Announcement: A decade after Paris, new work programme drives stronger, more coordinated climate action. Read here.
Parts of this site were translated using AI. Accuracy may vary.
Announcement: A decade after Paris, new work programme drives stronger, more coordinated climate action. Read here.
Parts of this site were translated using AI. Accuracy may vary.
Thursday, 24 July 2025 | By Climate High-Level Champions
As companies face increasing pressure to deliver on climate commitments, the Science Based Targets initiative (SBTi) is in the process of finalizing a revised Corporate Net-Zero Standard, shifting the focus from target setting to implementation.
The SBTi, the world’s most widely used framework for validating corporate climate targets, was established to help companies align their decarbonisation plans with the goals of the Paris Agreement. For thousands of companies worldwide, having an SBTi-validated target signals to investors, customers, and regulators that their plans to cut emissions are not just promises, but measurable commitments grounded in science.
The SBTi’s CEO, David Kennedy, provides an exclusive insight into the growth of SBTi-validated targets, as well as how Version 2 of the Standard - which is expected to be ready for use by early 2026 - will tackle challenges like how and when to use carbon credits, as well as consistent, transparent emissions accounting.
Kennedy also explains why, despite economic headwinds, companies are doubling down on decarbonisation and how the revised Standard will help them deliver on their pledges with credibility and transparency in a carbon-constrained world.
This interview has been edited for length and clarity.
"We’re seeing sustained growth in the quantity of net zero targets. Over 11,000 companies now either have validated targets or commitments to set them with the SBTi. In 2024, the number of companies with validated net zero companies more than doubled, and in just the first five months of this year, we’re already 30% ahead of where we were at the same point in 2024.
Despite rising costs, political tensions, and economic uncertainty, the data shows that companies are not pulling back from decarbonisation. For example, a recent PwC study of CDP data found most public companies are not just holding steady but are more than twice as likely to be increasing their emissions reduction goals rather than slowing down.
Companies around the world are submitting applications to the SBTi, reflecting the global momentum behind climate action. We continue to see strong demand from the U.S., UK, and Europe, but also growing engagement in Asia. More companies are recognizing the need to prepare for a carbon-constrained future and the benefits of getting ahead of that challenge.
On the quality of commitments, more and more companies are coming to us with a solid understanding of their carbon footprint, which is the foundation for setting credible, science-based targets. Our Corporate Net-Zero Standard requires companies to align their decarbonisation pathways with limiting warming to 1.5°C. For example, that means committing to cut absolute Scope 1 and 2 greenhouse gas emissions by at least 42% by 2030, relative to a 2020 baseline.
Companies are increasingly beginning to work through the puzzle of developing action plans even before the target is finalised so they can hit the ground running.
Key actions include energy efficiency improvements, investing in on-site renewable electricity, or signing contracts to procure green power. Many companies are now also decarbonising heat - for their facilities or industrial equipment - and transitioning vehicle fleets, with more and more companies rolling out electric vans.
When a company sets a science-based target, it enters a five-year cycle during which it must publicly report on its progress annually. At the end of that period, the company is required to disclose results against its targets.
We’re refining the details of what that progress reporting will entail. This was a key feature of our recent consultation on the second version of our flagship Corporate Net-Zero Standard, and we’ll have more to say in the next draft which is expected in the autumn.
Our vision is to build a framework of leading indicators of effective decarbonisation. This will enable us to capture and analyse the implementation experiences of thousands of companies, and transform that information into actionable, forward-looking insights.
By identifying the early predictors of action - such as investment, supplier engagement, technology adoption rates, and progress against interim milestones - we can help companies and stakeholders anticipate whether they’re on track to meet their targets before final reporting deadlines arrive.
This proactivity will not only allow us to assess collective progress across the corporate landscape, but also surface patterns that show where interventions are most needed. Ultimately, it will empower organizations to learn from each other, accelerate their decarbonisation journeys, and focus resources on overcoming the most significant barriers to climate action delivery.
The first version of the Corporate Net-Zero Standard was designed for the first phase of the net zero transition. It took a climate objective and translated it into a global pathway to curtail emissions, and secured commitments and then targets to deliver emissions cuts.
Now, the broader climate action ecosystem is in the implementation phase. That’s reflected in the second version of the Standard, which has already been shaped by extensive consultation and active engagement from a wide range of organizations and businesses, and is now entering pilot testing.
Key changes currently proposed in the draft version of the Standard include splitting Scope 1 and Scope 2, recognising the distinct challenges they pose. We’re also proposing an action-based approach to Scope 2, where companies set targets to reduce location-based emissions, and either reduce market-based emissions or set a zero-carbon electricity target, which means committing zero-carbon electricity by 2040 at the latest by investing directly in renewable generation, entering power purchase agreements, or procuring certified green power.
There’s also a stronger link to transition planning, as companies increasingly publish and execute detailed plans for how they will deliver their targets. For Scope 3, the draft’s focus is on companies driving net zero alignment in their supply chains, especially with key suppliers.
We’ve also set out options for consideration around using high-integrity carbon credits, but with a clear message: these can never be a substitute for reducing your own emissions. Carbon dioxide removals (CDR) can be a useful complement to emissions reductions, but it’s vital that this does not dilute efforts to reduce emissions profiles.
