SBTi Corporate Net Zero Standard V2.0: Key Updates in the Second Draft

This article is an automatically translated version of the original Japanese article. Please refer to the Japanese version for the most accurate information.

Source: Science Based Targets initiative (SBTi) "SBTI CORPORATE NET-ZERO STANDARD VERSION 2.0 Draft for Second Public Consultation" (link)

Overview

SBTi has released the second consultation draft of the Corporate Net Zero Standard Version 2.0. This significantly updated version from the initial draft released in March 2025 incorporates important changes designed to enhance the credibility and effectiveness of corporate efforts toward achieving Net Zero. Key updates include diversifying the Scope 1 target setting approach, strengthening the consistency in Scope 2 Emission Reduction, and mandating corporate responsibility for ongoing emissions. Feedback on this draft is open until December 8, 2025, and all companies will be required to use Version 2.0 starting January 1, 2028.

Key Points

1. Diversification of Scope 1 Target Setting Approach

While the initial draft proposed variations of the Absolute Contraction Approach, the second draft introduces "Asset Decarbonization Plan" as a new option. This reflects the industry-specific realities of decarbonizing capital-intensive assets, allowing companies more flexible and science-based target setting.

2. Strengthening Consistency in Scope 2 Emission Reduction

For Scope 2 low-carbon electricity target setting, in addition to the transition to zero-carbon electricity presented in the initial draft, the second draft details stringent requirements such as physical deliverability, temporal matching, and limitations on power generation facility operation/recommissioning dates. In particular, the gradual introduction of temporal matching will be required from 2030, significantly improving the credibility of low-carbon electricity procurement.

3. Mandating Responsibility for Ongoing Emissions

The BVCM (Beyond Value Chain Mitigation) recognition program, proposed as optional in the initial draft, has been concretized into a two-tiered recognition mechanism: "Recognized" and "Leadership," in the second draft. Furthermore, from 2035, Category A companies will be required to take responsibility for a portion of their ongoing emissions, and 100% neutralization of Residual Emissions will be required upon achieving Net Zero.

Details

The main changes between the SBTi Corporate Net Zero Standard Version 2.0 (First Consultation Draft and Second Consultation Draft) are as follows:

• Net Zero Target Composition and Period: Requires setting Net Zero targets aligned with a 1.5°C global warming pathway across all scopes (1, 2, and 3). Category A companies must set long-term targets for Scope 1 and 2, and short-term targets every five years (PDF1, C10.2, C12).
• GHG Inventory and Third-Party Assurance: Comprehensive Inventory creation in line with GHG Protocol standards is required, and Version 2.0 will no longer allow for exclusions of less than 5% of emissions. Additionally, Category A companies will be required to obtain limited third-party assurance for their Greenhouse Gas Inventory (PDF1, C6.1, C7.1).
• Improved Data Quality: Companies are required to develop and implement a plan to fully achieve traceability of Emission data for emission-intensive activities by 2035, and for other emission sources by 2050 (PDF1, C10.2).
• Emphasis on Scope 3 Target Setting: Transitioned from previous percentage-based thresholds (67% for near-term targets, 90% for long-term targets) to an approach that prioritizes the most emission-intensive activities and areas with the greatest impact (e.g., Tier 1 Suppliers) (PDF1, C17.1, C18.1).
• Utilization of Energy Attribute Certificates (EACs): "High-level integrity principles" are provided regarding the use of EACs to complement the achievement of Scope 1, 2, and 3 targets, with stringent requirements, particularly in Scope 2, such as physical deliverability and temporal matching (PDF1, ANNEX E, C16).
• Engagement in Policy Advocacy: Companies are encouraged to ensure their engagement in public policy, lobbying, and advocacy efforts are consistent with Net Zero goals (PDF1, R1.2).
• Progress Assessment and Target Updates: Companies must assess progress against targets at the end of each target cycle, identify gaps with the Net Zero benchmark, and then set new targets (PDF1, C33).

Summary

The second consultation draft of the SBTi Corporate Net Zero Standard Version 2.0 represents a significant step towards further enhancing the credibility and transparency for companies in setting and implementing Net Zero targets. In particular, the flexible Scope 1 target setting, stringent low-carbon electricity procurement standards for Scope 2, and mandated responsibility for ongoing emissions will significantly impact how companies implement more effective climate change measures. SBTi plans to actively incorporate feedback from stakeholders to finalize the standard.