SBTi near-term and net-zero targets: Setting both under Corporate Net-Zero Standard V2.0 

“Target quality starts with a clear distinction between the target a company must act on now and the endpoint it intends to reach.” 

Companies setting science-based targets in 2027 face a transition between two SBTi standards. Corporate Net-Zero Standard V2.0 opens for validation in February 2027, but Corporate Net-Zero Standard V1.3.1 remains relevant during the transition period.[1][2][3] 

This distinction matters for sustainability directors coordinating climate target setting with CSRD reporting. SBTi validation can provide external support for a target methodology, but it does not replace ESRS disclosures, statutory assurance, or the company’s own transition plan. 

Near-term vs long-term: The structural difference 

Near-term targets drive action during the next target cycle. Long-term targets describe the emissions endpoint that supports a path towards net zero. 

Near-term targets under V2.0 

Under V2.0, a near-term target covers a five-year period starting at the beginning of the most recent reporting period at submission. Companies setting targets under V2.0 for the first time may choose a shorter period to align with their business or reporting cycle. Requirements depend on company category and scope.[1] 

V2.0 requires all companies to set separate Scope 1 and Scope 2 targets. Category A companies must also set a separate Scope 3 target covering every Scope 3 category (categories 1–14) that represents 5% or more of Scope 3 emissions, with limited exclusions that must be reported and justified. For Category B companies, Scope 3 targets are optional.[1] 

Target ambition comes from the eligible SBTi methods, metrics and pathways for each scope, so there is no universal “50% by 2030” rule under V2.0.[1] 

Long-term and net-zero targets under V2.0 

A long-term target and a net-zero target are related, but not interchangeable. A near-term target does not automatically constitute a net-zero commitment. 

Under V2.0, long-term targets are required for any company setting a net-zero target, and for Category A companies whose near-term Scope 1 target uses an intensity or asset transition approach. Long-term targets must be set for 2050 at the latest and bring emissions down to residual levels in line with the applicable net-zero pathway, rather than summarized as a fixed 90% to 95% reduction.[1] Companies pursuing corporate net-zero validation must meet the applicable requirements for near-term action, long-term decarbonisation, and residual emissions. At the net-zero target year, residual emissions must be neutralised with eligible carbon removals, using long-lived removals for long-lived greenhouse gases. Avoided emissions do not neutralise residual emissions.[1] 

What SBTi V2.0 changed for companies setting targets now 

The main changes concern target architecture, Scope 3 coverage, progress transparency, and transition rules. 

Scope 3 requirements are more explicit 

Under V1.3.1, a Scope 3 target is required once Scope 3 reaches 40% of total Scope 1, 2 and 3 emissions, and near-term targets must cover at least 67% of Scope 3 emissions. V2.0 replaces this with a category test: Category A companies must cover every Scope 3 category that represents 5% or more of Scope 3 emissions (categories 1–14), with limited exclusions that must be reported and justified. Both routes rely on a defensible Scope 3 inventory.[1][2][3] 

Target structures differ between V1.3.1 and V2.0 

The transition materials highlight important differences between the standards. Earlier V1 criteria allow more flexibility, including a combined Scope 1 and Scope 2 target and greater flexibility around Scope 3 boundaries. V2.0 introduces more differentiated requirements by scope and company category.[2] 

Progress reporting becomes more transparent 

Companies already have responsibilities to disclose annual GHG inventories and progress against targets under the current framework. V2.0 adds an enhanced transparency framework, including end-of-cycle progress assessments. Category A companies need independent third-party assurance of the data behind progress assessments, as well as limited assurance of base-year emissions and target-setting metrics at validation. SBTi recommends that companies using V1.3.1 adopt third-party assurance for end-of-cycle progress reporting voluntarily.[2][8] 

The transition from V1.3.1 to V2.0 is staged 

SBTi’s transition materials allow companies to continue using V1.3.1 during the transition period. Validated V1 targets remain valid for their full target cycle.[8] The transition guidance should be checked before revising an existing target, because a revision may require submission under V2.0.[2] 

V2.0 validation opens on 1 February 2027. V1.3.1 remains open for new submissions until 31 January 2028, and V2.0 becomes mandatory for all new submissions from 1 February 2028. Companies setting or updating targets before that date need to confirm the current submission route, available criteria, and any changes to SBTi guidance before starting the process.[2] For context, read our overview of the SBTi Corporate Net-Zero Standard V2.0. 

