by Emily Damon, David Prieto, and Garrett Keraga | November 25, 2025
The Science Based Targets initiative (SBTi) has released the second draft of its revised Corporate Net-Zero Standard (CNZS) V2 for public consultation. This new version aims to improve clarity, actionability, and usability for companies seeking to set and achieve science-based climate goals.
SBTi’s latest release includes some big and exciting changes. We’ll ground this in a reminder of where SBTi came from and where they have been. For readers familiar with the history of SBTi and the CNZS, feel free to skip on to the next section.
- 2015: SBTi founded by NGOs CDP, WRI, UNGC, and WWF to help companies set climate targets in line with the Paris Agreement’s ambition to keep global average temperature rise to well below 2°C
- 2015-2021: Over 1,000 companies get short-term targets validated by SBTi or commit to doing so
- 2021: SBTi launched CNZS V1, providing SBTi’s first guidance on long-term targets, which included requirements for removals and recommendations to use Beyond Value Chain Mitigation
- 2023: By the end of 2023, SBTi targets and commitments cover 39% of the global market cap
- 2024: SBTi announced CNZS V2 is in the works
- 2025, March: CNZS V2 (first draft) released
- 2025, November: CNZS V2 (second draft) released
- 2025, December: CNZS V2 second draft consultation survey due on December 12
Positive Progress: Highlights from V2
Version 2 of the CNZS improves upon the first in many ways, building on momentum from the first public consultation.
- Net-zero ambition as a “north star.”
The draft emphasizes urgent action, ensuring near-term targets are consistent with long-term goals. It introduces the term ‘ambition’ over ‘target’ to achieve net-zero emissions, and also embeds accountability at the governance level, requiring formal board approval and integration into transition plans. - Expansion of market-based mechanisms.
The ability to use environmental attribute certificates (EACs) has expanded, enabling companies to address both operational and value chain emissions where directly sourcing low-carbon alternatives is not feasible. CNZS V2 states explicitly that unbundled EACs can play a role in reducing Scope 3 emissions, and defined a 24-month window in which EACs can be used. The draft also opens up the use of Scope 3 interventions within activity pools, such as supply sheds, transport operation categories, factory sheds, and energy sheds. EACs and contractual instruments are also acknowledged as valid for Scope 1 & 2 reductions. - Specific target setting per scope of emissions.
Scope 3 guidance allows flexibility through category-specific target-setting approaches, and Scope 1 now includes options like asset decarbonization plans and alignment targets, giving companies clearer ways to address operational emissions. Asset decarbonization plans and alignment targets will be particularly helpful to companies that already have a low-carbon business model. - Addressing ongoing emissions with carbon offsets.
With the CNZS V2, SBTi proposes its strongest-yet support for climate action beyond the value chain. In this latest draft, SBTi has now provided details on how they would incentivize this activity: with a Recognition Program. Companies taking responsibility for their ongoing emissions can achieve Recognized or Leadership status from SBTi by retiring carbon offsets or making “Climate Finance Contributions” to cover 1% or 100% of their emissions, respectively. The program remains optional in this draft. - Additional clarity on the role of carbon removals.
With the CNZS V1, removals requirements don’t kick in until 2050. For there to be any shot at having a sufficient supply of removals in 2050, these projects and technologies need investment and attention today. In CNZS V2, SBTi has removals requirements beginning in 2035. SBTi is asking for feedback on what percentage of ongoing emissions should need to be matched with removals in 2035, and how quickly this requirement should ramp up to the 100% matching needed in 2050.
ClimeCo’s Recommendations: Where More Clarity Is Needed
While SBTi is making important progress, ClimeCo believes there are some critical improvement points that SBTi should focus on in this round of consultation to help companies act with confidence and rapidly accelerate climate action.
- Advancement of key implementation dates.
While SBTi plans to publish the final CNZS V2 in early 2026, the current draft proposes that it will not become mandatory until January 2028. We recommend advancing this to 2027 to align with corporate planning cycles. Additionally, the proposed 2035 start for removals should be brought forward to at least 2030 to encourage earlier action and investment. Each tonne of CO2e reduced or removed sooner has an outsized, positive benefit, and companies know how and where they can do so; they only need a clear, firm signal that the time to begin is now. - Clearer treatment of market-based mechanisms and insetting.
The draft acknowledges that market-based mechanisms (such as insets through EACs and activity pool interventions) can count toward certain Scope 3 targets, but not all. Companies need a clear signal from SBTi to justify early investment in critical decarbonization technologies and value chain projects. Without that certainty, many of the most impactful value-chain decarbonization projects may never get off the ground. - Flexibility in matching rules for renewable energy credits.
Overly strict hourly or geographic matching requirements could hinder participation and reduce efficiency in corporate renewable energy procurement. SBTi should allow credible matching approaches that preserve integrity without creating unnecessary barriers for companies with more limited resources. - Simplification of Scope 3 target-setting methods.
Even with improvements, Scope 3 guidance remains complex for companies to communicate and operationalize. We believe that the greatest climate impact will be achieved if SBTi doubles down on options and flexibility for how companies meet targets, and goes back to simplicity for how companies set targets.
Why Companies Should Act Now
The revised CNZS reinforces that market-based instruments – including EACs, insets, removals, and offsets – will play an integral role in credible decarbonization pathways. Companies should start piloting their use and build an environmental credit strategy now to ensure they have access to high-quality solutions and can navigate this next phase of decarbonization with confidence. With climate action changing and accelerating rapidly toward 2030, early movers will have substantial advantages in managing their costs and maximizing value from decarbonization.
ClimeCo helps companies set SBTi-aligned targets and design and implement the strategies needed to achieve them, combining technical expertise, practical experience, and deep market insight to support credible climate action and build long-term business resilience.
To learn more, watch our webinar to explore the future of ambitious climate leadership, featuring SBTi’s Kyra Powers, or contact us to schedule a consultation with one of our SBTi Certified Experts.
Read the full CNZS V2 draft here, and submit your feedback to SBTi by December 12, 2025.
About the Authors
Emily Damon leads initiatives to accelerate decarbonization, including innovative approaches like insetting. Also known as value chain interventions, insetting provides a GHG Protocol- and SBTi-aligned path to achieving net zero emissions.
David Prieto has designed and implemented transformations for companies seeking to decarbonize their business models and assets over the past decade. His core expertise is around climate risk, decarbonization strategy, energy security, environmental markets, and ESG disclosure
Garrett Keraga excels at leading companies through the process of transforming their impact on the environment by understanding their baseline, assessing appropriate ambitions, identifying and implementing decarbonization levers, and communicating their efforts to stakeholders. His expertise includes ESG and CDP reporting assistance, TCFD and risk analysis, materiality assessments, and renewable energy procurement planning.
