If you’ve been waiting for global climate frameworks to align with the commercial realities of running a business, the wait is over.
The latest release from the Science Based Targets initiative (SBTi) is a welcome end to the one-size-fits-all approach to decarbonisation. Version 2.0 of the Corporate Net-Zero Standard landed on 11 June 2026 – and it’s not a minor update. It’s a meaningful shift in how the SBTi guardrails corporate climate action: a shift from rigid target semantics to a focus on real implementation and accountability.
Since Version 1.3, the business landscape has changed significantly. Over 11,000 companies and financial institutions now have validated science-based targets. Corporate climate target-setting grew 40% year on year in 2025. Momentum is clearly there. But as more companies joined the framework, the cracks in V1.3 became harder to ignore, particularly around scope 3 complexity, the treatment of offsets and a framework that didn’t always reflect the very different realities facing businesses across sectors, geographies and sizes.
V2.0 doesn’t try to paper over those cracks. It addresses them. We’ve dug into what’s changed and what it means in practice for your company’s net-zero targets.
Moving further away from ‘one size fits all’
What’s changed
Under the previous Net Zero Standard, the primary differentiation in requirements was between SMEs and larger companies. V2.0 replaces that with a two-category system based on revenue, emissions and geography.
- Category A – large companies globally and medium-sized companies from high-income countries
- Category B – small companies globally and medium-sized companies from lower-income countries
Why it matters
This is a genuine step toward equity in climate frameworks. The old SME/non-SME split was blunt. It didn’t account for the fact that a mid-sized business in a lower-income country faces a fundamentally different operating context than one headquartered in London or New York. The new categories acknowledge that and build in proportionality accordingly.
This will largely place mid-market businesses in Category A; which means higher expectations, but also a clearer, more structured pathway.
Key differences in requirements are centred around near-term targets and scope 3 inclusion, baseline year greenhouse gas (GHG) assurance and public transition plan reporting.
Transition plans are now mandatory
What’s changed
These plans aren’t just strategic documents – they must include specific actions, the assumptions underpinning them, any dependencies and how risks to delivery will be mitigated.
Why it matters
This is the headline change for us. The shift from targets to plans is something we’ve been advocating for years. Targets alone don’t move the needle – action does. Mandatory transition plans create accountability but they also create something else: shared knowledge.
Category A companies must publish their transition plan. When plans are publicly available, businesses, sectors and regions can learn from each other. More transparency leads to better conversations, faster learning and – hopefully – more genuine progress.
Under V2.0, validation at the end of each reporting cycle will cover not just forward targets but also progress and efforts to achieve previous targets against the set transition plan. This is a straightforward accountability upgrade. The new standard clarifies how businesses will be held responsible for their progress under a best-effort basis, allowing space for reflection and learning.
If you’re already SBTi-validated, or working toward validation, now is the time to start building your transition plan with the rigour V2.0 demands. Don’t think of this as a comms exercise. It needs real operational depth.
Exclusions for near-term scope 3 targets
What’s changed
The previous standard allowed companies to exclude up to 5% of scope 3 emissions from targets. That is now gone. Targets must now cover 100% of emissions in principle. However, V2.0 introduces a more nuanced set of acceptable exclusions in the near-term which really are the big game changer of this standard.
Scope 3 emission categories that represent less than 5% of total scope 3 emissions can be excluded from near-term targets. All companies can also exclude the following from near-term targets (though not long-term ones): purchased goods and services, capital goods, employee commuting, upstream leased assets, downstream transportation and distribution, processing of sold products and franchises. This reflects the level of control businesses have over certain emission sources and perhaps qualms business leader concerns over the uncertainty of emission reductions achievable in the near term.
However, transition plans must still include actions to address these emissions – even where they’re excluded from targets.
Why it matters
The signal is clear: action matters more than target architecture and politics. We expect this shift to encourage more businesses to commit – and to feel more confident doing so. The SBTi is calling this a best-effort basis. Knowing the answer to all problems in the near-term is not required anymore, and was never really possible to begin with.
On the contrary, will non-mandatory scope 3 targets in these areas reduce the pressure on businesses to decarbonise and take action? We hope the accountability framework and transition plan requirements will mitigate this.
Sector-level action counts
What’s changed
Where company-level actions are limited due to issues outside of the companies control, transition plans can now include sector-level actions – industry collaboration, trade body engagement, policy influence, as well as joint supplier and customer targets.
Why it matters
Scope 3 emissions don’t respect company boundaries. Some of the most material emissions in a business’s value chain can only be reduced through collective action – shared supplier standards, sector-wide policy shifts, collaborative R&D. V2.0 formally legitimises that reality. It’s also a green light for positive lobbying and strategic influence as recognised components of a credible transition plan, tying nicely into B Corp’s requirements for collective action. It can’t be used as a cop out of internal actions, though, and the guidance has strict guardrails for this via an implementation hierarchy. For businesses that have felt constrained by a framework that seemed to demand individual action on everything, this is an important adjustment.
A proper framework for offsets
What’s changed
V2.0 introduces the Ongoing Emissions Responsibility (OER) recognition programme. Companies can voluntarily contribute to carbon compensation projects beyond their value chain and receive formal recognition for doing so – covering a set percentage of their ongoing emissions. All companies will also be required to compensate for at least 1% of their ongoing emissions from 2035 (subject to final confirmation).
Why it matters
The treatment of offsets has been one of the most contested areas in corporate climate credibility – and rightly so. V1.3 offered a confusing and divergent structure. V2.0 provides a defined, recognised pathway for companies that want to go further while they work toward their targets. This is also a significant shift for B2B and consumer transparency: structured recognition is far easier to communicate and verify than a vague claim about carbon compensation. For businesses that are serious about their climate impact and particularly supporting regions that need funding for nature restoration, climate justice and resilience, this is a meaningful upgrade.
Third-party verification is now mandatory for some
What’s changed
Category A companies must now have their base year calculations and target metrics independently verified by a third party. This requirement does not apply to Category B companies.
Why it matters
This will add cost. There’s no getting around that. But it will also add credibility – and in a landscape where greenwashing scrutiny is intense, that credibility is commercially valuable. For businesses that have done the work properly, this provides validation and confidence.
What should you do now?
If you’re an existing SBTi signatory, it’s worth understanding how the transition timelines apply to your current commitments – the SBTi has indicated guidance on transition pathways for existing companies. If you’re working toward validation, V2.0 is the standard to build against, and validation under V2.0 will begin in Q1 2027.
The overarching message from this update is one we find genuinely encouraging: action matters and all will be required to demonstrate that. The framework is increasingly designed to reward genuine implementation rather than sophisticated target architecture. That’s the direction of travel, and it’s the right one.
At Greenheart, we support businesses at every stage of the SBTi process – from initial scoping and base year calculation through to transition plan development and stakeholder communication. If V2.0 raises questions about where you stand or what’s next, we’d love to talk.
