The Science-Based Targets initiative (SBTi) published its draft V2.0 Corporate Net-Zero Standard in late 2025. The final version comes into force on 1 January 2028, leaving companies with a decision to make: set targets under the current Corporate Net-Zero Standard v1.3.1 while it remains available, or wait for the new one. This article sets out the key changes in the draft V2.0 Corporate Net-Zero Standard and what they mean for companies weighing whether to act now or wait until 2028. While voluntary adoption of v2.0 is possible starting 1 January 2027, a whole range of factors can influence the decision: company size, sector, and the current state of their decarbonisation pathway. Below is what tips the scales in each direction. It gets a bit technical, so if you are deep in a company’s decarbonisation work, this one is for you.
The case for setting targets now
The 10-year near-term horizon is going away. Under v1.3.1, near-term targets can run up to 10 years. V2.0 narrows that window to a maximum of 5 years. Companies that value the longer runway for planning and capital allocation will only get it by setting targets before 2028.
The 5-year review cycle starts when targets are set. V2.0 retains the mandatory review, but the clock begins whenever a company enters the target setting cycle. Acting now means the first review still falls under the current, simpler v1.3.1 methodology, and companies won’t be assessed against V2.0 until their current review cycle ends.
Small and Medium-sized Enterprises (SMEs) retain access to the streamlined route but with changed approach. The current standard offers a simplified process for SMEs, with no requirement for long-term targets. V2.0 changes that entry pathway, including a new 24-month validation window allowing for adjustments and corrections in the emissions inventory. Whether that change helps or hinders will vary by organisation, but the streamlined option as it exists today will not survive in its current form.
Scope 2 requirements become more demanding. V2.0 introduces a 100% low-carbon electricity requirement by 2040 for large companies with over 10 GWh of consumption, alongside stricter rules for energy attribute certificates: location-based matching, and hourly matching phased in from 2030. Organisations not yet positioned to meet those procurement standards regarding electricity will find the new rules harder to absorb.
Climate transition plans become mandatory for Category A. Under V2.0, Category A companies (large and medium sized companies, operating in higher income regions), must produce a full transition plan covering targets, actions, dependencies, fossil fuel phase-out, and costing. Setting targets now under v1.3.1 defers that obligation.
The case for waiting
V2.0 introduces formal recognition for residual emissions. A new “Taking Responsibility for Ongoing Emissions” framework allows companies to earn recognition for mitigating emissions they cannot yet abate, through climate financing or measurable mitigation outcomes. Organisations seeking credit for action beyond their value chain will find a structured path to claim it under V2.0 that does not exist in v1.3.1.
SMEs gain a commitment phase. V1.3.1 requires SMEs to go straight to validation. V2.0’s new entry check gives SMEs 24 months to validate after passing it, providing meaningful breathing room for organisations still building their emissions inventory.
Asset decarbonisation plans better reflect operational reality in scope 1 and offer more flexibility than simple absolute contraction. For organisations whose emissions fall in steps, for example when a facility is retrofitted or an asset is exchanged, linear trajectories misrepresent the picture. V2.0’s asset decarbonisation plans are designed for exactly this pattern.
Activity pools open up new routes for Scope 3. V2.0 introduces activity pools for situations where direct supplier traceability is not feasible, including energy sheds where energy attribute certificates can be used to address Scope 3 emissions. Carbon credits cannot be applied to target progress under v1.3.1. Activity pools offer a more flexible structure that asset-heavy and complex supply chain companies are well placed to benefit from.
What this means for organisations
Every organisation’s situation is different. SMEs with mature inventories and a preference for simplicity may find v1.3.1 easier to work with, while asset-heavy companies, or those with complex Scope 3 footprints, may benefit more from V2.0’s flexibility. Neither path is straightforward, but if your organisation is working through options, our team can help you build a clear picture of what makes sense given your sector, scale, and current baseline. Get in touch with our climate transition plan lead: Eamon Murphy at emu@nordicsustainability.com.
Note: V2.0 details remain subject to finalisation. Verify all requirements against the latest published version of the standard before making target-setting decisions.
Read more
- A webinar on setting science-based targets in 2026
- 7 steps to develop a robust Climate Transition Plan
- A webinar on how to deliver on climate transition plans
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Author details
Eamon Murphy
Associate Manager, Hub Lead
