The Corporate Net-Zero Standard by the SBTi

Faced with the climate emergency, a growing number of companies are announcing "carbon neutrality" or "Net-Zero" targets. However, not all commitments are equal. To ensure that decarbonization strategies are aligned with climate science and to avoid greenwashing, the Science Based Targets initiative (SBTi) launched a global standard in 2021: the Corporate Net-Zero Standard. This ambitious framework provides companies with a credible, science-based roadmap to achieve the goals of the Paris Agreement: limiting global warming to 1.5°C by 2050.

This article presents the essential elements of the Corporate Net Zero Standard, as well as the latest news related to the SBTi and the Standard's update.

To delve deeper into this topic, we invite you to download our complete and detailed guide on the SBTi Corporate Net Zero Standard.

What is the Science Based Targets initiative?

The SBTi is a partnership between the CDP (Carbon Disclosure Project), the United Nations Global Compact (UNGC), the World Resources Institute (WRI), and the World Wide Fund for Nature (WWF). Its main mission is to encourage companies worldwide to set greenhouse gas (GHG) emission reduction targets that are based on climate science. The targets set by a company must be compatible with the level of decarbonization required to keep global warming well below 2°C compared to pre-industrial levels, and to pursue efforts to limit it to 1.5°C, in accordance with the Paris Agreement.

Understanding Net-Zero for Companies

Launched in 2021, the SBTi's Corporate Net-Zero Standard provides the first global framework for companies to set robust, science-based net-zero targets, notably aligned with the definition given by the IPCC. It brings clarity, consistency, and accountability to corporate commitments that were previously often vague and could sometimes lead to greenwashing.

What are the 3 pillars of the Net-Zero Standard?

1. Reducing GHG emissions (Scopes 1, 2, and 3) to zero or a residual level consistent with a 1.5°C-aligned trajectory

Within the framework defined by the SBTi, reducing GHG emissions in a company's operations and across its entire value chain is a priority for achieving net-zero. Companies must therefore set GHG emissions reduction targets compatible with global or sectoral 1.5°C-aligned pathways, at two different time horizons:

• Near-term targets: These targets are set for 5 or 10 years from the submission year and commit the company to an ambitious emissions reduction trajectory by 2030-2035, within its operations (Scopes 1 and 2) and also across its entire value chain (Scope 3).
  
  
• Net-zero targets: These targets define the level of ambition that must be reached by 2050 at the latest to align with pathways aiming to achieve planetary carbon neutrality. These targets provide a long-term vision for companies to rethink their operational strategies.

2. Neutralizing residual emissions

Beyond a significant reduction in their emissions, companies must commit to neutralizing the residual emissions associated with their net-zero targets. This neutralization consists of permanently capturing and storing these emissions, through natural solutions (e.g., reforestation) or technological methods (carbon capture and storage). This process compensates for emissions that cannot be eliminated.

Therefore, a company can only claim to have reached net-zero once it has achieved its long-term targets and neutralized its residual emissions.

3. Beyond Value Chain Mitigation (BVCM)

In addition to the mandatory neutralization of residual emissions, companies are encouraged to invest in mitigation actions beyond their value chain. These actions may include GHG emission avoidance or sequestration projects, such as those related to forestry and land use (like REDD+), conservation projects, energy efficiency, or renewable energy.

This pillar remains voluntary for companies but is strongly encouraged by the SBTi. Indeed, by supporting these projects, companies enable these solutions to scale up globally and thus accelerate the transition to net-zero.

What are the requirements for validating climate targets as defined by the SBTi?

For a climate target to be validated by the SBTi, it must meet rigorous criteria that ensure its ambition and credibility.

Emissions Coverage:

Targets must cover at least 95% of Scope 1 and 2 emissions. If Scope 3 emissions represent more than 40% of the total, a target must also be set to cover at least 67% of this scope for near-term targets and 90% for net-zero targets.

Time Horizons:

Companies must define near-term targets (5 to 10 years from the submission date) to drive immediate action, as well as net-zero targets to be achieved by 2050 at the latest.

Alignment Temperatures:

Near-term targets must be aligned with a +1.5°C pathway for Scope 1 and 2 emissions, and with a +1.5°C or Well-Below 2°C pathway for Scope 3 emissions. Net-zero targets must be aligned with a +1.5°C pathway for Scope 1, 2, and 3 emissions.

Base Year:

The base year used for calculating baseline emissions for the reduction pathway must be set no earlier than 2015. The SBTi recommends using the most recent year available, avoiding years impacted by the Covid crisis (notably 2020 and 2021).

Reduction Pathways:

The SBTi has defined different methodologies for setting the emission reduction levels to be achieved by companies, depending on their sector. The SBTi provides absolute and physical or economic intensity pathways applicable to all sectors, as well as specific sectoral pathways for some of the most strategic and high-emitting sectors, such as aviation, buildings, cement, etc.

What is the SBTi's process for evaluating company targets?

The validation process is designed to be transparent and rigorous, ensuring that only the most robust targets are approved. It consists of five key steps:

Commit:

The company signs a commitment letter, declaring its intention to set a science-based target. It then appears as "Committed" on the SBTi website.

Develop:

The company then has 24 months to prepare its targets following the SBTi's criteria and resources. This step involves conducting a comprehensive GHG emissions inventory assessment, choosing a base year and a target year, and selecting the pathway and methodology used to define the targets.

