SBTi Corporate Net-Zero Standard – FAQ

These responses are based on the new CNZS V2.0 standard, published in June 2026, and on the clarifications we have received from the SBTi. Several parts of the regulatory framework are still under development, and supplementary guides and guidance are expected. Where this is the case, we have noted it in the response. 

Contents

1. Overview – What Will Change and When (4 Questions)
2. Transition from V1.3.1 to V2.0 (7 questions)
3. Scope 1 and Scope 2 – Electricity, Certificates, and Market Instruments (6 questions)
4. Scope 3 and the Value Chain (8 questions)
5. Carbon Credits, OER, and carbon offsetting (3 questions)
6. Governance, Reporting, and Links to Other Regulations (4 questions)
7. Getting Started and Industry-Specific Questions (2 questions)

Watch a recording of the webinar here:

1. Overview – What Is Changing and When Under the SBTi Corporate Net-Zero Standard

1.1 Q: What are the most important changes in SBTi V2.0?

Seven changes are affecting most companies:

• Company Categories. Companies are divided into Category A and Category B. Category A—large companies and medium-sized companies in high-income countries—meet the full requirements, while Category B has less stringent requirements.
• Scope 1 and Scope 2 are separated. Targets are set and reported separately rather than as a combined target. For Scope 2, there are two approaches: an absolute emissions reduction or an LCE target based on an increased share of low-carbon energy.
• Stricter requirements for Scope 3. For Category A, all Scope 3 categories that individually account for more than 5% of total Scope 3 emissions must be subject to targets, with the exception of those categories that the standard explicitly permits to be excluded. This replaces the previous coverage threshold of 67%.
• Market-based instruments are considered implementation measures, not accounting entries. EACs, PPAs, and similar instruments are reported separately from the physical greenhouse gas inventory and are not offset against it.
• Ongoing Emissions Responsibility (OER). A new, voluntary recognition system for residual emissions during the target cycle, with three levels: Engaged, Advanced, and Leadership. Starting in 2035, carbon sequestration will become mandatory for Category A.
• Five-year cycles replace the five-year review. All targets are now set for a five-year period, which means that the previously mandatory five-year review (M5YR) as a separate step is no longer required. Instead, an assessment is conducted at the end of the cycle, with revalidation taking place no earlier than 24 months before and no later than 12 months after the cycle’s expiration. The M5YR remains as the date that determines when existing V1 goals are to be transferred to V2.0.
• Governance and Review. Targets must be approved at the highest level of governance. Category A is subject to requirements for limited third-party review of the base-year inventory, LCE calculations, and emission-intensive activities, and must publish a transition plan within 15 months of validation.

1.2 Q: What are the biggest risks and pitfalls associated with the new version of the SBTi?

It is impossible to answer this question completely objectively, but we consider these to be the greatest risks and pitfalls:

• Underestimated data maturity. The requirement for third-party auditing for Category A means that supporting documentation, data trails, and internal controls must meet auditing standards. It usually takes longer to build this up than to set the goal itself.
• The 5 percent rule in Scope 3. Many organizations realize too late that categories they were previously able to exclude must now be included in their targets. Furthermore, excluded emissions must be publicly disclosed—both in absolute terms and as a percentage—along with the measures you are taking nonetheless.
• Transition Plan. Category A must publish a transition plan within 15 months of validation. It must be supported by the relevant stakeholders and approved—not merely drafted.
• Board decisions take time. The requirement for approval at the highest level of governance means that the objective must be incorporated into the board’s annual cycle—a process that can rarely be completed in a matter of weeks.
• Market instruments that were previously considered to be in order. Companies that have built their Scope 2 position on guarantees of origin need to review the region of origin, the age of the facility, and time alignment. Requirements are becoming stricter, and availability varies across markets.
• Confusing OER with emissions reductions. Carbon credits under OER are outside the scope of the inventory and must not be communicated as emissions reductions. This is the single greatest communication risk in the new standard.
• Waiting for guidance that is coming late. Several parts will not be published until Q4 2026 and early 2027, respectively. Postponing all work until everything is in place makes the timeframe leading up to February 2027 unreasonably short.

1.3 Q: Can Category B companies be compared to the previous SME standard, or will there continue to be a separate SME standard within the SBTi?

