Net Zero Target Setting & Transition Planning

SBTi V2 Target Setting & TPT Transition Plans

The Science Based Targets initiative published its Corporate Net-Zero Standard V2.0 on 11 June 2026. It replaces V1, introduces materiality-based Scope 3 thresholds, and makes transition plans mandatory for Category A companies. Validation opens early 2027; V2 becomes mandatory for all new submissions from 1 February 2028.

In the UK, the Transition Plan Taskforce (TPT) Disclosure Framework sets the benchmark for credible transition plans. UK transition plan disclosures operate on a disclose-or-explain basis — not mandatory, but increasingly expected by investors, lenders, and regulators. RSustain helps organisations set validated science-based targets and build transition plans that satisfy both SBTi V2 and TPT requirements.

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What Changed in SBTi V2.0

V2.0 is a significant overhaul of the Corporate Net-Zero Standard. The key changes affect Scope 3 target-setting, carbon credit treatment, and transition planning requirements.

Scope 3 Materiality Threshold

V1 required targets covering at least 67% of total Scope 3 emissions. V2 replaces this with a materiality threshold: Category A companies must set targets for every Scope 3 category representing >5% of their total Scope 3 footprint. Methods expanded beyond supplier engagement to include emissions intensity benchmarks and circularity targets.

Carbon Credits & OER

Carbon credits still cannot count toward Scope 1, 2, or 3 reduction targets — progress is measured on a company’s own emissions inventory. Beyond Value Chain Mitigation (BVCM) is replaced by Ongoing Emissions Responsibility (OER), a voluntary recognition programme with three levels.

FLAG Sector Requirements

Food companies are classified as Forest, Land and Agriculture (FLAG) sector by default under V2. FLAG emissions must be reported separately with dedicated FLAG targets — these cannot be aggregated with energy/industrial emissions.

Transition Plan Requirement

Category A companies must submit a transition plan within 15 months of target validation. From 2035, Category A companies must also support carbon removals equal to at least 1% of ongoing emissions, rising to 100% by their net-zero target year.

SBTi V2 Timeline

11 June 2026	V2.0 Corporate Net-Zero Standard published
1 February 2027	V2 validation opens — companies can submit targets under the new standard
31 January 2028	V1.3.1 validations close — final date for V1 target submissions
1 February 2028	V2 mandatory for all new target submissions (V1 no longer accepted)
2035	Category A carbon removal obligations begin (≥1% of ongoing emissions)

UK Transition Plan Taskforce (TPT)

The TPT Disclosure Framework provides the UK benchmark for credible climate transition plans. The Taskforce was wound up in October 2024, handing its materials to the IFRS Foundation for global maintenance. The framework covers governance, implementation strategy, engagement strategy, and metrics & targets — with sector-specific guidance for financial institutions, asset managers, and real economy companies.

UK transition plan disclosure operates on a disclose-or-explain basis. The FCA’s final rules (PS26/19, published 30 September 2026, in force from 1 January 2027) require listed issuers to state whether they have published a transition plan and where to find it, or explain why they have not. The FCA explicitly states it is not requiring companies to produce transition plans — but market expectations are moving rapidly. Investors, banks, and insurers increasingly require transition plan disclosures as a condition of capital allocation.

How RSustain Supports SBTi & Transition Planning

GHG Baseline & Scope 3 Inventory

Robust Scope 1, 2, and 3 emissions inventory using GHG Protocol methodology. Materiality screening of Scope 3 categories to identify which require dedicated targets under V2’s >5% threshold.

SBTi Target Development

Near-term and net-zero target development aligned with SBTi V2 requirements. Pathway modelling, reduction lever analysis, and preparation of the target submission package for SBTi validation.

TPT-Aligned Transition Plan

Drafting of a credible transition plan aligned with the TPT Disclosure Framework. Covers governance, implementation strategy, engagement strategy, and metrics. Designed to satisfy both SBTi’s 15-month transition plan requirement and UK disclosure expectations.

Ongoing Target Tracking

Annual emissions recalculation, target progress tracking, and transition plan updates. Integration with SECR, UK SRS, and CSRD reporting where applicable.

Related Services & Resources

Frequently Asked Questions

What is SBTi V2?+

The SBTi Corporate Net-Zero Standard V2.0, published 11 June 2026, is the updated framework for setting science-based climate targets. It replaces V1 with materiality-based Scope 3 thresholds, mandatory transition plans for Category A companies, and a new Ongoing Emissions Responsibility (OER) framework replacing BVCM.

Can carbon credits count toward SBTi targets?+

No. Under both V1 and V2, carbon credits cannot be used to meet Scope 1, 2, or 3 reduction targets. Progress is measured solely on a company’s own emissions inventory. Credits are recognised separately through the voluntary OER programme.

Are UK transition plans mandatory?+

No. The FCA’s final rules (PS26/19, in force from 1 January 2027) require listed issuers to state whether they have a transition plan and where to find it, or explain why they do not. The FCA explicitly states it is not requiring companies to produce transition plans. However, market expectations from investors, lenders, and insurers are making disclosure a practical necessity for capital access.

What is the TPT Disclosure Framework?+

The Transition Plan Taskforce (TPT) Disclosure Framework is the UK’s recommended standard for climate transition plans. It covers governance, implementation strategy, engagement strategy, and metrics & targets, with sector-specific guidance. The TPT was wound up in October 2024, handing its materials to the IFRS Foundation for global maintenance. The framework remains the reference benchmark for UK transition plan disclosures.

What is a Category A company under SBTi V2?+

SBTi V2 categorises companies based on size and emissions profile. Category A companies (generally the largest emitters) face the most stringent requirements: targets for all Scope 3 categories above 5%, a mandatory transition plan within 15 months of validation, and carbon removal obligations starting in 2035.

When do I need to switch from SBTi V1 to V2?+

V2 validation opens on 1 February 2027, with V1.3.1 validations closing on 31 January 2028. From 1 February 2028, all new target submissions must use V2 — V1 will no longer be accepted. Companies with existing validated V1 targets should begin gap analysis now to understand what changes are needed for V2 alignment.

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