SBTi explained: science-based targets, Version 2.0 and the 2024 crisis

The Science Based Targets initiative (SBTi) validates the climate targets of thousands of companies. In 2024 its credibility came under serious strain. Here is what SBTi is, how it works, what the 2024 crisis revealed, and what Version 2.0 means for businesses setting targets now.

This guide is for general information only. It is not legal, accounting, regulatory or investment advice.

For related reading, see our guides to climate transition plans, Scope 1, 2 and 3 emissions explained, Task Force on Climate-related Financial Disclosures (TCFD) explained, Corporate Sustainability Reporting Directive (CSRD) explained and how carbon credits work.

Nearly 12,000 companies have set or committed to science-based targets validated by the Science Based Targets initiative (SBTi). Major banks, manufacturers, retailers and technology companies display SBTi validation as a signal that their targets have been assessed against a recognised climate methodology. Investors use it as a proxy for credible net zero commitments. Procurement teams use it as a supplier qualification criterion. It has become, in practical terms, the closest thing the voluntary corporate world has to a widely adopted independent net zero validation framework.

Understanding what SBTi is, what it actually requires, and what happened to it in 2024 is more useful than displaying the logo.

On 9 April 2024, the SBTi board of trustees published a statement indicating that companies could be allowed to use environmental attribute certificates, a category that includes carbon offsets, toward Scope 3 emissions targets under the SBTi framework. The statement had not been shared with SBTi staff before publication. A majority of staff sent a letter to management calling for the resignation of the chief executive and the board members who had supported the change. Three days later, the board clarified that no policy change had been made. Two months after that, the chief executive resigned. SBTi then published an evidence synthesis questioning the effectiveness of several categories of carbon credits.

The organisation that validates corporate net zero targets had, across four months, appeared ready to change a core methodological position, triggered a staff revolt, lost its chief executive, and then published evidence undermining the policy direction it had briefly signalled. Many companies with SBTi-validated targets will only have seen the validation badge. The governance crisis behind it matters just as much.

This is a guide to what SBTi is, what its targets actually require, what the 2024 crisis revealed about the architecture of corporate net zero credibility, and what the revision of the standard means for companies setting targets now.

Quick answer

What SBTi is

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. It is not a government body, not a statutory regulator, and not a standard-setting organisation 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

Most guides to SBTi describe what it is without explaining how the targets work in practice. The mechanics matter, because they reveal both what the standard genuinely 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 are the operational test. Long-term targets are 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. This adjustment, which reflects Intergovernmental Panel on Climate Change (IPCC) Sixth Assessment Report carbon budget framing, is the most recent technical update to the active standard.

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.

This is where the 2024 crisis originated.

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. The standard was not changed. But the damage to institutional credibility was significant. The question of how a major policy proposal had been published without staff knowledge, and why the board had issued a statement that did not reflect its own governance procedures, was not fully answered by the clarification.

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), statutory reporting regimes and company-level transition plans each have their own weaknesses. 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.

Where SBTi stands in 2026

Version 1.3.1: the current active standard

The Corporate Net-Zero Standard Version 1.3.1, updated in April 2026, is the standard against which companies are currently setting and validating targets. Companies setting new targets in 2026 and 2027 should use the active Version 1.3.1 materials unless SBTi publishes final Version 2.0 requirements earlier and confirms a different transition rule. Targets validated under the current standard remain valid for their target timeframe, subject to SBTi's update and reporting requirements.

Version 2.0: the revision in progress

The second public consultation on Version 2.0 closed in December 2025. As of 4 June 2026, the final Version 2.0 has not yet been published. SBTi says it expects to publish the final standard in 2026. The second consultation materials indicate that new target submissions are expected to transition to Version 2.0 from 1 January 2028, with more detail on transition arrangements for existing validated targets to follow.

The substantive changes in the Version 2.0 draft include scope-specific target setting, which separates near-term requirements for Scope 1 and 2 from those for Scope 3. The Scope 3 framework in Version 2.0 is described as focused and flexible, a formulation that reflects the difficulty of Scope 3 compliance that the 2024 crisis brought into focus. Version 2.0 also introduces a new mechanism for taking responsibility for ongoing or residual emissions, which is a more carefully structured answer to the question the April 2024 board statement tried to address poorly.

Large companies in high-income countries, classified as Category A under Version 2.0, will be required to publish a credible transition plan within 12 months of target validation and to begin addressing residual emissions through carbon removals from 2035.

Governance changes since 2024

SBTi has not publicly described its governance reforms in enough detail to fully resolve the questions raised by the 2024 crisis. A new chief executive took over after Amaral's departure. The board composition has changed. The Version 2.0 development process has involved more than 1,000 stakeholder inputs and multiple expert working groups. Whether the governance structures are now adequate to withstand the pressures that will come with Version 2.0's implementation, particularly around Scope 3 and the ongoing question of how residual emissions are treated, will be tested over the next several years.

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 mean a company has a credible transition plan. Version 1.3.1 does not require one for all companies in the way the Version 2.0 draft proposes. Version 2.0 is expected to require Category A companies to publish one within 12 months of validation, but the quality of those plans will 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.

The most useful questions to ask

For investors and procurement teams evaluating a company's SBTi status, the most useful 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.

Conclusion

SBTi survived 2024. The standard is being revised. Corporate target-setting is growing. Nearly 12,000 companies are using the framework. By those measures, the crisis 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, when published, will be the most important test of whether SBTi has drawn the right lessons from 2024. A more flexible Scope 3 framework that genuinely reflects the difficulty of value chain emissions reduction, combined with stronger governance and a credible transition plan requirement, would represent a meaningful improvement. Whether the draft that has gone through two rounds of consultation delivers that is a question for the final text.

For companies setting targets now, the practical position is clear. Use the active Version 1.3.1 materials unless SBTi has published final Version 2.0 transition instructions by the time the target is submitted. Understand what near-term Scope 1 and 2 reduction actually requires. Take the Scope 3 commitment seriously rather than treating it as a future problem. And do not treat validation as the end of the process. SBTi validation is a starting point for accountability, not a destination.

Useful source links

• SBTi: The Corporate Net-Zero Standard
• SBTi: Corporate Net-Zero Standard V1.3.1 PDF
• SBTi: How to set science-based targets
• SBTi: Organisational governance
• SBTi: Developing the Corporate Net-Zero Standard
• 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
• Latham and Watkins: SBTi V2.0 second consultation summary (November 2025)
• Institute of Sustainability Studies: SBTi V2.0 draft update (November 2025)

The Planet Brief covers net zero, environmental, social and governance (ESG) reporting and sustainable finance. For related reading, see our guides to climate transition plans, Task Force on Climate-related Financial Disclosures (TCFD) explained, Scope 1, 2 and 3 emissions and Corporate Sustainability Reporting Directive (CSRD) explained.