SBTi explained: targets, validation and Net-Zero Standard V2.0

The Science Based Targets initiative (SBTi) develops standards and validates company emissions-reduction targets. Validation shows that a target met the applicable criteria when assessed. It does not prove that the company is cutting emissions on schedule.

SBTi stands for Science Based Targets initiative. It is a voluntary, independent target-setting body rather than a regulator, and more than 11,000 companies use its framework. Companies submit emissions baselines and reduction targets for assessment against pathways intended to limit warming to 1.5 degrees Celsius.

The distinction between a validated target and actual delivery matters. A target can be technically credible when it is set while the company later falls behind, struggles with Scope 3 data or fails to turn the commitment into capital spending and operational change. Investors, customers and procurement teams therefore need to look beyond the validation badge to annual emissions, transition plans and progress against near-term targets.

Corporate Net-Zero Standard Version 2.0, published in June 2026, puts more weight on implementation, evidence and progress. It does not make validation a guarantee of performance, but it gives companies and readers a clearer basis for judging what should happen after a target is approved.

SBTi explained at a glance

How SBTi validation works

Who runs SBTi and where its authority comes from

The Science Based Targets initiative was founded in 2015 as a partnership between four organisations: CDP (formerly the Carbon Disclosure Project), the United Nations Global Compact, the World Resources Institute, and the World Wide Fund for Nature (WWF). It is a not-for-profit organisation rather than a government body, statutory regulator or standard-setter with a legal mandate. Its authority comes from the credibility of its methodology, the breadth of its adoption, and the involvement of its founding partners.

Its purpose is to provide companies with a defined pathway for reducing greenhouse gas emissions in line with the science needed to limit global warming to 1.5 degrees Celsius above pre-industrial levels, as set out in the Paris Agreement. The "science-based" in the name refers to the methodology: targets are derived from emissions reduction pathways produced by climate scientists, not from what a company finds commercially convenient or operationally straightforward.

SBTi is not a membership organisation in the conventional sense. A company does not join and display a logo. It develops emissions reduction targets, submits them for validation against SBTi criteria, and if validated, publicly commits to achieving those targets within a defined timeframe. SBTi publishes a target dashboard listing all companies with validated targets. It can and does remove validation for companies that abandon their targets or fail to meet reporting requirements.

By 2026, nearly 12,000 companies had set or committed to targets through SBTi. Corporate target-setting grew by 40% in 2025, with Asia emerging as a significant new centre of activity. SBTi remains the most widely used corporate net zero validation framework in the world.

How science-based targets actually work

The mechanics reveal both what the standard requires and where its limitations lie.

The two-target structure

Under Version 1.3.1, the current active standard, SBTi targets for most companies come in two parts.

Near-term targets require companies to reduce emissions by 2030, or within five to ten years of setting the target, across Scope 1, Scope 2 and relevant Scope 3 emissions. Scope 1 covers direct emissions from a company's own operations, such as combustion in boilers, vehicles and industrial processes. Scope 2 covers indirect emissions from purchased electricity and heat. Scope 3 covers all other indirect emissions across the value chain: supply chain, business travel, product use and end of life. Near-term targets are the operational commitments. They are what a company must actually do in the near term to be on a science-based pathway.

Long-term net-zero targets require companies to reduce emissions by at least 90 to 95% by 2050 against a base year, across all scopes, with any residual emissions addressed through permanent carbon removal. This is the headline net-zero commitment.

The distinction between the two is critical. A company can hold a validated long-term net-zero target while not yet demonstrating progress against its near-term reductions: near-term targets set the operational commitments and long-term targets set the destination. Both are required for full SBTi corporate net-zero validation.

The Absolute Contraction Approach

The Absolute Contraction Approach (ACA) is the primary methodology for setting near-term targets for most sectors. It requires companies to reduce their total absolute emissions, not emissions per unit of output, by a rate consistent with a 1.5 degree pathway. Under the current standard, this has typically meant reductions of around 4.2% per year through to 2030, although companies should check the applicable pathway and sector guidance rather than treating that figure as a universal rule.

In April 2026, SBTi updated the ACA method appendix to improve consistency and implementation while maintaining the net-zero ambition. That update matters for companies still using Version 1.3.1. The larger change is Version 2.0, which changes how target setting, implementation and ongoing progress fit together.

Scope 3: the hardest requirement

Scope 3 emissions are the largest source of greenhouse gases for most companies and the hardest to measure, report and reduce. For a food company, the majority of its emissions are in its agricultural supply chain. For a bank, they are in its lending and investment portfolio. For a technology company, they are in the manufacturing and use of the products it sells.

Under Version 1.3.1, companies whose Scope 3 emissions represent more than 40% of total emissions must set a Scope 3 near-term target. This threshold captures most large companies in most sectors.

