Updated August 2026
At a Glance
- What SBTi is: A voluntary global initiative that validates whether corporate climate targets align with climate science.
- What it does well: Creates credibility, standardisation, and ambition around emissions reduction targets.
- What it does not do: Assess plans, budgets, governance, resourcing, or delivery capability.
- Who benefits most: Companies seeking external credibility and internal momentum for climate targets.
- What to pair it with: A climate transition plan, budget and capex alignment, clear ownership, and robust GHG inventory
What is SBTi, and is it worth doing? For many EU and Dutch companies, that is no longer a theoretical question. Investors, customers, lenders, and procurement teams are scrutinising climate targets more closely than before, which means a science-based target can carry real commercial weight.
The short answer is that SBTi helps companies validate the ambition and methodology behind their emissions targets. Under the new Corporate Net-Zero Standard Version 2.0, published in June 2026, the framework has become more structured, more tiered, and more demanding. V2.0 takes effect on 1 February 2027, and validations open the same day. During the transition window, companies can submit under either V1.3.1 or V2.0 until 31 January 2028. From 1 February 2028, all new target submissions must follow V2.0.
This article explains what SBTi requires under V2.0, what it validates, and where companies still need to do their own internal work.
What is SBTi? Short definition
SBTi (the Science Based Targets initiative) is a voluntary global initiative that validates whether corporate greenhouse gas reduction targets are aligned with climate science and 1.5°C pathways. Under V2.0, it validates target ambition, scope coverage, and methodology. It does not validate whether a company has the budget, governance, transition plan, or operational capacity to deliver those targets.
In practical terms, SBTi gives organisations a recognised way to show that their climate targets are grounded in science. It does not replace internal planning. It sets the standard for what counts as a science-aligned target, and V2.0 raises that standard considerably compared to earlier versions.
Category A and Category B: how V2.0 classifies companies
One of the most significant changes in V2.0 is the introduction of two company classifications. The tier a company falls into determines which requirements apply.
| . | Category A | Category B |
|---|---|---|
| Who | Large companies, and medium-sized companies in high-income countries, including the Netherlands and the EU. | Medium-sized companies in upper-middle, lower-middle, and low-income countries. Small and micro companies. |
| Scope 3 targets | Required | Optional |
| Transition plan | RequiredWithin 15 months of initial validation | Encouraged, not required |
| Third-party assurance | Required | Optional |
| Scope 1 and 2 targets | Separate targets required100% coverage | Separate targets required100% coverage |
For most Dutch and EU mid-sized companies, Category A applies. The Netherlands is a high-income country, which means medium-sized companies here fall under the more demanding Category A tier rather than the lighter Category B track.
This matters practically: Category A companies cannot treat Scope 3 as optional, and they must publish a climate transition plan within a year of initial validation.
What SBTi V2.0 requires companies to do
V2.0 is more demanding than the previous standard in several areas. Here is what companies need to do to get targets validated.
Emissions inventory and base year
Companies must base their targets on the most recent complete year of emissions data, using a robust GHG inventory that covers Scope 1, Scope 2 (location- and market-based, as applicable), and relevant Scope 3 categories. V2.0 tightens expectations around data quality and completeness compared with V1.3, which allowed more flexibility on base year selection.
Separate scope targets (100% coverage)
Under V2.0, companies set separate targets for Scope 1, Scope 2, and (for Category A) Scope 3. This replaces the older combined target approach.
- Scope 1: 100% coverage required. Companies can use absolute contraction, sector-specific intensity, or asset transition targets.
- Scope 2: 100% coverage required. Companies must align with low-carbon electricity (LCE), defined as ≤ 0.048 kg CO₂/kWh in the near term and tightening to ≤ 0.024 kg CO₂/kWh from 2035, with a long-term goal of 100% LCE by 2050.
- Scope 3 (Category A): all categories representing more than 5% of total Scope 3 emissions must be included in targets, with a justification for any excluded categories.
Climate transition plan (Category A)
Category A companies must develop and publish a climate transition plan within 15 months of initial validation. This is a new requirement that did not exist under V1.3. SBTi validates that the plan has been published, not whether it is credible, funded, or deliverable.
Reporting
Companies report Scope 1 and 2 footprints annually. Under V2.0, targets operate in rolling five-year cycles. At the end of each cycle, companies undergo a formal End-of-cycle Assessment that includes a comprehensive progress evaluation. For Category A, this stage includes third-party assurance of progress data and market instrument integrity at defined milestones.
