The SBTi Corporate Net-Zero Standard (CNZS) Version 2.0 is now here, and companies must consider how the lifted expectations for climate transition will or should impact their strategic planning.
This is the second article in RESET’s thought leadership series on SBTi Net-Zero Standard Version 2. In our white paper published back in March 2026, we first examined and unpacked the strategic implications of the second consultation draft of Version 2.0. Then in our first article “SBTi Version 2 and the Rising Bar: How Tightening Standards Are Reshaping Corporate Sustainability”, we discussed what these evolving standards mean for companies and outlined practical steps for companies at every stage of their sustainability journey to prepare for what lies ahead.
In this article, we explore the major changes of CNZS Version 2 from the current Net‑Zero Standard Version 1.3.1, what this means for corporate implementation, and what companies should do next.
What’s the Direction of Travel for SBTi Corporate Net-Zero Standard Version 2?
Officially released on 11 June 2026, CNZS Version 2 fundamentally expands the focus beyond target ambition toward demonstrable, medium to long-term implementation and delivery. This signals that a validated target is merely the starting point – corporates are now expected to provide robust plans for how their science-based targets will be implemented, governed and sustained over time.
Key changes reflecting this raised bar are as follows:
Stronger focus on implementation and accountability
- Mandatory transition plans, requiring companies to articulate credible, actionable pathways to deliver targets rather than relying on high-level commitments.
- Shortened target update cycle, reduced from 10 years to 5 years, reinforcing the need for more frequent reassessment and course correction.
- Forward-looking carbon removal requirements, introducing expectations to plan for neutralizing residual emissions over time rather than deferring responsibility.
Expanded emissions coverage and traceability
- Full coverage of Scope 1 and Scope 2 emissions (100%), eliminating partial boundary approaches.
- Expanded Scope 3 coverage, requiring targets for all relevant categories above a 5% threshold.
- Separate Scope 1 targets, preventing over-reliance on Scope 2 decarbonization (e.g., renewable electricity procurement) to mask limited progress in direct emissions.
- Mandatory disclosure of Emissions-Intensive Activities (EIA), increasing traceability and requiring companies to demonstrate progress at an activity level.
- Increased expectations on electricity procurement transparency, including hourly matching of low-carbon electricity (LCE) where applicable.
More decision-useful and action-linked Scope 3 approaches
- Introduction of Scope 3 target-setting options tied to direct commercial levers, such as commodity volumes or product-use metrics, improving alignment with real business drivers.
- Greater emphasis on linking targets to operational decision-making and value chain engagement, rather than relying solely on abstract intensity or coverage metrics.
Overall, these changes collectively raise the credibility threshold for net-zero claims, shifting from “what targets are set” to “how targets will be delivered, tracked, and evidenced.”
Greater Flexibility Reflecting Market Realities and Consultation Feedback
It is worth noting that while SBTi Version 2 has tightened expectations around implementation rigor, transparency, and emissions coverage, it also introduces pragmatic adjustments to improve usability across different markets and sectors.
The latest standard has reflected SBTi’s responsiveness to industry feedback and regional constraints by introducing greater flexibility and practicality in several areas:
“Best-efforts” basis for pursuing targets
- Allows “best-efforts” compliance in areas constrained by external factors (e.g. market availability, data limitations), recognising practical implementation challenges.
- Shifts emphasis toward transparent disclosure of actions, progress, and barriers, rather than strict binary compliance in all cases.
Increased flexibility and regional sensitivity
Compared to the 2nd consultation draft, SBTi has:
- Reinstated absolute emission reduction targets for Scope 2 and Scope 3, allowing continuity with existing target structures and clearer demonstration of ongoing reductions.
- Made Scope 2 hourly matching requirements for LCE procurement optional, acknowledging uneven market development across geographies.
- Extended of the 100% low-carbon electricity target year from 2040 to 2050, easing feasibility constraints in harder-to-decarbonize markets.
- Provided more flexible Scope 3 target-setting approaches, including removal of mandatory Tier-1 supplier alignment requirements for purchased goods and services emissions.