The difficulty is structural. Scope 3 data requires information from hundreds or thousands of suppliers and value chain partners, most of whom will have their own data gaps and measurement challenges. A company cannot reduce its Scope 3 emissions without engaging its entire supply chain, which requires leverage, resources and time that many companies do not have.

That pressure sits behind the 2024 crisis.

The 2024 crisis

The events of April to July 2024 are the most important episode in SBTi's history and the least known outside specialist sustainability circles. Understanding what happened matters for anyone relying on SBTi validation as a signal of corporate climate credibility.

The April 9 statement

On 9 April 2024, the SBTi board of trustees published a statement on the organisation's website. It indicated that environmental attribute certificates, a category that includes carbon offsets, could be permitted for use by companies seeking to meet Scope 3 emissions reduction targets under the SBTi framework. This was a significant departure from the organisation's existing position, which required companies to reduce Scope 3 emissions across their value chains and treated offsets as a tool for addressing residual emissions only, not as a substitute for reduction.

The statement had not been shared with SBTi staff before publication. According to Bloomberg reporting, SBTi's communications team initially believed the website had been hacked because the statement had appeared without internal warning. When it was confirmed as a legitimate board communication, the response was immediate.

The staff revolt

A majority of SBTi staff signed a letter to management calling for the resignation of chief executive Luiz Amaral and the board members who had supported the policy shift. The letter stated that the board had "undermined our standard operating procedures and governance processes." It warned that SBTi risked becoming "a greenwashing platform where decisions are unduly influenced by lobbyists, driven by potential conflicts of interest and poor adherence to existing governance procedures."

Staff from the Target Validation Team, Target Operations Team and Technical Department were among those who signed. Members of SBTi's technical advisory group also expressed anger at the decision. Stephan Singer, a senior adviser at Climate Action Network, told Reuters he had resigned over the issue.

The letter stated that the board did not hold sole decision-making authority over SBTi frameworks, a point that went directly to the governance question at the centre of the crisis.

The reversal

Three days later, on 12 April, the SBTi board issued a clarifying statement. It said that no change had been made to SBTi's current standards. The April 9 statement, it explained, had described a proposed direction for consultation, not a policy decision. The consultation process for the revised standard would proceed through proper channels.

The policy was not adopted and the standard was not changed, but the episode significantly damaged institutional credibility. The clarification did not fully answer how a major policy proposal had been published without staff knowledge or why the board had issued a statement that did not reflect its own governance procedures.

The CEO's departure

On 2 July 2024, Luiz Amaral announced his resignation as chief executive of SBTi. The organisation said he was departing for personal reasons. His announcement came on the same day that more than 80 civil society organisations, including Oxfam, Amnesty International, Greenpeace, Global Witness, ClientEarth and Carbon Market Watch, published a joint letter calling on SBTi to exclude carbon offsets from its revised standard.

Holger Hoffmann-Riem, a member of SBTi's Technical Advisory Group, told Reuters that a fresh start, with new board members, a new governance structure and a new chief executive, was needed for SBTi to regain its credibility. No board members resigned.

The synthesis report

On 30 July 2024, SBTi published a synthesis of evidence on the effectiveness of carbon credits. The report had been commissioned as part of the standard revision process. Its conclusion was that various types of carbon credits have not consistently delivered the climate outcomes claimed for them. Carbon Brief described the report as a severe challenge to offset claims. Researchers quoted in coverage called it a major rebuke to offsets.

The institution that had briefly considered allowing carbon offsets to count toward science-based targets had published evidence that offsets were largely ineffective as a mechanism for reducing atmospheric greenhouse gas concentrations. The April 9 statement and the July synthesis report came from the same organisation, within the same four-month period.

What the crisis revealed

Three things are more important than the specific policy question.

The first is governance fragility. SBTi is a private not-for-profit with no statutory basis and no government mandate. Its authority rests entirely on the credibility of its methodology and the trust of the companies, investors and regulators relying on it. The 2024 episode demonstrated that a single board decision, made without staff consultation and outside standard governance procedures, was sufficient to destabilise that credibility. Ulrich Volz from SOAS University of London noted publicly the risk of outsized influence from philanthropic funders and financial institutions on climate-focused standard-setting bodies. SBTi denied that commercial interests had influenced the board's decision. The question of who funds and influences private standard-setting bodies remains live.

The second is that Scope 3 pressure is real. The underlying reason the board was considering offsets for Scope 3 is that thousands of companies have committed to SBTi targets that require Scope 3 reductions they are struggling to deliver. Supply chain emissions are genuinely difficult to measure and reduce. The pressure to find an alternative mechanism was not invented. The proposed solution was wrong, but the problem it was trying to address has not been resolved.