The GHG Protocol revision and its impact on target setting 

The GHG Protocol is revising its Corporate Standard and Scope 3 Standard. Companies should use current applicable guidance, document boundaries and calculation methods, and monitor official updates from both organisations.[4] SBTi states that targeted amendments to the accounting aspects of V2.0, and any related transitional arrangements, will be considered once the GHG Protocol revision is complete. Companies should not assume an automatic transition period until that guidance is published.[1] 

Aligning SBTi targets with ESRS E1-1 under CSRD 

ESRS E1-1 requires in-scope companies to disclose their climate transition plan, including how their GHG reduction targets are compatible with limiting global warming to 1.5°C. Target details such as target year, base year, scopes, and methodology are disclosed under ESRS E1-4.[5] 

ESRS E1-1 does not require companies to use SBTi validation. SBTi can provide external substantiation for the methodology and ambition of a target, but validation does not automatically satisfy every E1-1 disclosure requirement. It also does not replace limited assurance or other statutory assurance procedures. 

The European Commission adopted simplified ESRS on 3 July 2026 for financial years beginning on or after 1 January 2027, and the revised standards refer to third-party target validation as one possible input when showing 1.5°C compatibility. The applicable CSRD scope, reporting year, and ESRS version must still be checked against the latest EU legislation and national implementation. Companies should not assume that all organisations face the same FY2027 reporting or assurance timeline. 

The strongest approach is to develop the SBTi package and ESRS E1-1 plan from the same evidence base. The inventory, target years, reduction levers, governance, and progress indicators should tell one consistent story. 

“SBTi validation can strengthen the evidence behind a climate target, but it cannot replace the transition plan that explains how the business will deliver it.” 

What to do if you are setting targets now 

Companies beginning the process should take five practical steps. Our guide to how to set science-based targets for your company provides additional background on the starting point: 

1. Confirm the applicable SBTi route: Determine whether the submission will use V1.3.1 during the transition or V2.0, which opens for validation on 1 February 2027. V1.3.1 closes to new submissions on 31 January 2028. 

2. Build a defensible inventory: Establish the base year, organisational boundary, operational boundary, Scope 1 and Scope 2 data, and Scope 3 category methodology. 

3. Assess company category and Scope 3 materiality: Confirm whether the company is Category A or Category B under V2.0, then test Scope 3 against the chosen route: the 40% trigger and 67% coverage under V1.3.1, or the 5% significant-category test under V2.0. 

4. Design the transition plan in parallel: Connect target pathways to decarbonisation levers, capital planning, governance, incentives, supplier engagement, and implementation milestones. 

5. Prepare evidence for review and reporting: Maintain clear records of calculations, assumptions, target choices, progress, barriers, corrective actions, and changes to the target package. 

SBTi evaluates the target package against its own criteria. CSRD requires a broader explanation of the transition plan, governance, implementation, and performance. 

Frequently asked questions 

What is the main difference between a near-term and a long-term SBTi target? 

A near-term target drives emissions reductions during a five-year target period under V2.0. A long-term target describes the company’s pathway towards the emissions level required at the net-zero endpoint. The requirements differ according to company category and scope. 

Can companies still use V1.3.1? 

Yes, during the transition period. SBTi’s transition materials allow companies to continue setting targets under V1.3.1 until 31 January 2028, after which V2.0 becomes mandatory for all new submissions. Existing validated targets remain valid for their full target cycle, subject to the applicable SBTi requirements.[2] 

Does SBTi validation satisfy ESRS E1-1? 

No. SBTi validation can provide external support for a target methodology and pathway, but it does not replace the E1-1 transition plan disclosures or statutory assurance process. 

What does V2.0 require for residual emissions? 

