SBTi Net-Zero Standard V2: What Changed from V1.3?

SBTi's Corporate Net-Zero Standard V2.0 was published on 11 June 2026. SBTi describes it not as a minor update but as a full revision: V2.0 merges the Near-Term Criteria V5.3 and the Net-Zero Standard V1.3.1 into a single standard. According to SBTi's main changes document, 42 percent of the sections in V2.0 are entirely new and 58 percent are modified or expanded versions of existing approaches. Because the criteria have been renumbered, a clause-by-clause mapping is not possible.

This page goes through the differences one by one, so that a sustainability manager can answer the question "what changes for us?". For the overall framework of the standard, see the SBTi guide; for how to build a target under the new rules, see step-by-step target setting.

How did it come about?

The standard was revised between April 2024 and May 2026. The first public consultation ran from March to June 2025, and the second from November to December 2025. The text was approved by the SBTi Technical Council on 8 May 2026 and adopted by the Board of Trustees on 21 May 2026.

SBTi's main changes document lists four aims of the revision: alignment with current science and good practice, a stronger approach to scope 3, ongoing assessment of target achievement, and interoperability with other standards.

V1.3.1 vs V2.0 comparison table

The table is based on the comparisons in the SBTi Services transition guide and on SBTi's main changes document. The standard itself is always what is binding.

Company categories: A and B instead of the SME route

In V1, SMEs set targets through a separate route. V2.0 defines two categories instead. Companies with net turnover of EUR 450 million or more, or 1,000 or more full-time equivalent employees, are Category A in every country. In high-income countries, companies with scope 1+2 emissions of 10,000 tCO₂e or more, or that exceed two of the thresholds of EUR 25 million balance sheet total, EUR 50 million turnover and 250 employees, are also Category A. All others are Category B.

Geography is determined by the country where the ultimate parent company is incorporated, and thresholds are calculated on consolidated group-level figures, averaged over the last two years. For Category B companies, a scope 3 target, disclosure of the transition plan and base year assurance are optional; SBTi encourages these companies to go beyond the minimum requirement.

Scope 1: a separate target, three methods

Under V2.0, the scope 1 target covers 100 percent of scope 1 emissions and uses one or more of three options:

• Absolute emissions reduction: A linear pathway from the target base year to the residual level by 2050 at the latest.
• Emissions intensity reduction: Sectoral intensity pathways for sectors such as steel, cement and chemicals.
• Asset transition target: For companies whose capital stock does not change along a linear pathway. The company prepares an Asset Decarbonization Plan, based on science-based milestones or a carbon budget.

A company choosing an intensity or asset transition target must publish its transition plan at the time of validation. When Category A companies choose either of these two methods, they also set a long-term scope 1 target.

A notable point: the SBTi transition guide points out that although a combined target could be announced under V1, ambition was already assessed separately for scope 1+2 and for scope 3. The requirement for separate targets is therefore more a formalisation of existing assessment practice than a fundamental change in the ambition bar.

Scope 2: the physical inventory and "near, new, now"

The biggest change in scope 2 is the accounting basis. Under V1.3.1, scope 2 targets could be set against either the location-based or the market-based inventory. Under V2.0, the ambition of all scope 2 emissions targets is determined against the physical, that is location-based, inventory. We cover the difference between market-based and location-based reporting separately in our scope 2 reporting article.

There are two target options:

• Low-carbon electricity (LCE) alignment target: Linearly increasing the share of low-carbon electricity used, contracted or matched. Besides renewables, low-carbon electricity can include nuclear and generation equipped with carbon capture and storage.
• Absolute scope 2 reduction: Used for heat, steam and cooling emissions, where these exist.

For Category A companies, if average annual growth in electricity consumption over the target cycle exceeds 20 percent, an absolute emissions target is mandatory; an LCE target can be set in addition. SBTi explains this as a safeguard against fast-growing assets such as data centres increasing their total emissions while raising their LCE share. The scope 2 intensity target option has been removed in V2.0.

The use of market instruments has moved into the implementation hierarchy and is tied to criteria that SBTi summarises as "near, new, now":

• Near: Instruments must correspond to generation within the deliverability region where consumption takes place.
• New: As a general rule, instruments must come from plants no more than 15 years old. Existing contracts are grandfathered for their duration.
• Now: Hourly matching is not required for target progress; however, matching must take place within a period of no more than 12 months. Category A companies that are significant electricity consumers publicly disclose their hourly matching performance, and those exceeding certain thresholds can join a voluntary recognition program.

For a practical approach to using certificates, see our article on how to use renewable energy certificates.

Scope 3: a 5 percent significance threshold instead of 67 percent

Under V1.3.1, a target was required if scope 3 exceeded 40 percent of total emissions, and the near-term target had to cover at least 67 percent of scope 3. V2.0 drops this fixed percentage. Every category that makes up 5 percent or more of the category 1-14 total counts as a significant category and falls within the target boundary.