The third is the concentration of risk. The corporate net zero credibility system had been built, to a significant degree, on a single private organisation whose governance structures proved inadequate under pressure. Disclosure frameworks such as the Task Force on Climate-related Financial Disclosures (TCFD), ISSB standards, statutory reporting regimes and company-level transition plans each have their own weaknesses. The wider sustainability framework map helps show how those systems overlap. But the SBTi episode illustrated a particular vulnerability: when one institution is the de facto arbiter of something as important as corporate net zero credibility, its governance failures have systemic consequences.

What Version 2.0 changes

Corporate Net-Zero Standard Version 2.0 was published on 11 June 2026. It is not a cosmetic update. It changes the centre of gravity from "has the company set a target?" to "can the company show how the target will be implemented, monitored and strengthened?"

The pressure comes from three places. First, many companies have already made climate commitments that are harder to deliver than they are to announce. Second, Scope 3 emissions depend on suppliers, customers, land use, logistics and product use, which means a company rarely controls the full result directly. Third, public claims are under more scrutiny. A validated target that is not backed by evidence can become a reputational problem rather than a credibility signal.

The timing

SBTi says companies can submit targets for validation under Version 2.0 from the first quarter of 2027. Companies can use either Version 1.3.1 or Version 2.0 until 31 January 2028. After that, Version 2.0 becomes mandatory for target submissions.

That transition period is important. A company setting or renewing targets in 2026 may still use Version 1.3.1, but it should not ignore Version 2.0. The new standard tells companies where evidence expectations are moving: more explicit implementation planning, clearer disclosure of barriers, stronger progress assessment and more disciplined treatment of market instruments and ongoing emissions.

Scope 3 becomes more operational

Version 2.0 does not make Scope 3 easy. It makes the problem more explicit. The standard asks companies to identify significant Scope 3 categories and set targets that reflect where they have levers to reduce emissions. For a retailer, that might mean suppliers and product design. For a technology company, it might mean manufacturing, electricity use and product life cycle. For a food company, it might mean land, agriculture and commodity supply chains.

This is a better framing than pretending every company controls its value chain equally. It also creates a harder evidence question. If a company says it could not reduce emissions because suppliers, customers or infrastructure were outside its control, the reader should ask what it did try, what evidence supports the claim and what will change in the next target cycle.

Carbon credits are back, but not as a free pass

One of the most sensitive parts of Version 2.0 is ongoing emissions responsibility. This creates a route for companies to support high-integrity mitigation or climate contribution activities in relation to ongoing emissions. The key point is that SBTi frames this as a complement to reductions, not a substitute for reducing a company's own emissions footprint.

Keep those claims separate. A company should not imply that buying credits means its target has been delivered. Target progress, inventory accounting and climate contributions need to be kept separate. If carbon credits are used, the questions become familiar: are outcomes verified, are units retired, is double claiming prevented, and is the claim wording consistent with the evidence? Our VCMI Claims Code guide explains the public-claims side of that problem.

Governance changes since 2024

SBTi says Version 2.0 was developed through two public consultations, pilot testing, expert working groups, approval by its independent Technical Council and adoption by the Board of Trustees. That process is more formal than the April 2024 board statement that triggered the crisis.

Even so, the governance question has not disappeared. SBTi is still a private not-for-profit standard setter with unusual influence over corporate climate credibility. Whether the new standard holds up will depend not only on the text, but on how target validation, transition arrangements, assurance evidence, dashboard status and claims are governed in practice.

Target-setting is still growing

Despite the 2024 crisis, corporate target-setting through SBTi grew by 40% in 2025. The framework has not been abandoned. Asia, where corporate climate ambition is expanding rapidly, is now a significant centre of SBTi activity. Companies that considered withdrawing their targets or delaying validation in the aftermath of the 2024 crisis largely did not do so.

What an SBTi target actually signals, and what it does not

This section is the practical core for anyone evaluating a company's climate claims or deciding whether to set targets.

What an SBTi-validated target does signal

A validated target means a company has submitted its emissions baseline and proposed reduction pathway to independent assessment against SBTi's criteria. If validated, the target is consistent with a 1.5 degree pathway at the point of setting. The company has committed publicly to achieving the target. SBTi publishes a dashboard of all validated targets and monitors compliance with reporting requirements. It can revoke validation for companies that abandon targets or fail to report.

An SBTi target is more meaningful than a self-declared net zero commitment with no third-party validation. The methodology is specific, the validation process is independent, and the public commitment creates reputational accountability.

What an SBTi-validated target does not signal

Validation is a point-in-time assessment, not ongoing monitoring of performance. A company can hold a validated target and be making no progress toward it. SBTi validates targets, not trajectories.

