SBTi V2.0 Is Final: What Changed, What It Means for Your Targets, and How to Revalidate

Key Takeaways

• The Science Based Targets initiative published its final Corporate Net-Zero Standard V2.0 in June 2026, the most significant revision since the standard was launched
• Scope 3 requirements are restructured around a relevance-based approach: companies must set targets for categories representing at least 95% of total Scope 3 emissions, with a 5% category-level de minimis threshold
• Alignment-based targets offer flexibility alongside absolute reduction targets for Scope 3 categories where activity-level data is available
• Beyond Value Chain Mitigation (BVCM) has been replaced by Ongoing Emissions Responsibility (OER), with clearer rules on carbon credit use
• Companies with existing validated SBTi targets must revalidate under V2.0 within the transition window — typically 24 months from publication

What Changed in V2.0

V2.0 represents a fundamental restructuring of how companies set and pursue science-based net zero targets. The key changes are:

1. Scope 3 Target Boundaries

Under V1.0, companies had to set Scope 3 targets if Scope 3 represented more than 40% of total emissions. V2.0 replaces this with a relevance-based approach:

• Companies must cover at least 95% of their total Scope 3 emissions in their target boundary
• Individual categories below 5% of total Scope 3 can be excluded (de minimis threshold)
• This is more flexible for companies with highly diversified supply chains but maintains comprehensive coverage for the most material categories

2. Target-Setting Approaches

V2.0 introduces alignment-based targets alongside traditional absolute and intensity targets:

• Absolute targets: Reduce total Scope 3 emissions by X% by year Y (unchanged from V1.0)
• Intensity targets: Reduce emissions per unit of output/revenue by X% by year Y (unchanged)
• Alignment-based targets (new): Demonstrate that each relevant Scope 3 category is on a pathway consistent with 1.5°C, using sector-specific decarbonisation pathways. This is particularly useful for Category 1 (purchased goods) where companies can demonstrate supplier engagement and procurement shifting rather than absolute reduction

3. Ongoing Emissions Responsibility

V2.0 replaces BVCM with Ongoing Emissions Responsibility (OER). The key differences:

• OER applies to residual emissions that cannot be eliminated (the 5–10% remaining after maximum abatement)
• Companies must invest in carbon removal credits (not just any carbon credit) to neutralise residual emissions
• The investment must be proportional: companies should match their residual emissions with equivalent removal volumes
• The quality criteria for eligible removals are aligned with ICVCM Core Carbon Principles

4. FLAG Sector Integration

V2.0 fully integrates the Forest, Land, and Agriculture (FLAG) guidance, requiring companies in land-intensive sectors to set separate FLAG targets covering land-related emissions and removals. This is aligned with the GHG Protocol Land Sector and Removals (LSR) Standard published in June 2026.

V1.0 vs V2.0: Key Differences at a Glance

The following table summarises the most significant changes between the two standard versions. Companies planning revalidation should use this as a starting checklist to identify where their existing targets need revision.

Practical Example: How Alignment-Based Targets Work

Alignment-based targets are the most significant conceptual addition in V2.0. They acknowledge that for certain Scope 3 categories — particularly Category 1 (purchased goods and services) — companies may not have direct control over the absolute emissions of their suppliers. Instead, alignment-based targets allow a company to demonstrate that its value chain is on a trajectory consistent with a 1.5°C pathway.

Worked example: a UK general merchandise retailer.

Consider a UK retailer with £3 billion annual revenue. Its Scope 3 Category 1 (purchased goods and services) represents 80% of its total Scope 3 footprint, at approximately 2.5 million tCO₂e. Under V1.0, the retailer would need an absolute or intensity target to reduce this figure by a specified percentage by a given year — a commitment that depends on actions taken by hundreds of suppliers across multiple countries and product categories.

Under V2.0, the retailer can set an alignment-based target for Category 1. The approach works as follows:

• Step 1 — Identify the relevant sector pathway: The retailer references the SBTi sector pathway for consumer goods, which specifies a required emissions intensity reduction of approximately 5% per year consistent with 1.5°C
• Step 2 — Segment the supply base: The retailer categorises its suppliers by sector and geography, identifying which suppliers fall within each sector pathway
• Step 3 — Assess supplier alignment: The retailer evaluates whether each supplier (or supplier category) is on a trajectory consistent with the relevant sector pathway. Evidence includes: supplier-level SBTi commitments, CDP disclosures, verified emissions intensity data, and documented decarbonisation plans
• Step 4 — Set the alignment target: The retailer commits that, by 2030, 75% of its Category 1 emissions (by spend or volume) will come from suppliers that are demonstrably aligned with 1.5°C sector pathways. By 2035, this rises to 90%
• Step 5 — Demonstrate progress: Each year, the retailer reports the proportion of its procurement that meets the alignment criteria, showing year-on-year improvement

This approach has several practical advantages. It shifts the focus from aggregate emissions accounting (which depends on estimation methodologies and can be imprecise for complex supply chains) to verifiable supplier-level actions. It also creates a direct commercial incentive: suppliers that can demonstrate alignment with 1.5°C pathways gain a competitive advantage in procurement decisions.

However, alignment-based targets are not a soft option. SBTi requires that the sector pathways used are credible, that the assessment methodology is transparent, and that progress is independently verified during the revalidation cycle. Companies cannot simply relabel existing supplier engagement programmes as “alignment targets” without the underlying analytical rigour.

Revalidation Requirements

Companies with existing validated SBTi targets under V1.0 must revalidate under V2.0. The transition provisions include:

• 24-month transition window: Companies have 24 months from V2.0 publication (i.e., until June 2028) to submit revalidation
• Committed companies: Companies that have committed but not yet validated targets must validate under V2.0
• Automatic review: SBTi will conduct automated assessments to identify targets that are most likely to require material revision under V2.0
• No re-submission fee: The revalidation process does not carry an additional fee for existing target holders

The main areas where revalidation will require target adjustments are: Scope 3 boundary (95% coverage requirement may bring additional categories into scope), FLAG sector integration (for applicable companies), and near-term target ambition (V2.0 maintains the requirement for near-term targets consistent with 1.5°C pathways).

Interaction with UK SRS

SBTi targets and UK SRS requirements are complementary but distinct:

• UK SRS requires disclosure of climate targets but does not mandate SBTi-validated targets
• However, investors and rating agencies increasingly view SBTi validation as the benchmark for credible target-setting
• UK SRS transition plans (TPT-aligned) should reference SBTi targets where they exist, demonstrating the scientific basis of the company’s trajectory
• Scope 3 data collected for SBTi V2.0 compliance can be directly used in UK SRS S2 disclosures

What You Should Do Now

• Download and review V2.0 against your current SBTi target submission
• Assess your Scope 3 boundary under the 95%/5% relevance threshold — do any new categories need to be included?
• Evaluate alignment-based targets for Scope 3 categories where you have supplier-level data — this may offer more practical pathways than absolute targets
• Review your carbon credit strategy — OER requires removal credits, not avoidance credits. Assess your current portfolio and pipeline
• Plan your revalidation timeline — the 24-month window sounds generous, but the validation queue will lengthen as the deadline approaches
• Align with UK SRS — build one data system that serves both SBTi revalidation and UK SRS S2 disclosure

Need Help with SBTi V2.0 Revalidation?

Our net zero advisory team helps companies navigate SBTi V2.0 revalidation, restructure Scope 3 target boundaries, and align science-based targets with UK SRS transition plan requirements.

Explore Our Capabilities
Book a Free Call