The Science Based Targets initiative (SBTi) has released Version 2.0 of its Corporate Net-Zero Standard, marking the biggest update since the framework was introduced in 2021. More than 11,000 companies have already validated science-based targets, making SBTi one of the most influential corporate climate frameworks globally.
While the original standard focused on setting ambitious climate targets, Version 2.0 places much greater emphasis on implementation, accountability and measurable progress.
For companies with existing SBTi targets, as well as those planning to begin their net-zero journey, the new standard introduces important changes that will influence procurement strategies, value chain engagement and climate reporting over the coming years.
Corporate climate action has changed significantly over the last five years.
Many companies already have net-zero commitments. The next challenge is demonstrating credible progress towards those commitments.
SBTi Version 2,0 reflects this shift by:
• Increasing accountability
• Providing more practical target-setting methods
• Strengthening transparency requirements
• Recognizing different business realities across sectors and regions
• Introducing clearer expectations for ongoing climate action
Instead of simply asking companies to commit to net zero, the revised framework focuses on how business will achieve it.
One of the most practical changes in Version 2.0 is that SBTi no longer applies the same requirements to every organisation.
Instead, companies are divided into two categories based on their size and where they operate. Large companies and medium-sized businesses in high-income countries (Category A) face the most comprehensive requirements, including mandatory transition plans and more detailed reporting. Smaller companies and medium-sized organisations in lower-income countries (Category B) benefit from a more proportionate approach, with greater flexibility around several requirements.
This change recognizes that businesses have different sources and levels of climate maturity, while still maintaining a credible pathway towards net zero.
%20(1).png)
One of the biggest structural changes is how emissions targets are set across the three scopes.
Previously, Scope 1 and Scope 2 emissions were commonly addressed through a combined reduction target.
Version 2.0 separates Scope 1 into its own standalone target and introduces several methodologies, allowing companies to select the approach that best matches their operations.
Options include:
• Linear emissions reduction pathways
• Asset replacement and decarbonization planning
• Alignment with low-carbon technology
This is particularly relevant for companies operating industrial facilities, vehicle fleets or other long-lived assets.
Renewable electricity remains central to corporate decarbonization, but the expectations are becoming more demanding.
Version 2.0 introduces stricter quality requirements for Energy Attribute Certificates (EACs). From 2030, Category A companies consuming at least 10 GWh of electricity annually will be required to publicly report their hourly matching performance. However, hourly matching itself remains voluntary.
This means procurement strategies will increasingly focus on:
• High-quality renewable electricity sourcing
• Power Purchase Agreements (PPAs)
• Energy Attribute Certificates with stronger integrity requirements
• Improved temporal matching between generation and consumption
For many organizations, Scope 3 represents more than 90% of total emissions.
Rather than requiring broad coverage across all categories, Version 2.0 enables companies to focus on significant Scope 3 categories, defined as those representing 5% or more of total Scope 3 emissions, while allowing exclusion where companies lack practical influence.
The framework also expands the range of acceptable target-setting approaches, including:
• Supplier engagement
• Emissions intensity improvements
• Sector-specific benchmarks
• Circularity targets
The result is a more flexible framework that better reflects complex global supply chains while maintaining scientific credibility.
Perhaps the most discussed addition to Version 2.0 is the introduction of the Ongoing Emissions Responsibility (OER) framework.
Instead of waiting until net zero is achieved, companies are encouraged to take responsibility for emissions that cannot yet be eliminated.
Businesses can receive public recognition for supporting verified climate mitigation activities while continuing to prioritize direct emissions reductions within their own operations and value chains.
Importantly, carbon credits do not replace emissions reductions under SBTi. They complement a company’s decarbonization strategy by addressing ongoing emissions during the transition to net zero.
Companies can continue submitting targets under the current Corporate Net-Zero Standard until the end of 2027.
Validation against Version 2.0 is expected to begin in early 2027, while the revised framework becomes the primary standard from 2028 onwards. Existing validated targets remain valid until their target year.
%20(1).png)
Even though the transition period extends through 2027, businesses should start reviewing their climate strategies today.
Key priorities include:
• Assessing whether the company falls under Category A or Category B
• Reviewing existing Scope 1, 2 and 3 targets
• Evaluating renewable electricity procurement strategies
• Identifying the most material Scope 3 emission categories
• Preparing for stronger reporting and governance requirements
• Developing a credible transition plan aligned with future SBTi expectations
Early preparation will help reduce future compliance challenges while strengthening the credibility of corporate climate strategies.
The revised SBTi Corporate Net-Zero Standard places greater emphasis on credible implementation than ever before.
Meeting these expectations requires more than target setting. Companies need practical solutions that support measurable emissions reductions across operations and value chains.
OTC Flow helps organizations implement decarbonization strategies through renewable electricity procurement, Energy Attribute Certificates (GOs, RECs and I-RECs), Power Purchase Agreements (PPAs), biomethane certificates and carbon market solutions that support long-term climate goals.
As the requirements under SBTi Version 2.0 continue to evolve, building the right procurement and decarbonization strategy today will help companies stay ahead of future expectations.