New SBTi guidance for corporate net-zero target setting goes into effect in 2028

Emphasis on implementation and accountability

The final standard places greater emphasis on how companies deliver against targets, not simply whether targets are set. SBTi describes CNZS v2.0 as ”moving beyond target setting alone to support implementation and progress across the full net-zero journey.”

Companies are expected to use all available levers to reduce emissions and be transparent about assumptions, dependencies, barriers, and mitigating actions where progress is constrained. The new standard introduces 15 criteria and recommendations for target implementation, including a hierarchy to guide prioritization of actions, incorporates considerations for actions and market instruments, and provides requirements and recommendations for addressing scope 2 emissions. It also encourages enabling actions that “help address underlying constraints and support future emissions reductions” and provides additional recognition for companies pursuing these efforts.

Perhaps one of the most substantial changes is a shift towards more flexible target setting methods. This flexibility has been added both for the types of companies covered, introducing size and geography differentiators, as well as the target setting methods for scopes 1, 2, and 3.

• Company categories are introduced, allowing differentiation between large and small companies and by geography. Category A companies are large companies from all countries and medium-sized countries from high-income countries. Category B companies are small companies from all countries and medium-sized countries from lower-income countries. Requirements for Category A companies are more stringent.
• As in the initial draft, specific scope 1 targets will be required, placing a greater emphasis on direct emissions reductions. Multiple target-setting methods are introduced, including absolute emissions reductions, intensity reductions, and asset transition targets.
• Trending with broader market direction, the CNZS v2.0 places increased scrutiny on scope 2 emissions, including requirements for companies with high electricity demand, electricity consumption projections, and expectations around energy attribute certificates. Notably, the new standard requires scope 2 targets to be established on a location-based (or physical) GHG inventory, while still acknowledging the need for low-carbon energy procurement (see SBTi’s guide to Scope 2 in the Updated CNZS v2.0)
• Scope 3 targets remain one of the most challenging areas of corporate net-zero target setting. The final standard retains the materiality-based approach from the draft standard, requiring targets on scope 3 categories exceeding 5% of total scope 3 emissions. It includes target setting methods related to supplier engagement, emissions-intensity benchmarks, circularity targets, and category- or activity-specific approaches.

Version 2.0 strengthens expectations for how companies track and demonstrate progress. The standard emphasizes annual reporting, periodic assessment of progress, identification of barriers, and target renewal or reassessment over time.

This creates a stronger continuous improvement model. Companies will need better data systems, clearer assumptions, stronger internal controls, and more consistent progress tracking. For many companies, this will also increase the importance of assurance readiness, particularly as climate disclosure expectations continue to evolve.

Transition planning is also more central in the final standard. Version 2.0 strengthens the connection between targets, transition planning, transparency, and delivery, and public summaries indicate that transition plans are mandatory for larger companies. This means SBTi alignment should be treated as fundamental to business strategy, not simply a technical target-setting exercise. Companies will need to connect emissions targets to governance, capital allocation, procurement, operations, risk management, data systems, and accountability.

The introduction of these additional expectations will require more planning, time and budget by companies to adhere to what is still a voluntary framework

Another significant update is the introduction of a more formal approach to ongoing emissions responsibility. SBTi describes this as a way to recognize companies taking short-term action on ongoing emissions, alongside longer-term expectations for larger companies. This builds on earlier discussions of beyond value chain mitigation and gives carbon credits and removals a clearer role. However, the standard continues to prioritize direct emissions reductions across operations and value chains.

Companies should begin evaluating how high-integrity credits, climate contributions, and durable carbon removals may complement their decarbonization strategies.

Companies can continue using the current standard through 31 December 2027, with Version 2.0 expected to become mandatory for new targets from January 31, 2028. Resources for target setting can be found on SBTi’s website. Additional resources will be published throughout 2026 to guide companies in the transition to the CNZS v2.0. Companies can also provide feedback on new target-setting methods and pathways through July 31.

To prepare, companies should:

• Review SBTi guidance on the transition to v2.0 and SBTi flowchart for target setting
• Assess current targets against the final V2 framework
• Revisit Scope 1 decarbonization plans
• Review renewable electricity procurement and EAC quality
• Re-map material Scope 3 categories and available influence levers
• Develop or update transition plans
• Strengthen emissions data, controls, and progress tracking
• Begin evaluating removals and ongoing emissions strategies