Look Forward, Not Backwards: Science Based Targets initiative Updating Corporate Standard

The Science Based Targets initiative (SBTi) needs your engagement no later than June 1, 2025. SBTi published their initial draft of SBTi’s revised Corporate Net-Zero Standard for public consultation, available here. They are requesting feedback by June 1, 2025.

Why This Matters

• Tackling barriers to scope 3, or value chain, action – the most commonly cited challenge by businesses.

• Maintaining focus on emissions reduction while exploring incentives to support scaling of climate finance and carbon removals.

• Making it easier for companies in emerging economies to set targets.

• Incentivizing ambition and action through new model to validate and recognize progress against targets.

Details

SMEs: Simplified requirements for medium-sized companies in developing markets and SMEs – through the introduction of streamlined requirements reflective of capabilities and resources, providing a springboard for universal voluntary corporate climate action.

Splitting Scope 1 and 2 Targets: SBTi proposes separating Scope 1 and Scope 2 targets to reflect the unique challenges in decarbonizing each of these categories. Scope 1 encompasses emissions from sources that a company controls directly, e.g., company vehicles, industrial manufacturing emissions, or on-site furnaces. Scope 2 includes emissions germinated from purchased energy, e.g., electricity or heating to power office buildings or factories. Proposals include a commitment to move to low-carbon electricity no later than 2040.

Scaling Removals and Mobilizing Finance: The new SBTi standard sets options to address unabated and residual emissions. This includes looking at formally recognizing companies which are investing in Beyond Value Chain Mitigation (BVCM) and the introduction of interim carbon removal targets.

Changes for Scope 3: New options for tackling scope 3 emissions reductions – the area over half of businesses surveyed by the SBTi cited as the most significant challenge in net-zero target setting. SBTi proposes that Category A companies set Scope 3 targets regardless of emission share, emphasizing alignment targets and increasing deals/purchases from suppliers that are aligned with net-zero. Scope 3 encompasses everything that Scope 1 and Scope 2 do not. It represents the emissions from a company that it doesn’t directly control but that are indirectly related, e.g., emissions from suppliers, emissions from employee travel, and product usage from customers.

Transitioning to V2: Companies that currently meet their targets under V1.2 can continue using those targets until the end of 2030 or their expiration, whichever comes first. However, from 2027 onwards, new targets should aim to align with V2.

Changes to Renewal: In V1.2, there is a current requirement to review and revalidate targets every five years but no requirement to set new targets. This requirement changes in V2, where there will now be requirements at the end of each cycle for companies to set new targets.

Action Item

SBTi is requesting your feedback by June 1, 2025.