Submit:

The company submits its targets for technical validation via the submission form available on the SBTi Services platform.

Validate:

A team of SBTi experts evaluates the submitted targets against the criteria. This review may involve several rounds of questions and answers between the SBTi team and the company. If the criteria are met, the targets are validated.

Communicate:

Once the targets are validated, they are published on the SBTi website, and the company can publicly communicate them. The company also commits to publicly report its GHG footprint annually, as well as its progress towards the validated targets.

Which companies have set SBTi targets?

Currently, more than 8,600 companies have targets validated by the SBTi, including more than 2,000 with "net-zero" targets. Notable examples include:

Decathlon:

The company has committed to achieving its net-zero targets by 2050, with a 90% absolute reduction in its GHG emissions (Scopes 1, 2, and 3). The company has also defined the following near-term targets: -42% absolute reduction in Scope 1 and 2 emissions by 2030 compared to 2021, and -42% absolute reduction in Scope 3 emissions.

La Poste: 

The company has committed to achieving its net-zero targets by 2040, with a 90% absolute reduction in its GHG emissions (Scopes 1, 2, and 3). The company has also defined the following near-term targets: -43.6% absolute reduction in Scope 1 and 2 emissions by 2030 compared to 2021, -25% absolute reduction in Scope 3 emissions, and 70% of its investments having set science-aligned targets by 2027.

SFR: 

The operator has committed to achieving its net-zero targets by 2050 with a 90% absolute reduction in its GHG emissions (Scopes 1, 2, and 3). The company has also defined the following near-term targets: -42% absolute reduction in Scope 1 and 2 emissions by 2030 compared to 2022, and 34.1% of its suppliers (based on spend) having validated a science-based target by 2029.

Challenges of Net Zero Commitment

However, many companies have also had their net-zero commitment removed from the SBTi website after failing to submit their targets within 24 months of their commitment.

In its "Business Ambition for 1.5°C campaign" report published in 2024, the SBTi indicates that net-zero commitments have been removed for 284 companies, including Microsoft, Unilever, Carrefour, EDF, and Suez. The reasons cited by companies for this difficulty in submitting targets include the challenge of accurately measuring their GHG footprint, the introduction of new methodological frameworks by SBTi (e.g., the FLAG methodology), or a lack of internal resources.

This removal of commitments, even for multinationals, highlights the complexity of the GHG footprint measurement and target-setting exercise with an associated action plan, and the need to allocate the necessary resources to this task.

Upcoming Evolutions: Draft Corporate Net-Zero Standard V2

In March 2025, the SBTi published the draft of its updated Corporate Net-Zero Standard. This update brings many changes compared to the version currently used by companies. It is currently being tested with some volunteer companies and will be the reference for all companies submitting targets from 2027.

The Corporate Net-Zero Standard V2 notably includes the following changes:

• Definition of different obligations depending on the size and geographical location of companies
• Separation of targets for Scopes 1 and 2, and an obligation to define targets for both "market-based" and "location-based" Scope 2 emissions
• Update of the target boundary rules for Scope 3 emissions to include the most relevant emissions
• Introduction of new indicators on company performance, e.g., share of revenue from net-zero products or services
• Mandatory publication of the company's transition plan
• Third-party verification of the GHG emissions inventory for the base year
• Clarification of the framework concerning the neutralization of residual emissions, and better recognition of companies that finance BVCM 

For more details, please read our dedicated article. 

What is the SBTN and what are the differences between SBTi and SBTN?

As more and more companies submit targets to the SBTi, a sister initiative was founded in 2019, the Science Based Targets Network (SBTN).

While the SBTi focuses exclusively on climate, helping companies set GHG emissions reduction targets, the SBTN has a much broader scope. It aims to develop science-based targets for all planetary boundaries, including not only climate, but also freshwater, land use, biodiversity, and oceans.

All frameworks for defining targets on these themes are now published, and companies can begin to submit their targets for validation. It should be noted that some companies (GSK, Holcim, and Kering) that were part of the pilot to test the SBTN framework have had their first targets published on their website. Kering, for example, has set targets on the volume of water withdrawn from the Arno river basin, and on the absolute reduction of land use by its value chain.

About ClimateSeed

ClimateSeed is a company committed to climate action, helping organizations take action both within their value chain and beyond.

Supported by AXA Investment Managers' impact fund, it is the trusted partner of organizations wishing to contribute to global carbon neutrality. ClimateSeed offers two services:

• Measurement and reduction of carbon footprint:

  Thanks to the GEMS digital platform and the expertise of its consultants, ClimateSeed facilitates data collection, collaboration and automated calculations according to recognized standards (GHG Protocol, Carbon Footprint®, ISO 14064). This makes it possible to develop reduction strategies in line with science-based targets (SBTi).
  
  

• Contribution to carbon sequestration and avoidance projects:

  ClimateSeed supports participation in projects generating carbon credits, guaranteeing traceability, transparency, and risk mitigation, in line with the Sustainable Development Goals (SDGs) created by the UN.
  
  

Since 2018, ClimateSeed has supported more than 200 organizations in their decarbonization and continues its international development to maximize its impact.

Do not hesitate to contact us to explore how ClimateSeed can help you implement specific strategies for your company.