope 2 targets, reflecting ongoing evolution in energy attribute certificate (EAC) markets and the growing debate around additionality5 (Companies shall demonstrate that emissions reductions or removals from projects meet additionality requirements based on established frameworks or standards. The SBTi will develop criteria and processes for recognizing third-party frameworks, standards, and programs, where applicable).

Geographic matching is now required: energy attribute certificates and power purchase agreements must come from the same deliverability region as the company’s electricity consumption. Exceptions apply where companies hold transmission interconnection rights to a neighboring region, or where a PPA covers a project within 36 months of commissioning across interconnected grids.Existing long-term contracts may continue for their full term if they met the previous rules, protecting companies that have already committed to long-term clean energy investments.

A new hourly matching reporting requirement applies to Category A companies with significant electricity consumption. While annual matching remains compliant, companies must now disclose what share of their electricity consumption is matched on an hourly basis. The SBTi has also introduced an optional recognition tier for companies that achieve specified hourly matching thresholds (signaling the direction of travel, even if it is not yet mandatory).

  6. Scope 3 Targets: New Flexibility, New Expectations

Scope 3 target-setting has been one of the most contested areas of the original standard, and Version 2.0 introduces more flexibility while maintaining rigor.

A new concept, Emissions-Intensive Activities (EIAs), requires Category A companies to identify and quantify the most emissions-intensive activities in their value chains (e.g., steel, cement, aluminum, aviation, chemicals), regardless of which Scope 3 category they fall under. Where a significant EIA represents 5% or more of Scope 3 emissions, companies must include a specific decarbonization plan in their transition plans and report on progress.

Companies now have three target-setting options for Scope 3: an overarching absolute emissions reduction trajectory, an overarching supplier/customer alignment target (measuring the share of tier 1 suppliers with science-based targets) or category-specific targets tailored to concentrated emissions sources. This last option is designed to better accommodate companies with complex or highly diverse supply chains.

Allowable exclusions have also been clarified — companies can exclude categories representing less than 5% of Scope 3, activities outside their operational influence (e.g., leased assets they cannot control, downstream processing they cannot influence) and employee commuting. All exclusions must be reported with justification, and a description of how those emissions will be mitigated.

  7. The Implementation Hierarchy: Prioritizing Action at Source

Version 2.0 introduces an implementation hierarchy that prioritizes direct emissions reductions:

• Direct actions: Reduce emissions at source through efficiency, fuel switching, on-site clean energy, or supplier engagement.
• Activity pool actions: Act within shared systems, such as grids, logistics networks or agricultural supply sheds, where emissions cannot be directly controlled.
• Sector-level actions: Use broader sector measures only when activity or pool-level action is constrained and evidence is documented.

Market instruments are still allowed, but companies must show they pursued direct options first. Pool and sector actions support only “system contribution claims,” not company-level emissions reduction claims.

All actions and instruments must meet integrity criteria, including additionality, temporal alignment, unique attribution, and verifiability.

  8. Best Efforts Progress Assessment

Version 2.0 makes SBTi an ongoing transition partner, not just a point-in-time validator. Through the End-of-cycle Assessment6 (Through this process, an SBTi-recognized validation body assesses a company’s conformance with applicable Corporate Net-Zero Standard End-of-cycle Assessment criteria. This evaluation is based on a company-submitted target progress assessment (which, for a Category A company, has been assured by an independent third party). The assessment takes place at the end of the target cycle, and shall be completed within 12 months of the target timeframe. The SBTi intends to introduce minimum progress criteria for companies seeking to revalidate targets after their first cycle under the Corporate Net-Zero Standard V2.0; these will be set out in the SBTi Assurance Manual), companies must report progress, disclose delivery barriers and explain how they are addressing them.

The standard uses a best-efforts approach: companies that miss a target are not automatically removed if they show they used available levers, disclosed barriers, and set stronger next-cycle targets. However, higher target-year emissions mean steeper future reductions.

Category A companies must obtain independent third-party assurance of progress data at the End-of-cycle Assessment, setting a new baseline expectation.

  9. Ongoing Emissions Responsibility: Voluntary Now, Mandatory From 2035

Version 2.0 introduces Ongoing Emissions Responsibility (OER), currently a voluntary framework with three recognition levels:

• Engaged: Cover at least 1% of ongoing emissions through verified mitigation or a climate contribution budget.
• Advanced: Cover Scopes 1 and 2, plus Scope 3 emissions to reach at least 10% of total ongoing emissions; benchmark: USD 20/tCO₂e.
• Leadership: Cover all ongoing emissions; benchmark: USD 80/tCO₂e, with verified mitigation for the covered volume.

OER complements, but does not replace, direct emissions reductions. Credits and contributions cannot be double counted against target delivery. From 2035, OER becomes mandatory for Category A companies, rising from 1% of ongoing emissions to 100% by the net-zero year, no later than 2050.

What Should Companies Do Now?

For companies with SBTi-validated targets:

• Confirm the date of your mandatory five-year review, which is triggered five years after your targets were set, to understand when updates will be required.
• Review the target-setting options and terminology introduced in the new standard, and assess their feasibility across Scopes 1, 2 and relevant Scope 3 categories.

For companies considering setting targets:

• Compare target pathways under SBTi Version 1.3.1 and Near-Term Guidance Version 5.3.1 with the new standard to assess feasibility and decide which framework to use for validation.
• If you plan to set targets under the legacy guidance, make sure to register your commitment with SBTi before January 31, 2027.

All companies should note that SBTi’s new Scope 3 guidance places greater emphasis on supplier engagement and offers more options for addressing Scope 3 reductions. If your organization is part of another company’s supply chain and that company has committed to, or adopted, SBTi-aligned targets, you may be asked to set targets of your own. To prepare, you can assess whether your decarbonization plans align with SBTi target requirements, using SBTi’s interactive online tool (SBTi, 2026) as a reference.

How UL Solutions Can Help

UL Solutions supports organizations across the full net-zero journey, from building the data foundations for credible target setting to maintaining the systems, supplier engagement, and disclosure processes needed for long-term compliance.

• Data infrastructure: Establishing the systems and processes needed to support accurate emissions accounting and target validation.
• Supplier engagement: Helping companies work with value-chain partners to improve Scope 3 data quality and drive decarbonization.
• Disclosure readiness: Supporting the reporting processes and evidence base required for ongoing compliance with Version 2.0.

Our services are designed to help organizations address the practical challenges introduced by Version 2.0 and turn climate commitments into credible delivery plans.