SBTi Target Setting Step by Step: How to Build a Target Under V2.0

This guide walks through, in order, how to build a science-based target under SBTi's Corporate Net-Zero Standard V2.0. V2.0 validations open on 1 February 2027; until then, submissions are made under V1.3.1. If you have not yet decided which version to use, start with what changed in V2. The SBTi guide is the starting point for the overall framework.

Each step below follows the "How to set targets" flowchart SBTi published in June 2026 and the preliminary submission resources SBTi Services published in October 2026. Some of these resources have "preliminary" status; final versions will be released before V2.0 validations open.

Step 1: Registration and company category

Under V2.0, the process starts with registration with SBTi Services. Registration determines whether the company is eligible to set targets and whether it is Category A or Category B. The category is reconfirmed at validation and stays fixed for the 5-year target cycle.

Keep four rules in mind when calculating:

• Geography is determined by the World Bank income group of the country where the ultimate parent company is incorporated. In the World Bank FY2027 classification, Türkiye is in the upper-middle-income group; for a parent company incorporated in Türkiye, only the first row applies.
• Consolidated figures: Even if the target is set at subsidiary level, thresholds are calculated for the group as a whole.
• Two-year average: The average of the last two financial statements is used. If the reporting currency is not the euro, figures are converted into euros.
• The emissions threshold is assessed against the physical inventory.

What does the category change? Category A companies set a scope 3 target, obtain independent assurance of base year data, publish their transition plan and report emissions-intensive activities. For Category B, these are optional.

At this stage you also check whether a sector standard applies. The SBTi Services preliminary submission form, for example, makes a FLAG target mandatory for a company in a non-FLAG sector if its forest, land and agriculture (FLAG) emissions reach 20 percent of total scope 1, 2 and 3 emissions. For the FLAG side, see our FLAG emissions service.

Step 2: Organizational and operational boundary

The boundary is drawn using one of the three GHG Protocol approaches (equity share, financial control, operational control), or according to regulation where regulation requires it. The V2.0 default is parent company level, and all subsidiaries must fall within the boundary. A subsidiary operating as a separate business can set its own target, but it must document that this was not done to leave out significant emission sources or to pick an easier business line. Subsidiaries state the full legal name of the parent company.

For the differences between boundary approaches, see our guide on organizational and operational boundaries.

Step 3: Target base year and inventory

This is where one of V2.0's core innovations sits. Under V1.3.1, any year from 2015 onwards could be the base year. Under V2.0, the target base year of each cycle is the most recent year with comprehensive data. SBTi stresses that this is not a reset but a continuation of the journey: continued progress is expected in subsequent cycles too. The target base year is not the same as the inventory base year; for the inventory base year concept, see base year selection and recalculation.

Key requirements for the target base year inventory:

• Conformity with the latest versions of the GHG Protocol standards.
• All seven Kyoto Protocol gas groups: CO₂, CH₄, N₂O, SF₆, NF₃, HFCs and PFCs.
• For Category A, a category-level breakdown of scope 3; the minimum boundaries in the GHG Protocol Scope 3 Standard.
• All transport-related scope 3 emissions calculated on a well-to-wheel basis.
• No inventory exclusions. The 5 percent exclusion allowed under V1.3.1 has been removed in V2.0.
• FLAG emissions, bioenergy emissions, and biogenic and technological removals reported separately in line with the GHG Protocol Land Sector and Removals Standard (LSRS).
• Total electricity consumption and how much of it is low-carbon electricity (LCE).
• Significant data gaps, estimates and proxy data.

The inventory is a physical inventory. Actions and market instruments that are not reflected in the physical inventory are reported separately. For the core concepts by scope, see our guide scope 1, 2 and 3.

Emissions-intensive activities (Category A)

Category A companies screen their value chains for the emissions-intensive activities (EIA) listed in the standard's annex table and calculate the associated scope 3 emissions. An EIA exceeding 5 percent of scope 3 is significant and is reported separately, regardless of which category it is reported in. A company cannot say "we don't have any" without doing the analysis.

Assurance (Category A)

Category A companies have the target base year inventory (scope 1, 2 and 3), the LCE calculation, significant EIA emissions and the other metrics used in the target assured by an accredited independent third party at least at the limited assurance level. In practice, this means planning the assurance engagement before designing the target. Our article the first 10 things checked in emissions verification explains what the assurance provider looks at first.

Step 4: Scope 1 target

The near-term scope 1 target covers 100 percent of scope 1 emissions. The options:

If more than one scope 1 target is set, they are aggregated into a single scope 1 target for communication. For absolute reduction, the tool asks only for the covered base year emissions; for the intensity method it also asks for production volume, region and production projections; and for asset transition it asks for emissions and transition years per asset.

Step 5: Scope 2 target

The scope 2 target is also set separately and covers 100 percent of scope 2. Target ambition is calculated against the location-based inventory. There are two options:

• Low-carbon electricity alignment target: A linear increase in the share of low-carbon electricity.
• Absolute scope 2 reduction: Used for heat, steam and cooling emissions.

Category A companies submit an electricity consumption projection for the target period. If average annual consumption growth exceeds 20 percent, an absolute emissions target is mandatory. The tool asks for the region (advanced or emerging economy), the covered base year emissions and, for the LCE option, the low-carbon share in the base year.