Overall, we’re aiming to build in pragmatism - without diluting scientific rigor - to offer companies more options suited to their specific context. For example, if a company is making serious efforts and achieving meaningful progress, but falls short of a target, we won’t shame them. But our ambition is that we will engage with their challenges and keep moving them forward.
It's slightly premature to summarise it, but we’ve had nearly a thousand responses to the consultation. We are taking those very seriously, and systematically capturing and synthesizing key insights. It’s an ongoing process and we're also working with five technical groups that we've convened for different aspects of the Standard - holding deep dives on the pros and cons of options to evolve it. Once we have the next draft, we’ll consult further to ensure that it reflects all of the feedback and further thinking.
That’s a critical point. A target alone isn’t enough - companies need a clear roadmap to action. Transition plans are that bridge.
We’ve anticipated this and reflected it in the draft Standard in two ways. First, by defining expectations in terms of concrete actions, we give companies greater clarity about what their transition plan should focus on. Second, we’ve consulted on whether to require companies to publish a transition plan within a set timeframe after target validation.
A lot of regulations, including the EU Corporate Social Reporting Directive (CSRD), now require companies to have a 1.5°C or net zero-aligned plan, but don’t define what that means in practice. In theory, companies could come up with their own version of the approach, but that opens them up to criticism. The SBTi offers the gold standard for what alignment with net zero should look like, so companies can translate that into a clear, credible transition plan that their key stakeholders - whether employees, investors, or suppliers - can get behind.
The Race to Zero and other groups like it are key to rallying momentum. When companies gather to discuss shared problems, competition rules often make them cautious about speaking openly. Pre-competitive collaboration through alliances like Race to Zero helps overcome that.
There are many organizations working alongside SBTi: Mission Possible Partnership, Climate Arc, CDP, and others. It’s essential that the accountability ecosystem stays joined up to avoid duplication and confusion. The good news is, we all talk to each other and share the same goal: a coherent, system-level approach that leverages everyone’s strengths.
I want to be clear: some decarbonisation frameworks allow companies to trade off emission reductions with buying more credits. That is not the SBTi’s approach. Reducing your own emissions remains non-negotiable. That’s true of version one of the Standard and will remain true in version two.
However, to meet global climate goals, we also need to scale up large-scale removals - 10 gigatons annually over time - in addition to all of the stretch ambition to slash carbon footprints. So there is a role for high-integrity removals within a science-based approach, as a complementary measure. In our consultation, we presented options for recognising these levels of removals, and we’re now reviewing feedback and undertaking pilot testing before deciding how best to move forward.
Yes. In the consultation, we made it clear that companies must have targets to reduce their own emissions, with no trade-offs. We also acknowledged that high-integrity removals could have a complementary role, but exactly how we recognise that is still under consideration. We’ll share more in the next draft of the Standard.
If you think about what decarbonisation actually involves, it’s about transforming the major sources of emissions in an economy: electricity, heat, transport, and agriculture. That’s where the vast majority of the carbon footprint comes from. Effective decarbonisation requires moving to low-carbon electricity, electrifying heat and transport - like adopting electric heating systems and electric vehicles -and transforming agricultural practices.
The draft Corporate Net-Zero Standard Version 2 builds on this thinking, considering how a more action-based approach could be incorporated into net zero targets. The point is to make the commitment to action explicit, rather than simply asking companies to follow a high-level emissions trajectory.
We’re also developing sector-specific Standards. For example, we’re currently consulting on an automotive sector Standard, which reflects the increasing penetration of electric vehicles both in sales and across company fleets. While the Standard doesn’t prescribe every step in detail, the trajectory is fundamentally underpinned by the replacement of internal combustion engine vehicles with electric ones.
Beyond automotive, we will soon consult on a power sector Standard, giving power companies a dedicated framework to commit to, including increasing investment in renewables and other low-carbon generation.
More broadly, many sectors - especially emissions-intensive, energy-intensive industries - face unique challenges. Over time, we intend to develop a full suite of sector-specific Standards to reflect those realities.
I absolutely believe this approach - tying standards to specific real-economy actions - will increase both credibility and effectiveness. When companies, investors, and stakeholders can see clearly what actions underpin a target, it builds confidence that those goals will translate into measurable progress.
The corporate net zero transition isn’t about companies doing the right thing for the sake of it. Ultimately, it’s about the business case.
Despite the weakening of top-level climate leadership in certain key markets the international climate agreement has sustained momentum and still covers more than three quarters of global emissions. National and regional policies, incentives and regulations are also already in place - and only getting stronger.
All of this points in one direction: we are going to be living in a carbon-constrained world. And smart companies across every geography and sector - aviation, shipping, banking, retail, energy, infrastructure - need to be and are planning for it. They understand that they’re already facing transition risk. If they don’t act, they will simply not remain competitive. The SBTi is playing a central role in helping businesses translate transition risk into concrete action that will protect their competitiveness now and in the years ahead.”
SBTi is one of 26 Partners in the Race to Zero, which along with 33 Accelerators, collectively unite more than 16,200 members – the world’s largest alliance working to halve global emissions by 2030 in line with the Paris Agreement, with transparent action plans and near-term targets.
