SBTi Draft V2 Standard Separates Scope 1 and 2 Targets for Companies

The Science Based Targets initiative's draft Corporate Net-Zero Standard Version 2, released for public consultation in March 2025, proposes mandatory separation of scope 1 and scope 2 emission targets, replacing the current combined approach. The draft also introduces an enhanced model for scope 3 target setting to address barriers that more than half of surveyed businesses cited as a constraint.

Under the current V1.2 standard, companies may combine scope 1 and 2 emissions under a single target. The draft V2 requires distinct targets for each, citing academic research showing that combining the two scopes alongside unbundled renewable energy certificates can delay grid decarbonisation. All companies would be required to set a location-based scope 2 target and either a market-based scope 2 target or a zero-carbon electricity target. The zero-carbon electricity target replaces renewable electricity targets to remain technology neutral and accommodate nuclear-capable grids.

For scope 3, the draft requires all Category A companies, defined as large and medium-sized companies in higher-income countries, to set targets regardless of the share of scope 3 in total emissions. Small companies and medium-sized companies in lower-income countries, classified as Category B, may set scope 3 targets optionally. The draft also revises target boundaries, moving away from a uniform percentage threshold to one based on emission intensity and the company's degree of influence over specific value chain activities.

A key innovation in the draft is the introduction of alignment targets for scope 3, such as the share of procurement from net-zero-aligned suppliers or the share of revenue from net-zero-aligned products. These non-emission metrics provide companies with greater flexibility in addressing value chain emissions where primary data is unavailable. The standard's public consultation closed on 1 June 2025, with the SBTi planning Q&A webinars, expert working groups and pilot testing to inform revisions before publication of the final V2 standard.

Key figure — More than half of surveyed businesses cited scope 3 as a barrier to setting net-zero targets