SBTi vs Net-Zero: What’s the Difference, and What Should Companies Aim For?

At a Glance

• Science-based targets (SBTi) define a credible, near-term emissions reduction pathway aligned with climate science.
• “Net-zero” describes a long-term end state, not a method.
• Companies do not need SBTi to claim net-zero, but SBTi-backed pathways are increasingly seen as best practice.
• The strongest climate strategies treat SBTi and net-zero as connected, not competing.

Introduction

Companies across Europe are asking the same question.
Should we commit to SBTi, declare net-zero, or do both?

The confusion is understandable. Climate targets have multiplied, terminology is used loosely, and expectations from investors, customers, and regulators keep rising. At the same time, vague “net-zero by 2050” pledges are increasingly challenged, while science-based targets are gaining traction as a marker of credibility. This shift is being accelerated by EU regulatory frameworks, such as the Corporate Sustainability Reporting Directive (CSRD) and EU Taxonomy, which are creating new expectations for climate transition planning and disclosure.

This article explains the difference between SBTi and net-zero, their relationship to each other, and what companies should realistically aim for if they want climate targets that withstand scrutiny and drive real change.

What are science-based targets (SBTi)?

The Science-Based Targets initiative is a voluntary global framework that helps companies set greenhouse gas reduction Science-based targets are emissions reduction targets that align with the level of decarbonization required to limit global warming to 1.5°C. They are validated by the Science Based Targets initiative (SBTi), a collaboration between CDP, the UN Global Compact, WRI, and WWF.

In practice, SBTi focuses on the pathway instead of a destination.

Key elements include:

• Near-term targets typically cover a 5–10 year period.
• Alignment with climate science rather than internal ambition alone.
• Coverage of scope 1, 2, and 3 emissions, with scope 3 often representing the largest share for EU companies.
• Independent validation against clear criteria.

SBTi is not about making claims. It is about committing to measurable emissions reductions that can be tracked, assessed, and challenged. That is why science-based targets are increasingly used as a signal of credibility, especially by investors and large customers.

Many large European companies use SBTi to lock in near-term emissions reductions first, before translating those targets into longer-term transition plans.

Validation costs range from €1,000 for SMEs to approximately €18,000 for large corporations, with the process taking 30–60 business days once submitted. However, companies typically need 18–24 months of preparation before submission, including emissions inventory development, scope 3 data collection, and target modeling.

What does “net-zero” mean?

Net-zero refers to a state where a company’s greenhouse gas emissions are reduced as much as possible, and any remaining emissions are balanced by removals.

It is important to be clear about one thing: net-zero is an outcome.

In practice, net-zero can mean very different things:

• A public pledge such as “net-zero by 2050.”
• A corporate net-zero strategy with varying levels of detail.
• Alignment with the SBTi Net-Zero Standard, which defines what credible net-zero looks like.

Without a defined pathway, net-zero risks become an empty promise. This is where many organizations struggle. They declare a long-term goal without clarity on how emissions will actually decline over time, particularly across scope 3 emissions.

A useful example is Unilever. The company has a long-term net-zero ambition, but it does not rely on the headline target alone. Unilever has combined its net-zero goal with defined near-term emissions reduction targets and detailed transition planning across its operations and value chain. This approach highlights an important distinction: the net-zero outcome is supported by interim targets, governance, and delivery mechanisms, rather than standing on its own as a future promise.

Why SBTi and Net-Zero Are Often Confused

Climate ambition is no longer a niche sustainability topic. It now features in boardroom discussions, investor briefings, and procurement decisions. As EU climate goals tighten and scrutiny increases, companies are under pressure to explain not just whether they are reducing emissions, but how.

That pressure has exposed a common source of confusion. Many organizations use SBTi and net-zero as if they mean the same thing. In reality, they answer different questions. Science-based targets define a near-term, science-aligned pathway for reducing emissions, while net-zero describes a long-term end state. Treating them as interchangeable often leads to unclear commitments and weak credibility.

Understanding this distinction is essential. It allows companies to structure climate targets that are both realistic in the short term and meaningful in the long term.

SBTi vs net-zero: the core differences

This is where the distinction matters most.

Seen this way, SBTi and net-zero are not alternatives. They answer different questions. SBTi inquires about the rate and magnitude of emissions reductions required in the near term. Net-zero asks where the company ultimately wants to end up.

Do companies need SBTi to claim net-zero?

The short answer is no. The longer answer is that it depends on how much credibility matters to your company.

There is currently no legal requirement forcing companies to use SBTi in order to declare net-zero. However, the reputational landscape has shifted. Investors, NGOs, and large corporate customers increasingly look for:

• Clear emissions reduction pathways.
• Transparency on scope 3 emissions.
• Limited reliance on offsets.
• Evidence that targets are science-aligned.

In this context, science-based targets are often viewed as proof that a net-zero claim is grounded in reality, rather than marketing. Especially in the EU, where expectations around climate transition planning and sustainability disclosure requirements continue to evolve, unsupported net-zero statements face heightened scrutiny from regulators, auditors, and investors.

How SBTi and net-zero work together in practice

The most robust climate strategies treat SBTi and net-zero as two parts of the same system.

• SBTi near-term targets provide the foundation. They define what needs to happen now and in the next decade.
• Net-zero provides the destination. It sets the long-term direction.
• Climate transition plans connect the two, translating targets into operational and financial decisions.

Companies that separate these elements often struggle. Near-term targets without a long-term vision can feel tactical. Net-zero without science-based milestones remains abstract. Integration is what turns ambition into action.

Which approach makes sense for different companies?

There is no single right answer. The appropriate approach depends on size, sector, and emissions profile.

• Large multinationals
  Often expected to commit to SBTi and articulate a credible net-zero strategy, particularly if they have significant scope 3 emissions.
  
  
• Mid-sized EU companies
  Increasingly pressured by customers and financiers to show science-aligned targets, even if net-zero commitments come later.
  
  
• SMEs
  May start with simplified SBTi routes or sectoral pathways, focusing first on material emissions sources.
  
  
• Companies with high scope 3 exposures
  Benefit most from SBTi, as it forces engagement with suppliers and value chain partners.

The key is proportionality. Climate targets should stretch the organization but remain grounded in operational reality.

Common pitfalls

Several patterns appear again and again:

• Announcing net-zero without a clear reduction pathway.
• Treating SBTi as a branding exercise rather than a management tool.
• Underestimating the complexity of scope 3 emissions.
• Relying too heavily on offsets instead of reductions.
• Confusing ambition with feasibility.

None of these are signs of bad intent. They are symptoms of unclear framing and sequencing. When ambition moves faster than structure, organizations are forced to adjust mid-course. Getting the structure right early creates clarity, sets realistic expectations, and helps avoid costly course corrections later on.

Conclusion

SBTi and net-zero are not competing concepts. They answer different questions and serve different roles within a climate strategy.

The real challenge for companies is not choosing one label over another. It is deciding how ambition, science, and execution fit together. Credible climate targets are those that:

• Start with measurable reductions.
• Address scope 1, 2, and 3 emissions.
• Are backed by transition planning.
• Evolve as data and capabilities improve.

Climate targets only matter if they change how decisions are made.

If your organization is defining climate targets and weighing SBTi vs. net-zero, The Overview Effect helps companies translate ambition into credible pathways.

Frequently Asked Questions