Market instruments can be used to implement the target, but they must meet criteria such as the deliverability region, plant age (as a general rule, no more than 15 years) and matching within a period of no more than 12 months. For the reporting side, see our article on market-based and location-based scope 2 reporting.

Step 6: Scope 3 target

Designing the scope 3 target is the most labour-intensive part of V2.0. In order:

1. Identify significant categories. Every category that makes up 5 percent or more of the category 1-14 total falls within the target boundary. Optional emissions outside the minimum boundary are not used in this calculation.

2. Assess exclusions. Even within a significant category, the following emissions can be excluded with justification: second-hand goods in categories 1 and 2; category 3 where it is addressed by energy reductions in scope 1 or 2 targets; category 7 in full; and defined situations in categories 8, 9, 10 and 14 where the company has no contractual or practical influence. For each, the condition, amount and percentage, and the reduction actions are reported.

3. Choose the approach. There are three options:

For supplier alignment, the basis is spend or emissions; for customer alignment, revenue or emissions. If a financial metric is used, separate targets are set for spend and revenue. In the draft pathway definition put out for public consultation in June 2026, a supplier with a science-based near-term target covering scope 1, 2 and significant scope 3 emissions (scope 1 and 2 for Category B) counts as "in transition".

In category 11 (use of sold products), if no downstream option can be applied, an equivalent amount of emissions can be addressed in another category or an exception can be requested. The exception is conditional on a long-term category 11 target, an action plan added to the transition plan at the time of validation, and annual reporting.

A long-term scope 3 target is optional for all companies; if set, it covers 100 percent of scope 3. If you are new to the scope 3 inventory, our scope 3 categories guide and our article where to start with scope 3 provide a good introduction.

Step 7: Target timeframe and target language

Under V2.0, the near-term target covers a 5-year period from the start of the most recent reporting period at the time of submission. At the first validation under V2.0, a shorter period can be chosen to fit the business or reporting cycle. Subsequent cycles start from the year after the previous target year. Long-term targets aim for 2050 at the latest.

Under V2.0, the target language is generated by the target-setting tool. The elements the standard requires in the publicly disclosed target information are: target type, method and metric, scope and scope 3 categories, coverage, justified exclusions, target base year and value, target year, target value, and projected emissions for the target year. A purely illustrative structure to show the logic:

Example structure (example value; years and percentage are illustrative, not a real target): "[Company] commits to reduce scope 1 greenhouse gas emissions [X] percent by 2030 from a 2025 target base year."

A few rules for communication:

• Targets that use the same metric can be aggregated within or across scopes for announcement; progress is still tracked separately for each target.
• If multiple scope 3 targets are aggregated into a single "headline ambition" figure, different units are converted into tCO₂e and emissions covered by more than one target are counted only once.
• Targets can also be presented against an older inventory base year, but the equivalent ambition must be confirmed at validation.
• FLAG targets are not combined with non-FLAG targets.

Step 8: Target-setting tool and submission form

The V2.0 submission package has three parts:

1. Target-setting tool: Quantitative, methodological and target-specific information is entered here. The tool calculates coverage, minimum ambition, the target output and the target language; if you want a target above the minimum ambition, it may let you specify this. Results are downloaded as PDF and/or Excel and uploaded to the portal.
2. Submission form: Information not captured in the tool. The preliminary form has separate tabs for company information and governance, base year assessment, GHG inventory and EIA, target setting, sector-specific requirements, and other topics (OER participation, hourly matching).
3. Supporting documents: Uploaded separately to the Validation Portal and referenced in the form by document name, page number and description.

An important caveat: the beta tool SBTi published on 11 June 2026 does not reflect the functions that V2.0 validation will require. The first operational version will be released before V2.0 validations open. The Methods, Metrics and Pathways document, which details the methods and pathways, is also a draft put out for public consultation in June 2026. SBTi expects some of these methods to become available in the last quarter of 2026. Be prepared, therefore, to rerun your calculations with the final tool.

Step 9: Evidence file, governance and transition plan

SBTi's Minimum Evidence Required defines what must be demonstrated for each criterion. According to the SBTi Services V2.0 validation procedures, the main documents required at the first validation are:

A transition plan is mandatory for all companies and must contain: all validated targets, the emission sources covered, the actions that will deliver the near-term target and indicative actions for the following 5 years, critical assumptions and external dependencies, where relevant a commitment to phase out revenues from unabated fossil fuels, and a decarbonization plan for significant EIAs. The plan is approved by the highest governing body and reviewed at least every 5 years. Category A companies publish the plan within 15 months of validation. If the plan is still in draft at the time of validation, the submission form confirms that it will be approved before it is published.

In the submission form, dependencies that could affect the targets (technology maturity, supply chain capacity, finance, policy) are also identified target by target. SBTi states explicitly that this disclosure does not change the responsibility to pursue the target on a "best efforts" basis. To prioritise actions, our guide on abatement measures and MACC helps you build the backbone of the transition plan.

After submission

Once the package is complete, the validation process begins. The timeline, what reviewers look at and what needs to happen afterwards are explained in detail in the SBTi validation process.

For support with determining your category, getting the inventory ready for assurance, comparing methods and building the evidence file, see our SBTi target setting service.