Six Takeaways for the New SBTI Net-Zero Standard

The Science Based Targets initiative (SBTi) Net-Zero Standard has had a makeover that will impact every company with, or planning to secure, SBTi-validated targets. Here we break down the key takeaways you need to know.

In June 2026, SBTi published the Corporate Net-Zero Standard Version 2.0 (V2.0), replacing its flagship 2021 Corporate Net-Zero Standard. The move is part of SBTi’s new five-year strategy, expanding its focus from target-setting and validation to helping companies implement their climate goals and improve transparency.

The headline changes include more flexibility to reflect different business contexts, and tighter expectations on data, assurance, transition planning, reporting, and carbon removals.

Key Updates and Ways to Prepare

1. Confirm when V2.0 applies to you

If you don’t yet have SBTi-validated targets:

• You can start validating targets against V2.0 from Q1 2027.
• You can still submit under the current version (V1.3.1) until 31 January 2028. After that, all new submissions will be under V2.0.

If you already have SBTi-validated targets:

• Start preparing early to revalidate targets under V2.0 based on the earlier of:
  • The target year: revalidate at the end of the year after the target year.
  • The mandatory five-year review (M5YR) trigger date: complete the M5YR within six months of the trigger date (five years after the initial validation or the most recent scopes 1–3 target update). Submit any new targets within 12 months of the trigger date.

Takeaway: V2.0 is a big step up from the current standard. Preparing early will save you pain later down the line.

2. Expect more scrutiny if you’re a larger company

V2.0 introduces a new company categorisation:

• Category A: Companies with annual turnover above €50 million in high-income countries and above €450 million in lower-income countries. Category A companies will face more stringent requirements.
• Category B: Companies with turnover below €50 million in all markets and below €450 million in lower-income countries. Companies that fall into Category B will still need to align with more comprehensive data and reporting obligations, but less is required than those in Category A.

If you fall into Category A, start preparing by:

• Creating a climate transition plan, aligned with or integrated into corporate strategies and formally approved by the company’s highest governing body (often the Board of Directors).
• Getting ready for limited external assurance for emissions and low-carbon electricity (LCE) calculations.

Takeaway: Check which category your company will be in. If it’s Category A and you don’t already have a climate transition plan and/or your reporting is not yet externally assured, now is the time to get started.

3. Tighten up your emissions data

Strong targets must be founded on a comprehensive greenhouse gas (GHG) inventory and a suitable base year. Under V2.0, the base year will be the most recent year with comprehensive emissions that accurately reflect the company’s structure and activities.

You’ll also need to provide more detailed data disclosure, including:

• Covering 100% of scope 1 and 2 emissions and all individual categories that account for more than 5% of category 1 – 14 scope 3 emissions.
• Preparing additional disclosures on electricity use and LCE.
• Identifying and quantifying emissions-intensive activities that individually represent more than 5% of scope 3 emissions.
• Reporting market-based scope 2 emissions as well as forest, land and agriculture (FLAG) emissions, bioenergy emissions, and removals separately from the main GHG inventory.

Takeaway: Review your data and reporting to see what’s missing from your GHG inventory and what additional information you’ll need to disclose.

4. Review your target-setting approach

V2.0 has changed how companies can approach scopes 1 – 3 target-setting. One of the main changes is that companies must set separate emissions targets for scope 1 and scope 2, ensuring they cover 100% of emissions in both categories.

• Scope 1: The new standard retains the option to set absolute emissions reduction or sectoral approach targets. At the same time, it introduces an asset transition option enabling companies to gradually replace existing assets with low-carbon assets.
• Scope 2: Companies can still set absolute emissions reduction targets but intensity targets are no longer allowed. V2.0 introduces an LCE target option, whereby companies increase their share of LCE through direct investment or contracts such as power purchase agreements or renewable energy certificates.
• Scope 3: Similar to the current standard, companies can set absolute emissions reduction targets and supplier and/or customer engagement targets. Companies that have emissions concentrated in certain categories or areas of activity can also take a category- or activity-specific approach. Read more about scope 3 emissions reporting.

The new standard also introduces an implementation hierarchy, meaning companies should prioritise direct, activity-level emissions cuts before actions within shared systems (such as electricity or gas grids and logistics networks) or at the sector level.

Takeaway: Check if your current target-setting approach for scopes 1 – 3 will be permitted under V2.0 and whether any new options are more suitable. Prepare to change the approach as part of the next target refresh.

5. Prepare to increase transparency

SBTi aims to improve accountability by strengthening transparency. Companies must detail their decarbonisation actions and the barriers faced along the way. They will also need to justify any scope 3 emissions exclusions, for example, clarifying if the category accounts for <5% of scope 3 emissions or if the company lacks sufficient practical influence to drive reductions in the area.

Takeaway: Improved transparency can be daunting for more risk-averse companies. Start engaging with senior stakeholders to secure their approval on the additional disclosures.

6. Plan your carbon removals strategy

V2.0 maintains the requirement for companies to neutralise all residual emissions by the net-zero target year through eligible carbon removals. Under the new standard, Category A companies must also start securing removals by 2035 at the latest that cover at least 1% of ongoing emissions, rising linearly to 100% of residual emissions by the net-zero target year (and no later than 2050).

Carbon removals have several common challenges like concerns around quality, supply and greenwashing. For more information see our blogs on how to avoid common issues with carbon removal credits and tips to avoid greenwashing.

Takeaway: Large companies will need to secure carbon removals no later than 2035. Develop a carbon removals roadmap that covers volumes, quality criteria, timing, portfolio approach, and budget.

Feeling Stressed? Here’s How To Get Started.

Once you have confirmed when V2.0 applies to you and which category your company falls into, review your GHG inventory for data gaps and check your data calculation methodology against the new standard. Assess your GHG emissions targets to confirm which target-setting approach is most suitable for your business. Category A companies can assess their transition plans and carbon removals strategy to see if they meet V2.0 requirements.

If you’re feeling unsure, strained for capacity or would simply appreciate a second pair of eyes on your net-zero strategy and reporting, Context is ready to support your needs. For more information or assistance, please get in touch with Helen at helen.fisher@contexteurope.com.