Making sense of the sustainability reporting landscape
May 30, 2024
The Science Based Targets initiative published its Corporate Net-Zero Standard V2.0 on 14 June 2026. The central change in the standard runs through everything else in the document: the focus moves from setting targets to demonstrating that they are being implemented.
What changed?
Companies must now set two or more separate near-term targets. Scope 1 and Scope 2 are no longer combined into a single target, but treated as distinct obligations. Annual reporting on progress, barriers, and mitigation actions is required, with transparent disclosure of key assumptions. A new implementation hierarchy places direct emissions reductions first. Market instruments such as energy attribute certificates and commodity certificates can count toward targets, but only below direct reductions and subject to integrity requirements including volume and geographic matching and a 15-year generator-age limit.
Carbon credits cannot count toward reduction targets. From 2035, larger companies (Category A) face a progressive responsibility requirement for ongoing emissions, making this a finance and governance question, not just a sustainability one.
New categories
V2.0 divides companies into Category A (large companies and medium-sized firms in high-income countries) and Category B (SMEs and medium-sized firms in lower-income countries). The heavier obligations, including transition plans, third-party assurance, long-term targets, Scope 3 targets, and the 2035 removals requirement, apply to Category A.
2.0 submissions open in Q1 2027. V1.3.1 remains available until 31 January 2028. Our experts covered what science-based targets mean in practice under the new standard. Watch the on-demand webinar!
“V2.0 asks companies to show their work, not just their ambition. This is similar to CSRD requirements: robust data, clear ownership, and a process that can be explained to an auditor.”
Anna Ma
Climate Director
