The Science Based Targets Initiative (SBTi) has released Version 2.0 of the Corporate Net-Zero Standard, a significant update to its leading corporate climate change framework. This new version is intended to influence the way in which thousands of companies approach decarbonization over the next few decades. The update introduces a more practical and comprehensive approach to achieving net zero, including the first formal recognition of carbon credits and removals in corporate climate strategies. This update highlights a significant shift in the SBTi's approach, as it has traditionally focused on reducing direct emissions and been cautious about using carbon credits.
This release is significant because SBTi validation has become one of the most widely recognized benchmarks for corporate climate credibility. Therefore, the organization’s guidance has a strong influence on corporate climate action and investment decisions around the world. Version 2.0 not only sets targets but also provides companies with a more comprehensive framework for implementing and maintaining progress towards net-zero emissions.
Background: A shift to V2.0
A couple of years ago, many market participants saw the SBTi as presenting a challenge to the voluntary carbon market, as its guidance offered limited support for the use of carbon credits. Many companies felt they had to choose between following the SBTi's targets and buying carbon credits to help with climate action. This contributed to lower levels of demand in the voluntary carbon market at a time when many project developers and climate solution providers were looking to increase corporate engagement.
However, this situation began to change with the draft publication of the Corporate Net-Zero Standard Version 2.0 in late 2025. The new standard not only recognizes that companies will continue to generate greenhouse gas (GHG) emissions while transitioning towards net-zero, but also introduces mechanisms that allow firms to support climate action beyond their direct value chains. The updated framework acknowledges that, when they meet strict integrity requirements and are not used as a substitute for reducing emissions, carbon credits and climate contributions can play a complementary role alongside emissions reductions.
A key component of the update is the Ongoing Emissions Responsibility (OER) framework, which is explained in Chapter 6 of the standard. The OER framework is designed to encourage companies to take responsibility for emissions that still occur during their transition to net zero, while supporting verified mitigation activities and other climate solutions.
Carbon Credits, Offsets, and the Ongoing Emissions Responsibility Framework
One of the features that has received the most attention in version 2.0 is the treatment of carbon credits and removals. Through the Ongoing Emissions Reduction (OER) framework, companies can voluntarily earn recognition for supporting climate action beyond their validated reduction targets. The OER framework includes three recognition levels:
- Engaged: Companies that mitigate at least 1% of their ongoing Scope 1, 2 and 3 emissions through eligible carbon credits or by applying a carbon price
- Advanced: Companies mitigate 100% of their ongoing Scope 1 and 2 emissions, as well as enough Scope 3 emissions to cover at least 10% of their total ongoing Scope 1–3 emissions. This can be achieved through eligible carbon credits or a carbon price of at least US$20 per tonne.
- Leadership: Companies mitigate 100% of their ongoing Scope 1-3 emissions and effectively take responsibility for the cost of climate change by setting aside a budget equivalent to US$80 per tonne to purchase eligible carbon credits to cover their emissions. Then, they use any remaining budget to support additional climate action.
To qualify, carbon credits must meet the integrity requirements established by the SBTi. Eligible credits must be issued ex post and can be derived from activities that:
- Reduce emissions outside a company’s value chain;
- Enhance, Protect or restore natural carbon sinks; or
- Remove and permanently store atmospheric carbon.
It is important to note that the SBTi emphasizes that the OER programme does not replace existing carbon crediting frameworks. Instead, it sets out minimum criteria with the aim of recognizing high-integrity third-party standards and programmes where appropriate.
What changed in V2.0?
The updated standard introduces changes across six key areas:
- Differentiated approaches across markets: Version 2.0 of the Corporate Net-Zero Standard offers customized provisions for small and medium-sized enterprises, as well as businesses operating in lower-income countries.
- Set actionable, context-specific targets: Companies are setting context-specific emission reduction targets across their assets, supply chains, sectors and regions, and these targets are becoming stronger as they are linked to transition planning. Companies need to set at least two short-term goals and may also adopt an overarching net-zero target.
- Act transparently on a best-efforts basis: Targets are pursued on a best‑efforts basis, with companies expected to use all available tools to cut emissions, overcome barriers, and report transparently on assumptions and dependencies.
- Mobilize all available levers to deliver emissions reductions: Corporate Net‑Zero Standard V2.0 establishes an implementation hierarchy, prioritizing direct emission cuts in operations and value chains and then extending to sector‑level actions.
These efforts can be supported by market instruments like energy attributes and commodity certificates under chain‑of‑custody models with guardrails in place.
- Continuously assess, disclose, and strengthen progress: Companies follow a cycle of annual reporting and periodic reviews to track progress, identify barriers, and set new targets. This continuous improvement process ensures alignment with net‑zero pathways and supports ongoing advancement within the SBTi framework.
- Maintain ongoing emissions responsibility: The Corporate Net-Zero Standard V2.0 adopts a balanced approach, recognizing high-integrity carbon credits and other climate contributions as complementary tools to be used alongside, not instead of, companies’ direct emission reductions, through a voluntary recognition program.
Please reach out if you would like to discuss this development and the impact of SBTi CNZS 2.0 on your carbon strategy.