The SME standard is incorporated into CNZS V2.0. Under V2.0, the distinction between SMEs and non-SMEs has been completely replaced by the classification into Categories A and B. Companies that were previously classified as SMEs are, in most cases, placed in Category B under the new framework; thus, Category B is, in practice, the successor to the SME category.

The definition is thus relatively similar, but the requirements differ. V2.0 is the only overarching framework, and the differences between Categories A and B are clearly stated throughout the document where the requirements differ. Although the requirements are not as comprehensive as those for Category A companies, Category B companies will find that the new standard imposes higher requirements than the previous SME standard did. Category B companies may find it easier to navigate the process using the standalone criteria document for Category B that SBTi published alongside V2.0.

1.4 Q: The requirement for a new base year every five years—doesn’t that risk slowing down emissions reductions? We’ve achieved significant reductions in the early years of our SBTi and net-zero goals, and it won’t be possible to maintain a linear rate of reduction all the way to 2050. How does this requirement benefit climate outcomes or resilience?

In fact, the opposite is true. Choosing the most recent reporting year (MRY) as the base year does not imply a reset to zero. The inclusion of a third-party-reviewed assessment at the end of the cycle ensures that the targets reflect current reality and a forward-looking level of ambition.

If progress is insufficient, the targets for the next cycle are set based on a higher emissions baseline, which automatically makes the annual reduction rate steeper. There is no mechanism to reset the clock or smooth out the trajectory.

This closes a long-standing gap in accountability that existed in V1.

2. Transition from Version 1.3.1 to Version 2.0 of the SBTi Corporate Net-Zero Standard

2.1 Q: What does this update mean for us and our existing goals?

Goals that have already been validated remain in effect until your M5YR date or your target year, whichever comes first—provided that you do not need to recalculate your inventory or your goals before then.

If the date falls after 2028, you must use CNZS V2.0. If it falls in 2027, you may choose between V1.3.1 and V2.0.

2.2 Q: We have set 10-year near-term targets. Do we need to make any adjustments before setting new targets in about eight years?

Not immediately. However, a mandatory five-year review (M5YR) will be triggered before your target year, and during that review, you must assess your goals against the standard in effect at that time.

For M5YR targets that fall after February 2028, V2.0 is the only applicable framework. This means you will need to update your targets to meet the V2.0 requirements at that time, even if your original target year is several years in the future.

2.3 Q: We already have validated goals under V1.3. Will V2.0 only affect us when we set new near-term targets in five years?

In short, yes. However, a recalculation of the base year due to structural changes or other valid reasons may trigger a recalibration and update of the targets. If this occurs after 2028 but before the mandatory five-year review (M5YR), your targets will need to be adjusted to V2.0 at that time.

In any case, we strongly recommend conducting a contingency review during the transition period to identify opportunities and risks given the new structure and the higher requirements in the objectives.

2.4 Q: If a company has validated targets in accordance with the current standard and a recalculation exceeds the 5 percent materiality threshold, the targets must be resubmitted in accordance with the latest criteria. How does this work in practice when a new version of the standard is released in the middle of a target period, and are there any transitional provisions for affected companies?

A recalculation of the base year due to significant changes in the greenhouse gas inventory (as defined in the base year recalculation policy) does not automatically trigger an update of the targets. Instead, it triggers a recalibration—the step in which the targets are assessed against the revised inventory and the criteria used in the validation process to determine whether an update to the targets is necessary.

If you update your targets before February 1, 2028, your company can choose between Version 1.0 and Version 2.0 of the standard. After February 1, 2028, Version 2.0 will be mandatory.

Changes to the standard never take effect immediately, and older versions are phased out gradually, giving companies plenty of time to adjust.

2.5 Q: If we have ongoing V1 targets through 2028 and submit under V2.0 in February 2027—does C9.2(b) apply, meaning the next cycle will be 2029–2033, or does C9.2(a) apply, which allows for a shorter bridging target? How does the SBTi specifically handle transitions from V1 to V2? Or can we begin a new target period as early as 2026–2031 if, at the time of submission, we have reported our emissions for 2026?

If you switch to V2.0 before the target year, as in your example, you have the option to choose a shorter period than the prescribed five years for the first target cycle. This is C9.2(a), and it is entirely voluntary. If your company chooses this option, you can set a shorter transition target. Otherwise, C9.2(b) applies.