Transition Window is a Window for Decision, not Delays
The publication of CNZS Version 2 creates a strategic transition window starting from 2027 through early 2028. Validation under Version 2 opens on 1 February 2027, while Version 1.3.1 remains available until 31 January 2028, after which all new submissions must follow Version 2. While existing targets will remain valid, companies should begin assessing how the new standard is going to affect their business, especially for those who are approaching their mandatory five-year target review.
This transition window is a critical decision period. As expectation raises, pursuing timely strategic review around implementation and credibility will place your company in a much better position than those standing on the sidelines. Corporates can reassess gap of their current targets and test decarbonization strategies alongside transition readiness. The appropriate next step will vary across corporates at different sustainability maturity levels. More detailed guidance for corporates can be found in RESET previous thought leadership article.
CNZS Version 2 Deep-Dive: What’s Changing and What It Means for Corporates
The following section provides a consolidated comparison of key updates in the final Corporate Net-Zero Standard (CNZS) Version 2 against Version 1.3.1, alongside major changes from the second consultation draft and their implications for corporates. Notably, Version 2 introduces a more differentiated framework through Category A and B classifications, with requirements calibrated based on company size and capacity. Category A companies face significantly higher expectations—such as mandatory long-term transition roadmaps and limited assurance—while these remain optional for Category B. This tiered approach, alongside consideration of differing economic contexts, signals a shift toward more practical governance for smaller firms while maintaining a high bar for implementation readiness among larger corporates.
The following table provides a summary of the key updates in the final CNZS Version 2 compared with CNZS Version 1.3.1.
Table 1 Overview of Major Updates in SBTi Corporate Net Zero Standard Version 2
| Theme | Element | CNZS Version 1.3.1 | CNZS Version 2 | Corporate Implications | ||
| Cat A Companies | Cat B Companies | Key Changes from 2nd Consultation Draft | ||||
| General | Transition plan | Optional | Mandatory to submit & disclose 5-year decarbonization plan and long-term roadmap toward net-zero | Mandatory to submit Indicative decarbonization actions for the next 5 years | Now required for all companies (was Cat A only), and a 15-month disclosure deadline added for Cat A) | Enhanced decarbonization planning and roadmap development |
| Target Renewal | Non-Mandatory (Only target review is mandatory) | Mandatory every 5 years Assess and report progress, and establish new targets for the next 5 years | No change 5-year cycle retained | Ongoing monitoring and update on decarbonization progress | ||
| Target Base Year Selection | 2015 onwards | Most recent year (MRTY) unless not representative | No change MRY confirmed | Needs to demonstrate continuous reductions | ||
| Assurance | Optional | Mandatory Limited Assurance For target base year data/LCE calculation/emission from significant EIA*** | Optional | Scope narrowed to Cat A only Cat B downgraded to recommended | Higher data quality requirements and compliance costs | |
| Ongoing Emissions | Voluntary procurement of carbon removals/carbon credits | Required to purchase carbon removals from 2035 ≥ 1% of Scope 1-3 emissions in 2035 and rising linearly to 100% by net-zero year≥ 10% of covered emissions attributable to long-lived GHGs from 2035 and rising linearly to 100% by net-zero year | Optional | 41% long-lived share dropped | Additional carbon removal cost for carbon removal/credits purchase from 2035 | |
| Scope 1 | Target Setting | Combined Scope 1&2 Target Min. 4.2% linear annual reduction Absolute or intensity target, RE target Exclusion allowed: ≤5% emissions | Separate target from Scope 2 100% coverage required Near-term mandatory, net-zero optional | Net-zero kept optional (not mandatory as drafted) | Greater scrutiny for near-term Scope 1 decarbonization Limit reduction strategy options | |
| Set one or more targets (3 target options): Absolute emissions reduction Emissions intensity reduction Asset transition | Alignment target option dropped (share of low-carbon activities)for being overly complex and potentially technology- prescriptive | |||||
| Scope 2 | Target Setting | Separate target from Scope 1 100% coverage required Near-term mandatory, net-zero optional | Net-zero kept optional (not mandatory as drafted) | Elevated electricity demand forecasting and planning capabilities Electrification benefits cannot be captured | ||
