SBTi Corporate Net-Zero Standard V2.0 Draft Key Updates

New Mission

• The SBTi Corporate Net-Zero Standard (CNZS) V2.0 changes the language of corporate climate goals, emphasizing the objective. Instead of a “commitment to net-zero by 2050,” companies must set a “transformation goal aligned with net-zero by 2050.”

• Companies will be required to use CNZS V2.0 to set new targets starting January 1, 2028.

• The creation of a framework for transition costs and financing demonstrates that emissions reduction is integrated into financial planning.

Supply Chain Management and Flexibility

• The standard focuses on supply chains, emphasizing companies' potential to shape markets and drive change. Companies must set near-term targets for all significant Scope 3 categories that are equal to or greater than 5% of total Scope 3 emissions, rather than covering all Scope 3 emissions.

• For Scope 3 emissions that are difficult to track, companies are permitted to demonstrate their performance at the Activity Pools level. Examples of activity pools include Land-Based Procurement Pool, Transportation Operation Categories, and Energy Pool.

• One key approach to achieving Scope 3 targets is Counterparty Alignment targets. These targets require that a large portion (95%) of procurement volume comes from suppliers with aligned status (those that have set net-zero targets and demonstrate measurable progress).

• Where companies are unable to physically source sufficient volumes of low-carbon goods or services, they are permitted to use unbundled EACs on a limited basis to support sector-level scaling.

• Use of Environmental Attribute Certificates (EAC): When companies cannot physically source sufficient volumes of compliant goods or services, they can procure decoupled energy and commodity EACs to support the scaling of low-carbon alternatives at the activity pool or sector level.