For all subsequent target cycles, C9.2(b) applies as the standard, which means that the targets must span five years.

2.6 Q: We have validated near-term targets according to V1, with a target year of 2028. When we submit new targets under V2.0 in early 2027—does C9.2(b) apply, meaning the new target period must begin in 2029, or does the main text of C9.2 apply, allowing the period to begin with the most recent reporting period (2026) and resulting in an overlapping target period of 2026–2030?

The same answer as above.

2.7 Q: C33 — Does “at the time of resubmission” mean that the date of submission determines which standard applies, or is it when the validation is completed?

The submission date determines which standard applies. You may submit your work according to V1 in January 2027.

3. Scope 1 and Scope 2 – Electricity, Certificates, and Market Instruments under SBTi v2

3.1 Q: What is the SBTi’s position on Scope 1 certificates, such as those for real estate companies that purchase biogas?

More details regarding the framework for third-party recognition of commodity certificates will be provided in the near future.

Projects and market instruments are valid tools for implementing and monitoring targets, provided they meet the integrity criteria set forth in the standard. They remain valid throughout the entire target cycle, including under any legacy provisions where applicable.

3.2 Q: How do biogas credits work—in a similar way to guarantees of origin for purchased electricity today?

The mechanism is essentially the same. A certificate representing the environmental attributes of the biogas is transferred and canceled to substantiate a claim.

For electricity EACs, there is now an established framework based on “near,” “new,” and “now”: “near” refers to the delivery region, “new” refers to the age of the production facility, and “now” refers to hourly or annual matching. Corresponding criteria for biogas are expected in Q4 2026.

Book-and-claim and mass balance instruments are not categorically excluded, but must meet the integrity criteria and be reported separately from the physical greenhouse gas inventory. A company cannot offset biogas credits against physical Scope 1 emissions—they are reported separately, as a system contribution.

3.3 Q: What will apply to the EAC going forward, and starting when?

EACs are not being eliminated, but their role is changing. Under V2.0, they serve as an execution tool within the implementation hierarchy rather than an accounting mechanism, and they are reported separately from the physical inventory instead of being offset against it.

To be valid, e-EACs (certificates of origin) must meet three criteria:

• Near — delivery region. The certificate must come from a facility that can reasonably deliver to the grid where you consume electricity. Exact guidelines on how to handle regional boundaries will be provided in the interpretation guidelines for electricity in Q4 2026.
• New — age of the facility. The production facility must have been commissioned or undergone a major renovation within 15 years prior to the period during which the electricity is consumed.
• Now — time-of-use matching. Certificates must match consumption over time, based on a 12-month vintage match. For activity pools of 10 GWh per year or more, there is an additional requirement to calculate and report the hourly matching rate (mandatory for Category A, voluntary for Category B).

The requirements will take effect when V2.0 opens for validation on February 1, 2027. Long-term market instruments such as PPAs, VPPAs, and multi-year certificate agreements signed before that date are covered by so-called “legacy protection” for the remainder of the agreement’s term. Short-term and ongoing spot purchases of unallocated EACs are not covered by this provision. Detailed guidance for electricity is expected in Q4 2026, and corresponding criteria for other commodity certificates during the same period.

A noteworthy update: Version 2.0 explicitly allows the same tools used for Scope 2 to also be used for electricity in the value chain—that is, electricity that falls under Scope 3, such as in purchased goods and services or in the use of sold products. Both independent EACs and (virtual) PPAs are approved instruments. Where you know where the electricity is consumed, the matching must take place within the same supply region. Where the location is unknown, the activity pool may be defined more broadly, for example, nationally or regionally.

3.4 Q: How does V2.0 address district heating in the options for targets and monitoring specified for Scope 2?

Under V2.0, the ambition level for Scope 2 is anchored in the physical inventory, while market-based instruments are used as implementation tools and reported separately.

Whether certificates for low-emission district heating (such as from waste heat or renewable sources) will qualify as approved market instruments under the implementation hierarchy depends on the upcoming guidance on commodity certificates and on the framework for third-party verification. Both are expected in Q4 2026.

We will provide further details on the exact procedure once the SBTi has published its guidance. Until then, it should be safe to purchase market-based instruments, as long as they meet the integrity criteria.

