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The Science Based Targets initiative (SBTi) has recently unveiled significant updates to its Corporate Net-Zero Standard, marking a pivotal evolution in how companies globally will approach their sustainability strategies. 

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At Green Project, we’ve closely analyzed these changes to help you understand their implications and how they can empower your sustainability journey. Read on for a breakdown of some of the updates and what they mean for you. 

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Read all of the updates here: SBTi Corporate Net-Zero Standard, Version 2.0 - Initial Consultation Draft with Narrative; March 2025

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Enhanced accountability with rigorous tracking and reporting

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Change: The SBTi now mandates not just the setting of emissions reduction targets but also the continuous tracking and reporting of progress.

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Impact: This change ensures that sustainability commitments translate into measurable actions. For businesses, this means adopting robust monitoring tools and practices to assess and report emissions reductions regularly. We recommend integrating advanced tracking systems that offer insights and foster transparency, ensuring that every step towards reducing your carbon footprint is documented and actionable.

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New categorization for companies

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Change: The SBTi has introduced specific categories that differentiate requirements based on company size and income:

• Large/High-Income Companies: Must meet comprehensive targets across all scopes (1, 2, and 3), with a requirement to nearly eliminate Scope 1 and 2 emissions by the net-zero target year.

• Small/Lower-Income Companies: Receive more flexibility with optional Scope 3 targets.

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For companies to be considered small/lower-income, they must meet the following criteria:

• Fewer than 500 employees
• Less than €50m in annual turnover
• Less than €43m in total assets
• Not operating in high-impact sectors like financial services or oil and gas
• Must not exceed 10,000 tCO2e/year in Scope 1 emissions and location-based Scope 2 emissions.

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Impact: Large, high-income companies must meet stringent requirements across all emission scopes and ensure near elimination of Scope 1 and 2 emissions by their net-zero target year, with mandatory third-party verification to ensure transparency. 

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Small and lower-income companies benefit from more flexible standards, making Scope 3 targets optional to allow them to focus on achievable changes within their direct operations. 

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Medium-sized enterprises in higher-income regions face stricter criteria similar to larger companies, while those in lower-income areas enjoy more leniency, reflecting their varying capacities to enact change. 

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Revised Scope 2 target requirements

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Change: Companies are now required to set two separate Scope 2 targets: one reflecting local grid emissions and another for renewable energy purchases.

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Impact: This ensures that companies invest in high-quality, traceable Renewable Energy Certificates (RECs) that genuinely contribute to carbon reduction. Businesses should prioritize direct procurement of renewables where possible. Green Project can assist in navigating these new requirements, helping to identify and secure RECs that meet the highest standards of sustainability and traceability.

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Flexible approaches to Scope 3 emissions

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Change: There is now greater flexibility in how companies can meet Scope 3 emissions targets, with options to use metrics like the percentage of suppliers aligned with climate goals or revenue from net-zero-aligned products.

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Impact: This flexibility allows companies to tailor their Scope 3 strategies to focus on areas where they can have the most significant impact. By aligning supplier practices with sustainability goals or developing products that contribute to a net-zero future, companies can turn the challenges of Scope 3 emissions into opportunities for innovation and market leadership. This approach encourages a more nuanced and impactful engagement with the entire value chain.

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Premium quality requirements for RECs

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Change: The updated standards emphasize the importance of premium RECs, setting strict conditions for the use of lower-quality, indirect mitigation options like book-and-claim.

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Impact: This emphasis on high-integrity RECs drives companies to seek out and secure energy sources that are both renewable and verifiably contributing to emissions reductions. Direct sourcing strategies are now more crucial than ever, as companies need to ensure that their renewable energy purchases genuinely reduce their carbon footprint in a verifiable and impactful manner.

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Moving forward

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The SBTi’s updates to its Corporate Net-Zero Standard signify a significant advancement in corporate climate action, aligning with scientific imperatives and operational realities. These updates challenge companies to enhance their sustainability strategies and ensure that their environmental commitments result in tangible outcomes.

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Ready to enhance your sustainability strategy under the new SBTi standards? These changes go into effect in 2027, so it's crucial to engage with knowledgeable partners and resources that can provide guidance and support as you navigate these changes and strive to not just meet, but exceed, your environmental commitments.

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Get in touch with the Green Project team to help you through the SBTi journey. If you’re interested, you can also submit your feedback on these changes to SBTi here. 

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