Scope 3 targets are the hardest to verify. For most large companies, the bulk of their emissions and the bulk of their SBTi commitment is in Scope 3. Whether a company is genuinely engaging its supply chain to reduce those emissions, or holding a validated commitment on paper while doing little operationally, is not visible from the SBTi dashboard.

A validated target does not automatically mean a company has a credible transition plan. Version 2.0 strengthens the link between target setting and implementation, but the quality of transition plans will still vary. Our guide to climate transition plans covers what a credible plan looks like.

An SBTi target is not a TCFD or UK Sustainability Reporting Standards (UK SRS) disclosure. SBTi is the target-setting framework. TCFD-style reporting and the incoming UK SRS are disclosure frameworks through which companies report on climate-related financial risks and opportunities, including progress against targets. A company may have an SBTi target without adequate climate disclosure, and vice versa. The two frameworks are complementary, not interchangeable. Our guide to TCFD explained covers the disclosure side in detail.

Questions behind the target

For investors and procurement teams evaluating a company's SBTi status, the strongest questions are not about the target itself but about the trajectory behind it. What progress has the company made against its near-term Scope 1 and 2 targets since validation? What is the quality and coverage of its Scope 3 data? Has it published a transition plan? These questions distinguish a company that is genuinely decarbonising from one that validated a target and moved on.

The alternatives

SBTi is not the only approach to science-based target setting. The International Organization for Standardization (ISO) is developing ISO 14060, a standard for net-zero-aligned organisations, which is expected to go to global public consultation in 2026. A government-backed standard from ISO would introduce a different kind of credibility anchor, one that does not depend on a single private not-for-profit's governance. The standards landscape is evolving, and the concentration of authority in SBTi that the 2024 crisis exposed may become less pronounced over the next several years.

The test for SBTi

SBTi survived the 2024 crisis, published Version 2.0 and continued to grow: more than 11,000 companies are now using the framework. By those measures, the controversy did not break the institution.

What it established is harder to measure. The credibility of corporate net zero commitments rests, to a significant degree, on governance structures that are less robust than the confidence placed in them would suggest. A private not-for-profit organisation, funded by philanthropies and partner institutions, setting standards that affect the climate ambitions of thousands of companies and the investment decisions of asset managers, was always going to face a serious test eventually.

Version 2.0 is the first major answer to that test. It gives companies more routes, more implementation language and more room to explain barriers. That makes the framework more usable. It also means readers need to pay closer attention to the evidence behind the target.

For companies setting targets now, the practical position is clear. Use the correct SBTi version for the submission window. Understand what near-term Scope 1, Scope 2 and Scope 3 reduction actually requires. Treat ongoing emissions responsibility as a separate climate contribution, not proof that the target has been met. And do not treat validation as the end of the process. SBTi validation is a starting point for accountability, not a destination.

Common SBTi questions

Is SBTi Version 2.0 mandatory now?

Not yet for all submissions. SBTi says companies can submit targets under Version 2.0 from the first quarter of 2027. Version 1.3.1 and Version 2.0 can be used in parallel until 31 January 2028, after which Version 2.0 becomes mandatory for target submissions.

Does Version 2.0 allow companies to use carbon credits?

Version 2.0 introduces an ongoing emissions responsibility recognition route and allows high-integrity carbon credits or other climate contributions in that context. It does not make credits a substitute for reducing a company's own emissions footprint.

Does an SBTi target prove a company is reducing emissions?

No. It shows that a target was validated against SBTi criteria. Readers still need to check annual emissions data, Scope 3 coverage, progress against near-term targets, transition plans and the quality of any climate contribution claims.

Is SBTi the same as the GHG Protocol?

SBTi and the Greenhouse Gas Protocol serve different purposes: the protocol provides emissions accounting standards, while SBTi provides target-setting standards and validation. They are closely connected because SBTi targets rely on greenhouse gas inventory data.

Useful source links

• SBTi: The new Corporate Net-Zero Standard Version 2.0
• SBTi: Corporate Net-Zero Standard V2.0 release note
• SBTi: Corporate Net-Zero Standard Version 2.0 PDF
• SBTi: Corporate Net-Zero Standard V2 main changes document
• SBTi: Corporate Net-Zero Standard development process
• SBTi: The Corporate Net-Zero Standard Version 1.3.1
• SBTi: Corporate Net-Zero Standard V1.3.1 PDF
• SBTi: How to set science-based targets
• SBTi: Organisational governance
• ESG Dive: SBTi walks back carbon offset changes (April 2024)
• Bloomberg: How SBTi descended into chaos (May 2024)
• Bloomberg: SBTi CEO to resign after offsets backlash (July 2024)
• Reuters: SBTi offset controversy and CEO departure