| Mandatory absolute emission target if Cat A projected average annual electricity growth >20% Optional low carbon electricity alignment target (100% LCE by 2050) | Absolute emission targetLow carbon electricity alignment target | Emission-based option restored 2040 LCE deadline removed (now 2050) | ||||
| LCE Requirement | Annual matching | Report and disclose hourly matching % for significant electricity use (>10 GWh) 3rd-party assurance for the hourly matching % Declare hourly matching participation intent and explanation | Declare hourly matching participation intent and explanation Optional hourly matching % disclosure | Hourly matching downgraded to voluntary recognition+ reporting only(>10 GWh) EAC vintage relaxed from 10 → 15 years Removed explicit deliverability region definitions Grandfathering of existing power purchase agreements | Limited LCE procurement options More complex electricity management Higher administrative burden on assurance | |
| Scope 3 | Target setting | Mandatory if exceed threshold >40% of total scope 1-3 emissions | Mandatory for near-term targets Optional for long-term targets | Optional for both near- and long-term targets | Cat B fully exempted from mandatory Scope 3(near- and long-term) | Reduced burden for scope 3 decarbonization for small companies, but higher pressure on big ones. |
| Target Coverage | Cover 67% of total scope 3 emissions | Cover all significant Scope 3 categories ≥5% of the total scope 3 emissions (Categories 1-14) Except for activities with no practical influence (e.g., leased assets, processing of sold products) | Optional | 5% threshold retained but broader exclusions allowed (e.g. Cat 3, no-influence activities)Excluded Category 15 | Diverted attention from high-impact reduction measures and increase reporting complexity | |
| Target Approach | Absolute reduction of 25% over 10 years or intensity reductionSupplier engagement (67% in 5 years) | Set one or more targets based on significant categories (3 main options): Overarching Absolute Emissions Reduction Overarching Supplier and/or Customer Alignment Target Category- or Activity-specific Targets | Absolute reduction option restored Tier-1 supplier alignment 70–95% mandate removed | More options targeting Scope 3 category specific activity levers (e.g. by procured volume, product specification, value chain engagement) | ||
| Emissions-Intensive Activities (EIA) | Not required | Mandatory identification and quantification of EIAs and reporting EIAs that represent ≥5% of scope 3 emissions. | Optional | New “EIA” framing replaces “priority activities” ≥5% threshold confirmed Cat B exempted | Increased supply chain management complexity Potential additional workload | |
Translate Targets into Actionable Transition Roadmaps
The real test of Version 2 lies in execution. Corporates must now bridge the gap between high-level ambition and the capital and operational realities of delivery. Meeting these expectations will require more robust emissions data, forward-looking planning, and strengthened governance to track progress and address gaps early. It also means embedding implementation pathways into target design from the outset, rather than retrofitting them later.
One major benefit corporate can gain from continuing to align with SBTi is the globally recognized credibility for their net-zero and science-based decarbonization efforts. SBTi provides a structured and credible framework for managing transition risks, helping companies anticipate policy tightening, shifting market expectations, and evolving investor scrutiny. Early alignment not only strengthens resilience but also positions corporates to respond proactively rather than reactively as requirements become more stringent.
Regardless of where you are in your climate transition journey, RESET Carbon can support you in strengthening your approach and closing critical gaps:
- Emissions inventory development: Establishing robust, audit-ready GHG inventories aligned with the latest standards and boundary requirements.
- Decarbonization roadmap development: Identifying cost-effective abatement levers and translating targets into actionable, time-bound transition pathways.
- SBTi Version 2 feasibility studies: Assessing readiness against updated requirements, including data gaps, target coverage, and implementation constraints.
- SBT target setting: Developing science-based targets aligned with SBTi criteria, tailored to sector pathways and business model realities.
- Implementation support: Supporting execution through governance design, efficiency planning, fuel switch, renewable energy procurement, performance tracking, and integration into business strategy and capex planning.
If you are interested in exploring what SBTi Version 2 means for your organization and identify your best next steps, get in touch with our team to get started now.