Third-party assurance (Category A)
Category A companies require independent third-party assurance (at least limited assurance) of their Scope 1, 2, and significant Scope 3 data at key milestones in the target lifecycle. Assurance must be conducted by an accredited provider using internationally recognised standards. This is part of the End-of-cycle Assessment process, not a requirement on every annual disclosure.
What SBTi validates vs what it does not validate
This is the most important distinction to understand before committing to SBTi. The framework validates whether targets are science-aligned. It does not validate whether the organisation can actually deliver them.
| Area | SBTi validates? | What companies still need internally |
|---|---|---|
| Scope 1 emissions | Yes | Accurate inventory, reduction levers, operational execution |
| Scope 2 emissions | Yes | Low-carbon electricity strategy, EAC procurement |
| Scope 3 emissions | PartlyCategory A: significant categories required | Supplier data, value chain engagement, internal accountability |
| Target ambition | Yes | Board approval, strategic fit, leadership commitment |
| Target timeline | Yes | Delivery milestones, sequencing, resource planning |
| Budget | No | CapEx, OpEx, and funding decisions |
| Governance | No | Ownership, decision rights, board oversight |
| Reduction levers | No | Concrete projects and implementation plans |
| Transition plan existence | YesCategory A | Quality, feasibility, and delivery of that plan |
| Delivery readiness | No | Capabilities, systems, and internal capacity |
Key point: Under V2.0, Category A companies must have a transition plan. SBTi validates that the plan exists and was published, not whether it is credible, funded, or deliverable. The internal work of building a credible climate transition plan remains entirely with the company.
Why SBTi became a credibility signal
SBTi has become a credibility signal because it makes corporate climate targets comparable. For investors, customers, and procurement teams, that comparability matters. A target that has passed a recognised validation process carries more weight than one a company set for itself without external review.
It also fits the wider EU reporting environment. Companies subject to the Corporate Sustainability Reporting Directive (CSRD) are being asked to explain climate ambition, emissions reduction plans, and delivery mechanisms with far more precision than before. SBTi is not a legal requirement under CSRD, but in practice it often functions as a market expectation, particularly for companies that need to demonstrate seriousness to banks, insurers, and enterprise customers.
The real value goes beyond reputation. It reduces ambiguity. If two companies both claim to have climate targets, SBTi helps distinguish between broad intent and a target grounded in recognised methodology. V2.0 raises the bar further: the requirement for third-party assurance (Category A) and a published transition plan means validated targets will carry more evidential weight than under the previous standard.
Who is SBTi for?
Under V2.0, the answer depends partly on company classification. The value case also differs by context and exposure.
- Large companies (Category A): SBTi provides a structured, externally validated framework for standardising target-setting across complex operations and value chains. The mandatory transition plan and assurance requirements add rigour that can satisfy investor and regulatory expectations.
- Mid-sized EU companies in high-income countries (Category A): most Dutch mid-sized companies fall here. SBTi can strengthen credibility with customers, banks, and business partners. The Category A requirements are demanding, so the company needs a solid emissions baseline before committing.
- SMEs and companies in lower-income countries (Category B): the lighter Category B track makes SBTi more accessible. Scope 3 targets and transition plans are optional, which reduces the initial burden. Even so, SMEs still need reliable Scope 1 and 2 data before starting.
- Companies with material Scope 3 emissions (Category A): value chain emissions are central to Category A requirements. SBTi V2.0 requires coverage of any Scope 3 category exceeding 5% of total Scope 3. This makes supplier engagement and upstream data quality a prerequisite rather than a nice-to-have.
- Companies under investor or customer pressure: SBTi offers a way to anchor climate claims in a recognised framework, reducing the risk of one-off or inconsistent target-setting. The question is whether the company has the internal readiness to follow through.
SBTi limitations
V2.0 is more rigorous than its predecessor, though the core limitation remains: SBTi validates targets, delivery stays with the company.
Even with the new transition plan requirement for Category A, SBTi does not assess whether that plan is realistic, funded, or operationally sound. It checks that a plan was published. The gap between a published plan and an executed one is where most organisations struggle.
