SBTi Draft Standard Introduces Formulas for Corporate Climate Progress Assessment

The Science Based Targets initiative's draft Corporate Net-Zero Standard Version 2 proposes standardised formulas that companies must use to assess and publicly report progress against their climate targets. The revision also introduces a target renewal process tied directly to a company's prior performance.

The current version of the standard, V1.2, requires companies to publicly report emissions but does not specify how to measure progress against targets. The draft V2 addresses this gap by introducing pre-defined assessment formulas detailed in Annex G. These formulas are designed to give companies a consistent method for evaluating performance during each target cycle and to provide external stakeholders, including investors and civil society, with comparable data on corporate climate action.

More than 3,000 companies have set science-based net-zero targets or committed to do so using the existing standard, creating a significant market for credible progress reporting. The draft addresses common barriers around emissions data quality by allowing assessment at the activity-pool level when emission sources are only partially traceable, and permitting indirect mitigation methods, such as book-and-claim certificates, as a temporary measure when sources are entirely untraceable. Direct, fully traceable mitigation remains the top priority under the framework.

When companies reach the end of a target cycle, the draft requires them to use their performance assessment results as the basis for setting the next set of targets, creating a feedback loop that rewards outperformers and requires underperformers to take corrective action. The draft also substantially expands guidance on allowable claims, specifying what companies may communicate at each stage, from initial commitment through validation to target renewals. Stakeholders were invited to submit feedback through 1 June 2025 via the SBTi's digital consultation guide.

Key figure — More than 3,000 companies have set or committed to net-zero science-based targets