3.5 Q: The Scope 2 emissions target appears to be based on a location-based approach, which affects many companies because RECs and guarantees of origin can no longer be credited. What is your view on this, and on setting only an LCE target?

A clarification is needed here. Companies with a projected annual increase in electricity consumption of more than 20% must use the absolute emissions reduction method. For all others, there are still two options for Scope 2 targets under V2.0: absolute emissions reduction, based on the physical location-based inventory, and an LCE alignment target based on an increased share of low-carbon electricity.

Companies that opt for absolute reduction may still use RECs, PPAs, and other qualifying market instruments as mitigation measures within the implementation hierarchy. The difference is that these are reported separately from the physical inventory rather than being offset against it.

RECs and guarantees of origin will not disappear, then. They will shift from being an accounting mechanism to being an implementation mechanism—a difference that is both significant and easy to overlook.

3.6 Q: Is it necessary to categorize and separate the various actions taken within an activity, activity pool, and sector in reporting to the SBTi?

Yes, and this is one of the more business-critical changes to reporting in V2.0.

The standard clearly states that measures and their results must be reported based on the level in the implementation hierarchy to which they belong, and that measures at the activity pool and sector levels must be reported separately from the physical greenhouse gas inventory. They must not be offset against it. Measures at the activity level that reduce the physical inventory support claims of emission reductions. Measures at the activity pool and sector levels that are not reflected in the physical inventory support only claims regarding system contributions.

Mixing these together in reporting would allow a company to overstate its direct emissions reductions—which is exactly what the separation requirement is designed to prevent.

4. Scope 3 and the Value Chain within the SBTi

4.1 Q: New requirements for the value chain—what do they mean?

For Category A companies, all Scope 3 categories that individually account for more than 5% of total Scope 3 emissions must be subject to targets. This is a higher threshold than the previous coverage threshold of 67%.

In addition, emissions-intensive activities (EIA) in the value chain must be identified during target validation and disclosed publicly in the subsequent reporting cycle. Companies must also actively engage with suppliers and customers as part of their implementation efforts.

The supplier alignment target (formerly known as the engagement target) carries over into V2.0 as a valid option for Scope 3 targets, so existing engagement targets can be mapped over.

In the long term, for category-specific emissions, the parties in the value chain will need to achieve residual levels themselves—not merely set scientific climate targets—in order for long-term alignment goals to be achieved.

4.2 Q: Is there a definition for the change in the Scope 3 requirement from 67% to “emissions-intensive”?

There is no general coverage percentage for Scope 3 in V2.0. Instead, Category A companies are only required to include material Scope 3 categories and emission-intensive activities (EIA). These are defined as categories that account for 5% or more of total Scope 3 emissions.

Based on SBTi’s research and analysis, this generally corresponds to 80–85% coverage of Scope 3, which is higher than the current standard’s threshold of 67%.

4.3 Q: What specific frameworks and standards, in addition to the SBTi’s own, are accepted as “recognized science-based standards” for a supplier to be classified as “in transition”?

The SBTi is developing an Interoperability and Recognition Framework and is expected to begin publishing guidance starting in Q4 2026. The framework will establish criteria and processes for recognizing third-party tools and certification frameworks across several categories, including technical tools, electricity certificates, commodity certificates, and carbon credits. It is not yet clear whether and how the framework will address the recognition of science-based standards at the supplier level.

Based on the general direction of the standard, we can say that, in order to be considered “in transition,” a supplier must demonstrate progress toward a science-based target—and that the SBTi’s own validated targets are the clearest path to achieving this. Whether targets validated under other frameworks will be formally recognized as equivalent is precisely the type of question the interoperability framework is intended to answer.

4.4 Q: We have an engagement goal for suppliers through 2028. How do we handle this when we transition to V2.0 in 2027—can the goal be easily carried over?

Yes, the concept carries over. The “supplier alignment target” in V2.0 is the same concept as the previous “supplier engagement target”: a goal to increase the proportion of Tier 1 suppliers—measured by emissions or purchase value—that are in the process of transitioning or are net-zero compliant. Your existing target can be mapped to the V2.0 methodology.

The most important difference is that the long-term alignment targets in V2.0 require suppliers to have actually achieved residual levels, not merely to have set a scientific climate target. The ultimate ambition is therefore higher for long-term targets set in a new cycle.

