The Science-Based Targets initiative (SBTi) has released a draft update to its Corporate Net-Zero Standard for public consultation. The new version brings structural changes, new methods, and expanded flexibility. But while it aims to raise ambition, it risks shifting focus from action to alignment, and from impact to compliance.
At Earth Action, we’ve reviewed the draft and submitted our response. Below, we outline what’s changed—and what it means for companies trying to lead on climate.
What’s new in the Corporate Net-Zero Standard V2
Public commitment requirements
Companies would be required to make a public commitment to achieving net-zero emissions. This commitment would need to be made prior to SBTi target validation, be approved by the highest governing body, and include a strategy outlining how the target would be achieved.
Separation of scope 1 and scope 2 targets
Under the draft, Scope 1 and Scope 2 emissions targets would need to be set separately—a change from earlier guidance that allowed these to be combined. For Scope 2, companies would be required to set both location-based and market-based targets.
Revised approach to scope 3 emissions
The proposed standard would revise how companies approach Scope 3. Rather than requiring a fixed emissions coverage threshold (67%), companies would be expected to focus on the most significant and influenceable sources of value chain emissions. Targets could be set using one of three methods: absolute reduction, intensity-based reduction, or alignment. The introduction of alignment targets—such as the share of procurement from net-zero-aligned suppliers—would expand the ways in which companies could demonstrate progress.
Indirect mitigation, beyond value chain mitigation and carbon dioxide removals
The draft CNZS v2 distinguishes among three mitigation-related mechanisms that operate outside the company’s direct emissions reductions: indirect mitigation, beyond value chain mitigation (BVCM), and carbon dioxide removal (CDR).
Indirect mitigation refers to measures that influence value chain emissions but cannot be counted as a company’s own reductions. These actions—such as purchasing sustainable aviation fuel through a book-and-claim system—are intended for use when traceability is not feasible or certain emissions sources are hard to address. They may be used under defined conditions to support Scope 3 targets.
BVCM encompasses climate mitigation activities beyond the company’s value chain—such as funding reforestation projects. While not counted toward a company’s target performance, BVCM is encouraged in the standard as a way for companies to take responsibility for “ongoing emissions” that occur during their transition to net-zero.
Carbon dioxide removal is introduced as a mechanism to address residual emissions that cannot be eliminated. The draft allows companies to set interim targets for removals prior to 2050, although the removals component is separate from near- and long-term abatement targets.
New claims and communications framework
The draft introduces a structured framework for how companies can communicate their climate ambitions, progress, and achievement claims. It clearly separates ambition claims (e.g., “we’ve committed to net-zero”) from progress claims (e.g., “we have validated near-term targets”) and achievement claims (e.g., “we’ve reached net-zero status”). This section is designed to prevent misleading messaging and promote consistency in how climate goals are disclosed.
Earth Action’s answer to the public consultation
Shift from company sustainability to supplier sustainability
The new standard puts strong emphasis on sourcing from “net-zero aligned” suppliers. While this approach promotes alignment across the value chain, it may unintentionally encourage companies to wait for supplier action rather than actively reduce their own supply chain emissions. By tying progress to whether suppliers set targets, the framework motivates waiting —not acting. It also reinforces a version of decarbonization that focuses on better products, not fewer. That may lower emissions intensity, but not overall impact. Leading climate bodies, including the IPCC and the IEA stress that efficiency gains must be coupled with reductions in total supply and demand. Without clear incentives to reduce activity or redesign supply chains, companies may simply optimize business-as-usual—rather than transform it.
A step away from science-based targets
Science-based targets were built on a simple idea: that companies could align their emissions pathways with the Paris Agreement through clear and quantified reduction targets. CNZS V2 shifts that foundation. The standard retains specific targets for Scope 1 and 2 but introduces more flexible ‘alignment-based’ approaches for Scope 3, which can obscure the link to a defined carbon budget.
This makes it harder for smaller companies (especially those not seeking full SBTi validation) to assess their ambition or understand what “enough” looks like. For Earth Action, carbon footprinting and trajectory modelling are critical tools, they’re the foundation of actionable roadmaps. If we lose that clarity, we risk losing the very thing that made SBTi valuable: a shared definition of credible ambition.
For many companies—especially in energy, transport, and manufacturing sectors—emissions from the use of sold products represent most of their climate footprint. The draft standard introduces alignment targets for these emissions as well but offers no concrete criteria for what makes a product “net-zero aligned”. This lack of definition is problematic because this concept is at the core of the new standard. It leaves companies without clear direction on how to transform their product portfolios.
Complexity that risks paralysis
The draft standard is highly complex. It introduces multiple target types, conditional requirements, and overlapping criteria that may be difficult to navigate. While large companies with dedicated sustainability teams may have the capacity to manage this complexity, small and medium-sized enterprises (SMEs) could face significant barriers to set SBTi targets.
Even companies with capacity will spend enormous time meeting criteria, validating options, and seeking third-party assurance—potentially at the cost implementing real actions.
Complexity that lacks a plan
The draft requires companies to publish transition plans but does not check the credibility and ambition of the plan. It doesn’t review how targets will be met.
SBTi should require publication of detailed and quantified transition plans. It should also provide common methodologies to model actions, factor in business growth, and account for exogenous reductions at the country level.
Equally important is clarity around indirect mitigation, beyond value chain mitigation and removals. Companies often misinterpret these mechanisms as an alternative to mitigation. The standard should draw a much sharper line between footprint reduction and indirect mitigation measures. This is why, at Earth Action, we prefer to align with the Net Zero Initiative (NZI), which offers a clearer framework. It separates a company’s own emissions (Pillar A) from the support it provides to reduce others’ emissions—including indirect mitigation and beyond value chain mitigation (Pillar B)—and from actions that enhance carbon sinks, such as carbon removals (Pillar C). We believe this structure should be more explicitly reflected in SBTi’s standard.
SBTi should also reconsider its omission of avoided emissions, those emissions that a company prevents through its activities, products, or services. These emissions are powerful levers of climate impact. While they shouldn’t be counted within a footprint, they deserve recognition as part of a company’s contribution to global net-zero.
Final thoughts: action must stay at the center
SBTi’s Net-Zero Standard V2 risks becoming a complex framework that asks for targets—without checking for plans. We’re calling for a stronger focus on the how.Companies need support to model real transition plans, understand their footprint, and set strategies that are credible, ambitious, and achievable. Especially now, when climate targets are no longer optional—but expected.
As always, Earth Action stands ready to help organizations move from compliance to transformation. We believe in the power of clear data, smart strategy, and bold action.
Get in touch with Earth Action for expert guidance.