At the net-zero target year, residual emissions must be neutralised with eligible carbon removals, using long-lived removals for long-lived greenhouse gases. From 2035, Category A companies must also support carbon removals equal to a share of their ongoing emissions that rises each year until the net-zero year. Avoided emissions cannot be used to neutralise residual emissions under the net-zero framework.[1] 

The road ahead 

SBTi V2.0 changes the target-setting architecture, but the transition does not require every company to replace a valid target immediately. The right route depends on company category, submission timing, target status, inventory quality, and the purpose of the target. 

One robust inventory should support the submission, transition plan, internal decisions, and assurance evidence. 

Nexio Projects supports organisations with SBTi target setting, submission preparation, climate transition planning, and CSRD implementation. Our sustainable climate support connects emissions accounting, target design, decarbonisation planning, governance, and reporting so companies can move from compliance to positive impact. 

“The most defensible climate target is one that the inventory, transition plan, and governance system can all explain in the same language.” 

SBTi support for credible climate target setting 

We are an international sustainability consultancy dedicated to guiding organisations on their journey from compliance to positive impact. We provide expert support across climate strategy, SBTi target setting, net-zero planning, and CSRD implementation. 

Our SBTi support covers inventory readiness, organisational and operational boundaries, Scope 3 materiality, target route selection, submission preparation, and responses to SBTi review feedback. We also connect the target package to the transition plan, decarbonisation levers, governance, investment planning, and ESRS E1-1 reporting. This helps organisations move from a technically valid target to a transition plan that can be implemented and monitored. 

Recognised as the best ESG consultancy in the Netherlands in 2025 by Consultancy NL and a Top Brand in sustainability by EUPD, we help companies connect credible target setting with practical transition planning. 

Speak with Nexio Projects to review your SBTi submission route, inventory readiness, and ESRS E1-1 transition plan before committing to a target pathway. 

References 

[1] Science Based Targets initiative. Corporate Net-Zero Standard V2.0. Published 11 June 2026. https://files.sciencebasedtargets.org/production/files/Corporate-Net-Zero-Standard-version-2.pdf. Accessed October 2026. 

[2] Science Based Targets initiative. SBTi Services. Guide for Companies in the Transition to Corporate Net Zero Standard Version 2.0. June 2026. https://docs.sbtiservices.com/resources/GuideTransitionCorporateNetZeroStandardV2.pdf. Accessed October 2026. 

[3] Science Based Targets initiative. Corporate Net-Zero Standard Version 1.3.1. April 2026. https://files.sciencebasedtargets.org/production/files/Net-Zero-Standard.pdf. Accessed October 2026. 

[4] GHG Protocol. Scope 3 Standard Revisions Phase 1 Progress Update. March 2026. https://ghgprotocol.org/sites/default/files/2026-03/S3-Phase1ProgressUpdate-20260331.pdf. Accessed October 2026. 

[5] European Commission. Commission Delegated Regulation (EU) 2023/2772 supplementing Directive 2013/34/EU as regards sustainability reporting standards. Current consolidated version and subsequent EU amendments should be checked for the relevant reporting year. https://eur-lex.europa.eu/eli/reg_del/2023/2772/oj/eng. Accessed October 2026. 

[6] Nexio Projects. SBTi Corporate Net-Zero Standard V2.0: What you need to know today. https://nexioprojects.com/sbti-corporate-net-zero-standard-v2-0-what-you-need-to-know-today/. Accessed October 2026. 

[7] Nexio Projects. How to set science-based targets for your company. https://nexioprojects.com/how-to-set-science-based-targets/. Accessed October 2026. 

[8] Science Based Targets initiative. Continuing Use of Corporate Net-Zero Standard Version 1.3.1 and Transition to Corporate Net-Zero Standard Version 2.0. June 2026. https://files.sciencebasedtargets.org/production/files/Continuing-Use-of-Corporate-Net-Zero-Standard-Version-1.3.1-and-Transition-to-Corporate-Net-Zero-Standard-Version-2.pdf. Accessed October 2026.