Foreword

The Science Based Targets initiative (SBTi) has evolved from setting the bar for science-based principles to becoming a transition partner for more than 11,000 companies with validated targets. This updated standard responds to a decade of learning, acknowledging that delivery is the most significant challenge. Version 2.0 shifts from being a predefined algorithm to an action framework designed to aid decision-making in capital allocation, technology investment, and procurement. It introduces a best-efforts framework, expecting organisations to deploy every lever within their control while remaining transparent about systemic barriers.

Executive summary

The mission of the SBTi is to accelerate corporate climate action consistent with reaching net-zero by 2050 to limit global warming to 1.5°C. Version 2.0 includes innovations such as differentiated approaches for small and medium-sized enterprises (SMEs) and companies in lower-income countries. It strengthens the link between targets and transition planning, requiring companies to set two or more near-term targets. Targets are pursued on a best-efforts basis, supported by transparent progress reporting and periodic assurance.

Standard & system overview

The standard categorises companies based on size and geography to determine the applicability of criteria. Category A includes large companies globally and medium-sized companies from high-income countries, defined by thresholds such as a net turnover of ≥ €450 million or ≥ 1,000 full-time equivalents. Category B includes smaller organisations. The framework is anchored by the Corporate Net-Zero Standard, which establishes foundational requirements for scope 1, 2, and 3 emissions as defined by the GHG Protocol Corporate Standard.

Net-zero governance

Organisations must secure senior leadership approval at the highest level of governance to set and submit SBTi targets. All companies are required to develop and maintain a transition plan outlining actions, timeframes, assumptions, and dependencies for target implementation. Category A companies must disclose their transition plan within 15 months of completing target validation. Plans must include details on unabated fossil fuel phase-outs if relevant and specific plans for decarbonising emissions-intensive activities (EIAs) identified in the value chain.

Target base year assessment

A comprehensive greenhouse gas (GHG) inventory aligned with GHG Protocol Standards is required. Companies must select the most recent year with comprehensive data as the target base year. For Category A, a minimum of limited assurance is required for base year data. The standard mandates a 5% significance threshold for recalculating base year inventories in response to structural changes, such as mergers or divestments, or significant changes in the consolidation approach.

Target setting

Companies must set separate targets for scope 1 and 2, with Category A also required to set scope 3 targets. Near-term targets cover a five-year period. Scope 1 options include absolute emissions reduction, sector-specific emissions intensity, or asset transition targets. For scope 2, companies must target 100% coverage using low-carbon electricity (LCE) alignment or absolute reduction. Scope 3 targets must cover at least all categories representing 5% or more of total scope 3 emissions. Long-term targets must be set for 2050 at the latest to reach residual levels.

Target implementation

The standard introduces an implementation hierarchy that prioritises direct activity-level actions at the source. If activity-level actions are not feasible due to structural constraints, organisations may pursue actions within shared systems or at the sector level. Market instruments, such as energy attribute certificates, must meet integrity criteria, including a generator age limit of 15 years. Large electricity users are required to report the percentage of consumption matched with low-carbon attributes on an hourly basis.

Reporting & assessing target progress

Organisations must track and report progress against targets annually, including descriptions of actions taken and barriers encountered. At the end of each five-year target cycle, a formal progress assessment is conducted. For Category A companies, this assessment must be assured by an independent third party. Progress is assessed based on changes in the physical GHG inventory. If a company demonstrates it has applied all available levers but faces legitimate barriers, it may proceed to set new targets for the next cycle.

Ongoing emissions responsibility

This voluntary recognition programme encourages companies to support climate actions beyond their value chain. Recognition levels include Engaged (covering 1% of emissions), Advanced (10% coverage), and Leadership (100% coverage). For the Leadership level, organisations establish a contribution budget equal to $80 per tCO2e of covered emissions. The programme remains optional until 2035, after which Category A companies will be required to support eligible carbon removals to neutralise their ongoing emissions.