Decoding the SBTi Corporate Net-Zero Standard V2: What Changed and How to Prepare

In June 2026 the Science Based Targets initiative (SBTi) published Version 2.0 of its Corporate Net-Zero Standard, the first full rewrite since the standard launched in 2021. The headline targets for 2030 and net zero stay the same. What changes is who must do what, how Scope 3 is measured and targeted, and how early companies must start dealing with residual emissions.

For companies whose footprint sits mostly in their supply chain, as it does for most consumer brands, V2 is a real shift. This guide sets out what changed and gives a practical plan for the transition window.

When V2 applies: the transition timeline

SBTi opens V2 submissions in Q1 2027. Until 31 January 2028, companies can submit targets under either Version 1.3.1 or Version 2.0. After that date, V2 is mandatory for every new target submission.

Companies with targets already validated under V1 do not have to resubmit straight away. They move to V2 when they reach their target year or at their mandatory five-year review, whichever comes first.

The practical consequence: a company planning a submission in 2027 can choose which version to use. That choice should be made deliberately (see step 2 below).

Category A and Category B: a new way to size obligations

V1 distinguished between large companies and SMEs. V2 replaces that split with two categories, based on company size and the income level of the country where the ultimate parent company is registered.

• Category A companies (broadly, large companies headquartered in higher-income economies) carry the full set of requirements.
• Category B companies follow a lighter set of minimum criteria, published by SBTi as a separate document.

Many of the most significant V2 changes apply to Category A only. Confirming your category is therefore the first question to settle.

Scope 1 and 2: separate targets, stricter electricity rules

Under V1, many companies set one combined Scope 1+2 target. V2 requires two or more near-term targets, with Scope 1 and Scope 2 targeted separately.

• Scope 1 targets can take the form of absolute contraction, sector-specific intensity, or asset transition targets.
• Scope 2 targets can be absolute contraction or low-carbon electricity alignment, with a threshold of 0.048 kgCO₂e/kWh.
• Large electricity users must report hourly matching performance for their renewable electricity. Buying annual certificates alone will no longer tell the full story.
• Fast-growing electricity consumers: Category A companies whose electricity use grows by more than 20% a year must set an absolute Scope 2 reduction target.

Scope 3: broader coverage, more flexible target types

This is where most brands and manufacturers will feel the difference.

Coverage changes shape. V1 required near-term targets to cover at least 67% of Scope 3 emissions, which let companies pick the easiest categories. Under V2, Category A companies must include every Scope 3 category that represents more than 5% of total Scope 3 emissions.

Target formats widen. Companies can set:

• absolute emissions reduction targets
• intensity reduction targets
• supplier or customer alignment targets
• volume alignment targets
• product alignment targets

Category B companies can opt out of Scope 3 targets entirely. For Category A companies, near-term Scope 3 targets remain mandatory.

For a consumer brand, purchased goods (Category 1) typically accounts for well over half of the footprint. In practice, the 5% rule makes it impossible to set a credible target without a structured supplier programme: engagement on its own will not be enough.

Removals start well before net zero

V1 only required companies to neutralise residual emissions at their net-zero target year. V2 brings that forward. Category A companies must neutralise 1% of their Scope 1–3 footprint by 2035, rising to 100% by their net-zero target year.

Only durable carbon removals qualify. Avoidance and reduction credits do not.

Early removals are a budget item. Removal prices are high and the supply of high-quality credits is thin, so finance teams should model this cost now, not in 2034.

Carbon credits and “ongoing emissions responsibility”

V2 introduces the concept of ongoing emissions responsibility. It recognises companies that finance climate action beyond their value chain, through high-integrity carbon credits and other contributions, via a voluntary recognition programme.

SBTi is explicit: these contributions are a complement, not a substitute. They do not count towards a company’s reduction targets.

Data, assurance and the five-year cycle

• Base year: targets should use the most recent year of emissions data, unless it is not representative.
• Assurance: Category A companies need limited third-party assurance over their base year and other core emissions data.
• Transition plan: Category A companies must disclose an implementation roadmap. It must set out the actions and timeline behind each target, not just the target itself.
• Cycle: targets run on a five-year cycle, with annual progress reporting and an end-of-cycle assessment before new targets are set.

V1.3.1 and V2 at a glance

Topic	V1.3.1	V2.0
Company tiers	Large companies vs SMEs	Category A vs Category B
Scope 1 & 2	Combined target allowed	Separate targets per scope
Scope 2 electricity	Annual renewable claims	Hourly-matching disclosure for large users; 0.048 kgCO₂e/kWh alignment threshold
Scope 3 coverage	≥67% of Scope 3 (near-term)	Every category >5% of Scope 3 (Category A)
Scope 3 target types	Absolute, intensity, supplier engagement	Absolute, intensity, supplier/customer, volume and product alignment
Removals	At net-zero year only	1% by 2035, 100% by net-zero year (Category A)
Base year	2015 or later	Most recent representative year
Data assurance	Not required	Limited assurance (Category A)

How to prepare: a six-step plan

1. Confirm your category. Check where your ultimate parent is registered and where you sit on size. Everything else depends on this answer.
2. Choose your submission version. If you are submitting in 2027, compare what V1.3.1 and V2 would each require of you. A V1 submission buys time, but you will move to V2 at your five-year review anyway.
3. Rebuild your Scope 3 inventory by category. Identify every category above the 5% threshold, and upgrade spend-based estimates to supplier-specific data wherever it is material.
4. Design supplier programmes, not surveys. For purchased goods, decide which suppliers you will engage, what you will ask of them (targets, renewable electricity, heat electrification), and how you will verify the results.
5. Get your data assurance-ready. Document methods, emission factors and boundaries now. Limited assurance on a base year is far cheaper when it is planned.
6. Put removals in the budget. Model the cost of neutralising 1% of your footprint by 2035, and start assessing durable removal suppliers early.

The bottom line

V2 makes SBTi targets harder to meet on paper and easier to believe. For supply-chain-heavy companies, the main work is not the submission itself. It is building the supplier data and engagement programmes that the new Scope 3 rules assume already exist.

The full text of the standard and SBTi’s transition guidance are available on the SBTi website. If you are planning a submission in 2027 or reviewing existing targets, talk to our team about where V2 leaves you.