The SBTi published its Corporate Net-Zero Standard V2.0 on 11 June 2026 — the most significant overhaul since the original standard. At the same time, the FCA’s final rules on UK sustainability disclosures (PS26/19) bring transition plan disclosure requirements into force from 1 January 2027. Here is what both mean for your organisation.
SBTi V2.0: Key Changes
V2.0 replaces V1 with material changes across Scope 3, carbon credits, and transition planning:
Scope 3: Materiality-Based Thresholds
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 more than 5% of their total Scope 3 footprint. The menu of methods has expanded beyond supplier engagement to include emissions intensity benchmarks and circularity targets.
Carbon Credits: Still Cannot Count Toward Targets
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. Beyond Value Chain Mitigation (BVCM) has been replaced by Ongoing Emissions Responsibility (OER), a voluntary recognition programme with three levels. From 2035, Category A companies must support carbon removals equal to at least 1% of ongoing emissions, rising to 100% by their net-zero target year.
FLAG Sector
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.
Transition Plans for Category A
Category A companies (generally the largest emitters) must submit a transition plan within 15 months of target validation. This is a new V2 requirement with no V1 equivalent.
SBTi V2 Timeline
- 11 June 2026: V2.0 published
- 1 February 2027: V2 validation opens
- 31 January 2028: V1.3.1 validations close
- 1 February 2028: V2 mandatory for all new target submissions
- 2035: Category A carbon removal obligations begin
Third-Party Verification
Category A: Minimum limited assurance of base-year emissions (Scope 1, 2, 3), low-carbon electricity calculations, and significant emissions-intensive activities is required.
Category B: Assurance is recommended but not mandatory.
UK Transition Plan Taskforce (TPT) Framework
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 and targets.
FCA PS26/19: Disclose-or-Explain, Not Mandatory
The FCA’s final rules (PS26/19, published 30 September 2026, in force from 1 January 2027) require UK-listed issuers to report against UK SRS S1 and S2 on a comply-or-explain basis. On transition plans specifically:
- Companies must 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
- However, market expectations from investors, lenders, and insurers are making disclosure a practical necessity
What Should You Do Now?
- Assess your SBTi category (A or B) — this determines which V2 requirements apply
- Screen Scope 3 categories against the 5% materiality threshold to identify where dedicated targets are needed
- Begin gap analysis between your current V1 targets and V2 requirements
- Build your transition plan aligned with both the TPT Disclosure Framework and SBTi’s 15-month requirement
- Engage RSustain for SBTi V2 target setting and TPT-aligned transition plan development
RSustain Advisory
RSustain’s combined SBTi V2 and Transition Plan service covers GHG baseline, Scope 3 materiality screening, target development, and TPT-aligned transition plan drafting. Book a free scoping call.
RSustain UK provides advisory services only.