The Science Based Targets initiative (SBTi) has released a significant update to its Corporate Net-Zero Standard, unveiling a comprehensive consultation draft. This revision introduces increased accountability and flexibility, empowering companies to accelerate their net-zero progress. Companies can provide feedback on the changes until June 1.
The SBTi was founded in 2015 to establish science-based climate target setting as a standard practice for businesses. The organization’s primary objectives include defining and promoting best practices in emissions reduction and setting net-zero targets. It also provides technical guidance to companies aiming to set science-based targets and offers assessments and validations of their emissions reduction goals. More than 10,000 businesses have set science-based emissions reduction targets or made commitments to do so.
After doubling the number of companies with validated targets from 2022 to 2023, the SBTi announced a series of actions as part of its scale-up process to meet surging demand for corporate decarbonization standards and target validation services for companies of all sizes. With that came the announcement from SBTi to revise its Corporate Net-Zero Standard, first published in 2021.
Key Changes in the New Standard
A significant change involves a greater focus on action, with the draft standard separating scope 1 and scope 2 emissions to reflect the unique challenges associated with decarbonizing each category. The updated standard also includes clearer guidelines for managing scope 3 emissions, stronger governance expectations, and a more robust framework for tracking emissions targets. Here’s a breakdown of the key points procurement and sustainability teams need to understand:
1. Structured Validation and Accountability
Companies must publicly commit to net zero by 2050 and publish detailed climate transition plans within one year of target validation. Regular progress assessments will ensure accountability throughout the journey.
2. Pragmatic Approach to Scope 3 Targets
The revised standard recognizes scope 3 emissions as challenging and moves away from rigid percentage-based boundaries. Companies must now target their most emissions-intensive value chain activities, directly engaging tier-one suppliers to set complementary net-zero goals.
3. Innovative Mitigation Flexibility
For emission sources where direct reductions are challenging, SBTi now supports indirect mitigation methods such as book-and-claim systems for sustainable aviation fuel. This provides interim flexibility, enabling continued climate action.
4. Proactive Carbon Removal Strategies
To address residual emissions – those remaining after maximum feasible reductions – companies are encouraged to establish clear carbon removal targets. The standard proposes pathways ranging from mandatory removal targets to flexible hybrid approaches, emphasizing high-integrity solutions.
5. Strengthened Governance and Data Quality Requirements
The new standard reflects rising stakeholder scrutiny and introduces rigorous data assurance expectations. Category A companies – large entities in high-income countries – must secure third-party verification for their greenhouse gas emissions data, ensuring transparency and reliability. Additionally, regular spot checks and baseline reassessments will enhance continuous accountability.
Implications for Procurement & Sustainability Teams
Under the SBTi’s proposals, companies would have “more tailored requirements” based on size and geography. The organization plans to introduce two “categories” of companies. Category A businesses – which the SBTi defines as “large and medium-sized companies operating in higher-income geographies” – will have to meet all of the criteria.
Category B companies – SMEs operating in lower-income geographies – are offered increased flexibility by making some criteria optional. This approach enables more companies to move further and faster in decarbonization.
By focusing on direct suppliers and most emissions-intensive value chain activities, these updates intend to focus action on relationships and areas where companies have the biggest influence.
Enhanced flexibility in mitigation approaches allows procurement teams to actively collaborate with suppliers on joint decarbonization projects, integrating sustainability investments and incentives into negotiations. Furthermore, heightened governance expectations place a premium on improving emissions data accuracy and traceability. Procurement teams will need to incorporate sustainability criteria systematically into contracts, supplier performance reviews, and regular supplier interactions.
Steps You Can Take to Prepare
The SBTi plans to provide a pathway to help companies align their existing scope 3 targets with the new requirements, ensuring a smooth transition Given that the public consultation period is open until June 1, 2025, companies have an opportunity to provide feedback and potentially influence the final version of the standard. Following this, companies should: Companies can proactively prepare by:
-
Speed up target setting and plan for dynamic target reviews: Large companies now have just one year to finalize validated net-zero targets, while smaller companies retain the two-year timeline.
-
Plan for dynamic target reviews: Be prepared for quicker target renewal outside the typical five-year cycle if significant changes like divestments or major data recalculations occur.
-
Create transparent climate roadmaps: Develop and publish detailed climate transition plans within 12 months of target validation, clearly outlining necessary actions and investments to meet 1.5°C goals.
-
Enhance the quality of scope 3 emissions data collection and analysis: The increased emphasis on scope 3 targets, especially for larger companies, necessitates a more granular understanding of value chain emissions. Companies should prioritize identifying their key emission sources within scope 3 and strengthen their engagement with suppliers to improve data transparency and encourage the adoption of their science-based targets.
-
Explore carbon removal opportunities: While the specific requirements for carbon removal are still under consultation, understanding the available technologies, potential pathways, and implications for their net-zero strategies could be good for future alignment.
-
Ready for stricter governance and reporting: This includes reviewing internal processes for target setting, progress tracking, and reporting, keeping in mind the potentially shorter timelines for validation and the possibility of random audits.
The Role of EcoVadis in SBTi Alignment
EcoVadis aligns with and recognizes various environmental standards and frameworks, including the Science Based Targets initiative. Companies already utilizing EcoVadis’ solutions can find synergies in integrating SBTi requirements into their existing carbon management processes.
Since scope 3 emissions are a critical component of the updated SBTi standard, EcoVadis' extensive network of 150,000 rated companies and its strong tools for supplier engagement can be invaluable in helping companies address these complex value chain emissions. Additionally, EcoVadis has demonstrated its commitment to climate action by having its own near-term science-based emission reduction targets approved by the SBTi.
EcoVadis recently launched the Carbon Data Network (CDN), to further enhance scope 3 emissions tracking. Powered by the Carbon Action Manager, this innovative data exchange platform is designed to facilitate the collection of reliable primary carbon data directly from suppliers within EcoVadis' rated company network. The CDN helps companies gain insights into the reliability of their suppliers' carbon data, enabling them to establish accurate baselines and measure progress in reducing emissions.
Contact EcoVadis today to learn how we can assist your company in preparing for SBTi Version 2 and achieving your decarbonization goals.
About the Author
Follow on Twitter Follow on Linkedin Visit Website More Content by EcoVadis EN