Specific areas SBTi does not cover:
- Budget and CapEx: whether the company has allocated the capital needed to decarbonise assets, switch energy sources, or redesign supply chains
- Governance: whether there is clear ownership, decision rights, and board oversight for delivery
- Reduction levers: whether the company has identified and costed the specific actions that will reduce emissions
- Scope 3 execution: whether supplier engagement is actually happening, or just planned
- Internal capacity: whether the team has the skills, systems, and time to manage the process
This is where many companies underestimate the work. A validated target can look strong in a report while delivery stalls internally. The SBTi process is worth understanding fully before committing, precisely because the commitment is public and the consequences of falling behind are reputational.
When SBTi may be premature
For some organisations, SBTi is the right destination reached too early. V2.0 raises the baseline requirements, which means companies that were not ready under V1.3 are even less ready now.
SBTi may be premature when:
- The emissions baseline is weak or incomplete. V2.0 requires a physical inventory based on the most recent year of data. If the GHG inventory is partial, outdated, or based on estimates, the foundation for target-setting is not there yet.
- Scope 3 has not been screened. Category A companies must cover all Scope 3 categories exceeding 5% of total Scope 3. Without a Scope 3 screening, it is not possible to know which categories are in scope or how material they are.
- No internal owner has been assigned. SBTi requires ongoing reporting and a five-year renewal cycle. Without a clear internal owner, the process will stall.
- Leadership is not aligned on cost, pace, or priority. Category A now requires third-party assurance and a published transition plan. These are not low-cost activities. If leadership has not committed to the resourcing, the process will create friction rather than progress.
- There is no realistic delivery pathway. A company can set a target and have it validated. But if there is no credible plan to reduce emissions, the target becomes a liability rather than an asset.
In those cases, the right first step is usually building the basics: a solid GHG inventory, an initial Scope 3 screening, and a clear internal owner. That foundation makes SBTi more useful later, and the process considerably less painful.
How to make SBTi useful
SBTi works best when it sits inside a broader delivery system. Validation is the external signal. The internal system is what determines whether that signal holds up over time.
In practice, that means pairing SBTi with:
- A reliable GHG inventory based on physical data, covering Scope 1, 2, and relevant Scope 3 categories
- A climate transition plan that is realistic, funded, and tied to specific reduction levers
- Clear governance and decision rights, including board oversight and an internal owner accountable for delivery
- Budget and CapEx alignment, so that decarbonisation investments are built into financial planning rather than treated as a separate sustainability workstream
- Supplier engagement on Scope 3, particularly for Category A companies where value chain emissions are material
- Annual disclosure and progress reporting, so that stakeholders can see whether the company is on track
Used this way, SBTi becomes more than a validation step. It becomes a discipline for connecting climate ambition to business planning, which is where credibility is either built or lost. The difference between SBTi and net-zero is also worth understanding here: SBTi targets and a net-zero commitment are related, though not the same thing, and confusing the two is a common source of misaligned expectations.
Frequently Asked Questions
SBTi, the Science Based Targets initiative, is a voluntary global framework that validates whether corporate emissions reduction targets are aligned with climate science and a 1.5°C pathway. Under Corporate Net-Zero Standard V2.0, it introduces tiered requirements based on company size and geography.
No. SBTi is voluntary. V2.0 becomes mandatory for all new target submissions from 1 February 2028, though the framework itself remains a voluntary commitment. In practice, it is increasingly treated as a market expectation by investors, customers, and procurement teams.
SBTi validates target ambition, scope coverage, and methodology. Under V2.0, it also validates that Category A companies have published a climate transition plan. It does not validate whether that plan is credible, funded, or deliverable.
Not exactly. It is better understood as a validation framework. The point is to assess whether a company’s target-setting follows recognised science-based methodology, rather than to certify the company as compliant in a broader sense.
Partially, under V2.0. Category A companies must publish a climate transition plan within 15 months of initial validation, and SBTi checks that it exists. It does not assess the plan’s quality, feasibility, governance, or delivery capacity. Those remain internal responsibilities.
Not strictly, though SBTi can make a net-zero commitment more credible. A net-zero claim without a disciplined target-setting process can look vague. SBTi provides structure, and the company still needs a real delivery plan. Understanding the difference between SBTi and net-zero is useful before making either commitment publicly.
V2.0 becomes mandatory for all new target submissions from 1 February 2028. Companies can submit under either V1.3.1 or V2.0 from Q1 2027, with V1.3.1 remaining open until 31 January 2028.