What Companies Need to Know About the New SBTi Corporate Net-Zero Standard v2
December 15, 2025
Climate Strategy & Policy
The global net-zero landscape is shifting, and so are expectations for corporate climate action. With the second consultation draft of the SBTi Corporate Net-Zero Standard v2 (CNZS v2), the Science Based Targets initiative introduces some of its most far-reaching updates yet — especially regarding the role of carbon credits.
While the draft is still under review, the direction is already becoming clear: higher integrity, sharper guidance, and a more formalized approach to corporate emissions responsibility. We break down these developments and provide you with clarity on what the new standard may mean for your climate strategy.
Status and Timeline: Where things stand
The version released is a consultation draft, meaning nothing is final yet — but it signals where the SBTi is heading. The consultation period runs until 12 December 2025, and the final standard is expected in Q2 2026, subject to change.
Companies can still set targets using the existing Version 1.3, and these efforts will remain valid. However, from 1 January 2028, all new targets must align with Version 2.
Who the Standard Applies To
The draft introduces two company categories, differentiated by size and geographical income level. Large companies and medium-sized businesses in high-income countries fall under Category A, while Category B covers medium-sized companies in middle- and low-income regions as well as small and micro enterprises. These categories influence timelines and obligations throughout the standard.
The Most Significant Shift: A New Framework for Carbon Credits
One of the biggest updates is the shift from “Beyond Value Chain Mitigation” to a clearer and more structured concept called Ongoing Emissions Responsibility (OER).
Before 2035: A portfolio approach
Companies may take responsibility for a portion of their ongoing emissions (Scopes 1–3) by using a mix of verified carbon reduction and removal credits, as well as climate finance contributions such as mitigation R&D or adaptation financing. The draft defines two recognition tiers — “Recognized” and “Leadership” — which distinguish companies based on the proportion of emissions they cover and the minimum carbon price they apply. Importantly, all contributions must adhere to strict integrity principles such as ex-post delivery, robust quantification, additionality, permanence safeguards, and independent verification.
After 2035: Removals take center stage
For Category A companies, responsibility for ongoing emissions becomes mandatory starting in 2035 and gradually increases through 2050. Over time, the share of long-lived removals must grow, reflecting the scientific need for durable CO₂ storage. By a company’s net-zero target year, all residual emissions must be neutralized through removals. The current draft suggests that by 2050, around 41% of removal activities should rely on long-lived storage.
Wider Updates Across the Standard
Beyond the changes to carbon credits, CNZS v2 introduces several structural updates intended to increase accountability and transparency.
Validation will follow a cyclical model with an entry check, initial validation, and periodic renewal supported by spot checks. Climate ambition must now be anchored at the governance level, requiring board approval. Within 12 months of validation, companies must publish a comprehensive transition plan outlining their targets, assumptions, fossil fuel phase-out strategy, and financing approach.
The draft also revisits the treatment of emissions across Scopes 1, 2, and 3. Scope 1 introduces an option for an Asset Decarbonization Plan, which links a company’s emissions to a specific carbon budget. Scope 2 guidance tightens substantially: all companies must shift to 100% low-carbon electricity by 2040, supported by more rigorous criteria including geographic alignment and hourly matching. For Scope 3, priority emissions must be clearly identified, and companies are expected to engage suppliers and customers more directly.
Annual reporting becomes mandatory, and companies must communicate progress, barriers, and corrective actions transparently.
Key Updates in CNZS v2
Net-zero ambition
The draft further clarifies expectations around net-zero ambition. Companies are expected to align near-term actions with a long-term pathway to reach net-zero by 2050 or earlier and to communicate this ambition publicly. Compared to previous versions, the draft places stronger emphasis on governance and implementation. Net-zero ambition is expected to be anchored at senior leadership or board level, and companies are required to publish a transition plan within a defined timeframe after validation. This plan should outline key assumptions, financing considerations, and the company’s approach to phasing out fossil fuels.
Base year assessment
Requirements for base year selection and emissions inventories remain largely consistent with the existing Standard. Companies are expected to define clear organisational and operational boundaries, select a representative and recent base year, and develop a comprehensive emissions inventory covering Scopes 1, 2 and 3. What changes in CNZS v2 is the stronger focus on data quality and assurance. The draft introduces clearer expectations around third-party assurance of base-year emissions data and timely public disclosure following validation.
Target setting
The draft reinforces core principles of science-based target setting: targets must be measurable, time-bound and aligned with climate science, with separate targets for Scope 1, Scope 2 and Scope 3 emissions. At the same time, CNZS v2 provides more detailed and operational guidance. This includes strengthened criteria for low-carbon electricity procurement, clearer expectations for addressing significant Scope 3 categories through meaningful engagement, and the introduction of asset-level decarbonisation planning as an explicit option for certain sectors and asset-intensive companies.
Performance and renewal
CNZS v2 strengthens expectations around ongoing performance management. Companies are expected to track and report progress regularly and to reassess targets if emissions change significantly. The draft also introduces a more structured approach to validation and renewal, ensuring that targets remain aligned with science over time. In parallel, guidance on climate-related claims is reinforced to reduce the risk of misrepresentation and ensure consistency with SBTi requirements.
What These Developments Mean for Companies
Even though the standard is not final, several implications are already emerging.
- Preparation matters. Companies developing targets under Version 1.3 now will be better positioned for the transition to Version 2.
- Carbon credits become more clearly integrated. The OER framework gives companies a structured way to take responsibility for ongoing emissions — and, from 2035 onward, a mandatory one for larger companies.
- Transparency expectations rise. Everything from electricity procurement to data assurance becomes more stringent.
- Climate strategy becomes a governance topic. Boards will now play a more active role in approving and overseeing net-zero ambition.
How FORLIANCE Supports Your Transition to SBTi v2
As the landscape becomes more complex, companies need guidance that is both technically sound and practical. FORLIANCE supports organizations in understanding and implementing these new expectations through:
- Development of science-based climate strategies
- Scope 1–3 emissions assessments and calculations
- High-integrity carbon credit portfolio design
- Removal pathway development
- Transition plan preparation and governance support
We help companies turn evolving standards into robust, actionable climate leadership. Contact us for a first consultation with our experts.