4.5 Q: When we transition from our V1 engagement goal for 2028 to V2.0—can we immediately set a new alignment goal in accordance with C15.2, or do we need to report the outcome of the previous engagement goal as a prerequisite for the new one?

Supplier alignment targets provide continuity for companies that had a supplier engagement target during V1. Since all targets a company sets must be forward-looking in their ambition, you are required to report the results against the previous target as part of your reporting.

Two upcoming resources—“Methods, Metrics, and Pathways” and “SBTi Assurance Framework”—which are expected to be published starting in Q4 2026, will provide greater clarity on the specific technical details.

4.6 Q: We have set an engagement goal for suppliers through 2028. What is the natural next step for us? We have actual emissions data from only some of our suppliers, and the quality of that data is limited, which makes it difficult to set a quantitative goal.

The same answer as above.

4.7 Q: We are to submit both short-term and long-term goals in accordance with V2.0 in February 2027. We can exclude commuting from the short-term goals, but not from the long-term ones. How should we approach an area where we have limited control but still need to set goals?

See the answer below.

4.8 Q: If we exclude commuting from our short-term goal, how should it be addressed in the long term?

Whether a category is included in the scope of the short-term target depends on materiality. If your company excludes commuting from the five-year target, this should mean that the category accounts for less than 5% of total Scope 3 emissions. However, Scope 3 categories that account for 5% or more of emissions are reassessed for each new base year during each target validation. It may very well be the case that as emissions decrease in today’s dominant categories, the share of other categories rises above the 5 percent threshold, and they must then be included in the scope of the short-term target for the next target cycle. Important to note: if a category’s share rises above the 5 percent threshold midway through the cycle, as a result of reductions in other categories, this does not mean that the category must be added to the short-term target midway through the cycle.

Long-term targets are voluntary for Scope 3, but if your company chooses to set them anyway, they must cover all Scope 3 emissions. The exceptions available for short-term targets do not apply to long-term targets.

5. Carbon credits, OER, and carbon offsetting

5.1 Q: How do Scope 3 and carbon credits relate to each other in V2.0?

Carbon credits cannot be counted toward Scope 3 targets. Emissions reductions in the value chain must be achieved through actual measures, and credits are excluded from the greenhouse gas inventory.

In V2.0, for the covered Scope 3 emissions, SBTi grants recognition under Ongoing Emissions Responsibility (OER). OER covers remaining Scope 1, 2, and 3 emissions during the target cycle and has three levels:

• Engaged: equivalent to at least 1% of current Scope 1–3 emissions.
• Advanced: 100% of Scope 1–2 plus enough of Scope 3 to reach at least 10% of total Scope 1–3, with a price anchor of 20 USD per metric ton.
• Leadership: For Category A: 100% of Scope 1–3, with a price anchor of 80 USD per metric ton. For Category B: 100% of Scope 1–2 plus Scope 3 up to at least 10% of the total, at the same price level.

Starting in 2035, Category A entities will be required to offset at least 1% of their Scope 1–3 emissions through carbon sequestration, a percentage that will increase linearly to 100% by the net-zero year. For long-lived greenhouse gases, at least 10% of that portion must be offset through long-term sequestration, which will also increase to 100%.

It is important to distinguish between two things: credits purchased under the OER are reported separately from the inventory and must not be presented as emission reductions. Furthermore, the same credits cannot be double-counted toward both OER recognition and the mandatory removals requirement after 2035.

In practice, this means th carbon offsetting s outside the value chain are given a clearly defined role in the standard.

5.2 Q: How should one communicate about climate actions outside one’s own value chain—that is, the purchase of credits that are not counted toward the targets?

At zeromission.se/resurser, we share a separate resource document—available for free download—that specifically addresses how companies can communicate their use of carbon credits.

Credits purchased under the OER are completely outside the scope of the physical greenhouse gas inventory and cannot be used to claim emission reductions toward Scope 1, 2, or 3 targets.

What a company can claim is recognition at the relevant OER level (Engaged, Advanced, or Leadership) once the SBTi has confirmed this at the end of the target cycle.

The SBTi Claims Policy is a separate resource, still under development, with publication planned for early 2027. It will define exactly how this may be communicated externally.

5.3 Q: Does the OER requirement, which will become mandatory in 2035, mean that we must take formal responsibility for Category 7 (commuting), even though it is excluded from our short-term goals?

