SBTi Releases Corporate Net-Zero Standard V2.0

This month the Science Based Targets initiative (SBTi) released the long-awaited of its Corporate Net-Zero Standard Version 2.0, representing a significant update to corporate climate target setting since the original standard was introduced in 2021.

The revised standard reflects lessons learned from more than 11,000 companies with validated targets and signals a broader shift in focus from target setting towards implementation, accountability and demonstrable progress.

Why has the standard changed?

Since the original Net-Zero Standard was released, the climate reporting landscape has evolved rapidly. Mandatory climate disclosures are being introduced across many jurisdictions, investors are demanding greater transparency on transition plans, and companies are increasingly seeking practical pathways to achieve their commitments.

Version 2.0 responds to this shift and aims to drive implementation of credible climate action.

Key changes in Version 2.0

SBTi validation is no longer treated as a one-time milestone, businesses are expected to demonstrate ongoing progress as the new framework introduces annual reporting and progress checks.

Companies will be required to:

• Report scope 1 and 2 emissions on an annual basis
• Demonstrate continuous improvement, target-setting can no longer be treated as a one-off exercise
• Publish a transition plan within 12 months of target validation
• Align scope 2 targets with 100% low carbon electricity by 2040

In addition, Version 2.0 changes how carbon credits are treated. It introduces an implementation hierarchy that covers emissions reduction from operations, value chains and market-based instruments. The Standard also provides voluntary recognition of high integrity carbon credits as a complementary contribution to reducing carbon footprint.

What this means for businesses

Companies may continue using Version 1 for target setting until early 2027, with both Version 1.3.1 and Version 2.0 operating during a transition period until 2028. From 1 February 2028, all new science-based targets submitted to SBTi must align with the Version 2 framework.

For organisations, the focus now falls on whether they have the systems and governance in place to meet Version 2.0’s ongoing obligations. Annual emissions reporting requires reliable data infrastructure.

Transition planning requires cross-functional coordination and leadership buy-in. Organisations that have relied heavily on carbon credits to meet their climate commitments may also need to reassess their approach in light of the new implementation hierarchy.  

With the transition period open until 2028, there is time to prepare, but the groundwork is worth starting now.

How Cress can help

At Cress, we support organisations to measure their emissions, develop credible emissions reduction pathways, set science-based targets, prepare transition plans and strengthen climate governance.

Contact Us for support.  

Cress is the Hydroflux Group’s in-house sustainability consulting team, operating as a specialised division and driven by a simple but powerful goal: to help organisations across Australia, New Zealand and the Pacific region create a more sustainable future. As a young and agile team, we combine technical expertise with fresh, forward-thinking approaches to help clients navigate complex challenges across climate risk, emissions reduction, modern slavery, water stewardship, and ESG reporting, building on the Hydroflux legacy of engineering excellence while bringing a sustainability lens to the industries and communities shaping the future of our region.