Even within a significant category, the following emissions can optionally be excluded:

• Cradle-to-gate emissions of second-hand goods in categories 1 and 2.
• Category 3, if it is already addressed by energy consumption reductions in scope 1 or 2 targets.
• Category 7 (employee commuting) in full.
• Defined situations in categories 8, 9, 10 and 14 where the company has no practical influence.

For each exclusion, the company reports which condition applies and why, the amount and share, and the actions planned to reduce it. For what each category covers, see our scope 3 categories guide.

The methods have changed too. The supplier and customer engagement target has become alignment targets that measure the share of suppliers or customers that are "in transition" or "net-zero aligned". New methods such as volume alignment, product use alignment and product end-of-life alignment have been added. The physical and economic intensity methods based on a 7 percent annual compound reduction have been removed, on the grounds that they lack science-based reference pathways. In category 11 (use of sold products), if no downstream option can be applied, an exception can be requested subject to strict conditions.

Category A companies also identify emissions-intensive activities (EIA) and report separately those exceeding 5 percent of scope 3.

Implementation hierarchy and market instruments

V1 had no explicit rule on how a target should be implemented. V2.0 introduces an implementation hierarchy and assesses it at the end of the cycle:

1. Activity level: Direct reductions such as energy efficiency, fuel switching and sourcing low-carbon inputs take priority.
2. Activity pool: Where emissions occur in a shared system such as an electricity grid, a sourcing region or a logistics network, actions and certificates within that system can be used.
3. Sector level: Only where structural constraints prevent action at the first two levels, and this is documented.

Actions and market instruments that are not reflected in the physical inventory are reported separately and must meet integrity criteria (additionality, avoidance of double counting, registry transparency). Claims diverge accordingly: the change in the inventory is the basis for an emissions reduction claim, while pool-level and sector-level actions support only a "contribution to system decarbonization" claim. Carbon credits have no place in this hierarchy; they are addressed separately under the OER framework.

Ongoing Emissions Responsibility and neutralization

Under V1.3.1, investing in climate projects outside the value chain (beyond value chain mitigation, BVCM) was a voluntary recommendation. V2.0 turns this into the Ongoing Emissions Responsibility (OER) framework:

• Until 2035: A voluntary recognition program with three levels: Engaged (at least 1 percent of ongoing emissions), Advanced (100 percent of scope 1 and 2 and at least 10 percent of the total) and Leadership (100 percent). Each company states at validation whether it will join the program; if not, it provides a justification.
• From 2035: Category A companies are expected to support eligible carbon removals equal to at least 1 percent of their ongoing emissions; the share rises linearly to 100 percent by the net-zero year. SBTi states that this clause will be revisited at the next major revision.
• In the net-zero year: All residual emissions are neutralized. Residual emissions from long-lived gases must be addressed with long-lived removals.

SBTi has announced that the OER framework will start in 2027 and that companies with either V1 or V2.0 targets can take part.

Progress, assurance and "best efforts"

Perhaps the most fundamental change in V2.0 is the target cycle. Companies progress in 5-year cycles: target validation, possible spot checks and focus checks, an end-of-cycle assessment (no later than 12 months after the end of the target timeframe) and target validation for the new cycle. For Category A companies, the data and calculations supporting the progress assessment are assured by an independent third party at least at the limited assurance level.

Targets are tracked on a "best efforts" basis: the company is expected to use all available levers and report barriers transparently. SBTi plans to introduce minimum progress criteria in the future, but these will not apply until the end of the first cycle under V2.0.

Transition rules and innovations extended to V1

• V2.0 validations open on 1 February 2027; V1.3.1 validations close on 31 January 2028; from 1 February 2028, V2.0 is mandatory.
• Existing validated targets remain valid. Companies with targets for 2030 or later are recommended to set targets for the 2030-2035 cycle under V2.0 from 2028 onwards.
• Some V2.0 innovations have also been opened up to V1 users: companies below the Category A threshold can request SME classification under V1; the updated absolute contraction method was brought into the system in the second quarter of 2026; and the implementation hierarchy and OER can also be used for V1 targets. SBTi also recommends that V1 users adopt third-party assurance for end-of-cycle progress reports now.
• Financial institutions cannot submit under V2.0 in February 2027. For companies required to set targets under an SBTi Sector Standard, the V2.0 validation type will not open until the relevant sector standards have been aligned with V2.0; until then, SBTi Services encourages these companies to submit under V1.3.1 and the relevant sector standard.

We explain which version makes sense in which scenario, with a decision tree, in our article when to move from V1.3 to V2.

First steps for the sustainability manager

1. Confirm whether your group is Category A or B using consolidated figures.
2. Make sure you also calculate scope 2 fully on a location basis, and that you can report total electricity consumption and the share of low-carbon electricity.
3. Identify the categories in your scope 3 inventory that exceed 5 percent, and possible exclusions.
4. If you are Category A, plan the timeline for the base year inventory with your assurance provider now.
5. Check that your transition plan contains the elements the standard requires (targets, actions, assumptions and dependencies).

For V2.0 readiness or transition planning for your existing targets, take a look at our SBTi target setting service.