Yes. Reported emissions from all Scope 3 sources will be included in the calculation of the mandatory target, even if a category is not included in the near-term target.

Watch a recording of the webinar here:

6. Governance, Reporting, and Links to Other Regulations

6.1 Q: Who is responsible for reporting?

The question leaves room for interpretation, but provides an opportunity to highlight internal governance.

As a general principle, CNZS V2.0 requires that objectives be approved and monitored at the highest level of governance (board of directors or equivalent), with supporting governance structures in place to ensure their implementation.

Responsibility for annual reporting and for the assessment at the end of the target cycle should therefore rest with senior management, with operational input from the sustainability and finance functions.

6.2 Q: What are the connections between SBTi V2.0 and ESRS?

There is no direct connection or interoperability between CNZS V2.0 and ESRS.

The SBTi does not require compliance with the ESRS. However, compliance with the ESRS can fulfill parts of the SBTi’s transition plan requirements, provided the right components are included.

6.3 Q: How well does the SBTi’s new guidance align with the updates in the new GHG Protocol guidance?

CNZS V2.0 has been developed in close coordination with the GHG Protocol, particularly in two areas: time-matching of Scope 2 emissions and the use of market instruments. The standard includes provisions specifically intended to align with the upcoming GHG Protocol guidance, “Actions and Market Instruments (AMI),” particularly regarding the reporting of market instruments and project-based measures separately from the physical inventory.

However, the SBTi makes no assumptions about the outcome of the GHG Protocol’s revision process. None of the standard’s criteria should be interpreted as an indication of, or an assumption regarding, where the GHG Protocol’s guidance will ultimately land. Any targeted changes to reporting aspects in CNZS V2.0 will be considered only after the GHG Protocol’s revision is complete.

6.4 Q: Is the high-level review conducted as part of the sustainability report accepted as fulfilling the assurance requirements of V2.0? And which auditors are approved as SBTi-recognized validation bodies for the assurance process?

Category A companies must ensure an audit—at a minimum at the “limited assurance” (limited assurance)—which covers Scope 1, Scope 2, and Scope 3 emissions for the target’s base year, calculations of low-carbon emissions, emissions from material emission-intensive activities, and other metrics used in setting the target.

The SBTi has not yet decided whether to maintain a “registered list” of verification providers. Instead, the SBTi will develop criteria and processes for recognizing third-party frameworks, standards, and programs, where applicable. Where no recognized framework is available, the SBTi’s Assurance Framework will define the scope of the assurance work to be performed by the third-party assurance provider.

7. Getting Started and Industry-Specific Questions

7.1 Q: Any tips on how to handle the process when a company is setting science-based climate goals for the first time—how do you sell the idea internally?

Version 2.0 explicitly requires that the goals be approved at the board level, which means that senior management still needs to be present. Frame the initial discussion around risk management and strategic positioning—transition risks and demands from customers and procurement agencies are terms that boards respond to.

Practical arguments for internal buy-in:

• SBTi validation is increasingly becoming a basic expectation of investors, procurement partners, and regulators—not a differentiator.
• V2.0 is a "best effort" framework, not a pass/fail exercise. Companies are not expected to have all the answers on day one, but rather to present a credible plan and improve over time.
• The five-year cycle breaks the commitment down into manageable parts, rather than a single, irrevocable promise that extends until 2050.
• Starting now, before February 2027, still allows for validation under V1.3.1, which has less stringent requirements for review and reporting of the transition plan. This is a useful intermediate step for companies that are not yet ready to meet the full requirements of V2.0.

For the CFO specifically, the internal carbon pricing mechanism under OER is a useful starting point. It translates the emissions profile into a financial figure, making the investment calculation for emissions reductions concrete and comparable to other capital allocation decisions.

The honest truth is that the process is more demanding in V2.0 than it was before. Starting data collection early and getting the governance in place is the single most important thing a first-time company can do.

7.2 Q: How does the update affect the real estate sector more specifically?

Companies that wish to set goals in accordance with the new standard can no longer follow industry guidelines and standards published prior to CNZS V2.0.

All industry guidance and industry standards will be revised to be compatible with CNZS V2.0. Once the applicable industry-specific guidance or standard is published, it may, in some cases, take precedence over CNZS V2.0—in which case, this will be specified in the documentation.