Changes in Near-Term Climate Target Rules

SBTi’s Net-Zero Standard Version 2.0: A Game Changer for Corporate Climate Action! The Science Based Targets initiative (SBTi) has released the second version of its Corporate Net-Zero Standard for public consultation, bringing significant updates that could redefine how companies set and achieve their net-zero goals. Key Changes Proposed: ✅ From Ambition to Action – A new validation model ensures that companies not only commit to net-zero but also demonstrate measurable progress and continuously improve. ✅ Stronger Scope 3 Target Framework – Moves away from fixed boundaries (67% for near-term and 90% for long-term) and prioritizes emission-intensive activities. Also introduces non-emission metrics like sustainable procurement share and revenue from green products. ✅ Differentiated Requirements – Companies are categorized based on size and geography, providing tailored pathways for large firms and SMEs in different economic contexts. ✅ Incentivizing Beyond-Value-Chain Mitigation (BVCM) – Recognizing firms that support climate-positive actions outside their value chains, addressing emissions beyond direct control. ✅ Enhanced Residual Emissions Framework – Companies will now need interim carbon removal targets, ensuring a credible pathway to net-zero rather than relying solely on end-of-period offsets. ✅ More Accountability on Transition Plans – Public disclosure of transition plans within 12 months of target validation will now be required, aligning with best practices like the UN High-Level Expert Group recommendations. 🌟 Why This Matters: This update shifts the corporate climate conversation from net-zero pledges to real, accountable, and sector-specific progress. By improving Scope 3 tracking, pushing interim removal targets, and integrating BVCM, SBTi is aligning corporate climate action with the urgency of IPCC AR6 pathways. 💡 What’s Next? 🔹 Public Consultation is Open! Companies, policymakers, and stakeholders can provide feedback before final adoption. 🔹 Transition Timeline: New targets can be set under V1.2 until 2026, but from 2027, companies will need to align with Version 2.0. 🚀 This is a defining moment for corporate sustainability. Are businesses ready to embrace a more robust, accountable, and scientifically aligned net-zero transition? Let’s discuss in the comments! #NetZero #SBTi #ClimateAction

The ICJ’s climate opinion confirms States must align their 2025 NDCs with 1.5°C, reflect their highest possible ambition, and be grounded in science and equity. Arbitrary or weak targets may breach international law. This is not soft law or a ceiling for ambition - it is a minimum legal requirement for all Parties under the Paris Agreement. Amid sweeping commentary on the ICJ climate opinion, this piece clarifies its legal meaning for 2025 NDCs: binding, science-based, equity-informed, and grounded in the below 1.5°C limit. Discretion is narrow. States must deliver deep, ambitious emissions cuts, or risk breaching international law.

What does the new proposed SBTi Corporate standard tell us about the future of corporate climate action? Will the changes help? 🤔💚🔽 The Science Based Targets initiative released the consultation draft of its Corporate Net-Zero Standard 2.0 with major updates to the process of setting, tracking, & validating corporate net-zero targets.   You'll recall that the biggest talking points around SBTi targets have been the treatment of scope 3 emissions & the limitations on corporates using offsets or credits. The SBTi process requires corporates to achieve substantial reductions in emissions & only use offsets for the remaining unavoidable emissions.   The new proposals are a significant evolution in how corporates set targets.   ▶ An expanded framework that includes tighter target validation, new governance & audit measures, data assurance, & progress testing;   ▶ Differentiation between large and medium-sized companies in wealthy countries (Category A) and smaller companies in lower income regions (Category B);   ▶ Greater focus on the most emissions intensive aspects of companies' scope 3 emissions and more emphasis on non-emissions metrics and targets;   ▶ Companies will have to require their tier 1 suppliers to align with net-zero themselves;   ▶ Some flexibility for companies to allow insetting to address Scope 3 emissions (as well as things like SAF "book and claim") & more incentives for climate finance in BVCM & carbon removals during the transition to net-zero, not just once net-zero is achieved;   ▶ New requirements to disclose transition plans; and   ▶ New guidance on communicating progress towards targets - this is incredibly important!   These changes are a positive step in the right direction although there is room for improvement, in particular around the rules for dealing with ongoing emissions (i.e. during the transition).   By limiting removals to dealing with scope 1 emissions, there is a risk the proposals miss the mark. High scope 1 emitters often don't have SBTi targets. The vast majority of companies with SBTI targets have very low scope 1 emissions relative to their scope 3 emissions.   Voluntary corporate climate target setting needs to be robust enough to drive verifiable action & prevent greenwashing, but not so restrictive or unachievable that corporates don't even start the process.    There is substantial value in corporates setting public emissions reduction targets & making transition plans to achieve them.   There is also value in corporates investing in high quality offsets, carbon removal, & nature-based solutions even while they are reducing their absolute emissions.   The consultation is open until 1 June. Interested in others' thoughts on the proposals. Will these move the dial enough to incentivise action & aid voluntary markets? #sustainability #esg #climatechange #climateaction #sustainablefinance #DLAPiperNZ 📸 Mihai Lazăr | Unsplash

Say goodbye to your existing climate targets. The new SBTi Version 2.0 draft is rewriting the rules for corporate climate action. Is your company ready for the radical shift in climate target setting? The Science Based Targets Initiative's Version 2.0 Corporate Net-Zero Standard draft isn't just another minor update - it's a complete restructuring of how businesses approach climate targets. Many sustainability teams have spent years developing their climate strategies, only to face potential obsolescence as standards evolve. This creates tremendous uncertainty, especially for companies mid-journey in their climate commitments. But here's the thing... These changes aren't coming overnight.  Companies setting targets in 2025 and 2026 can still use the current criteria, with existing near-term targets remaining valid until 2030 or their end date. Here's how Version 2.0 will transform corporate climate action: - Categorization by Size and Geography → Uses EU regulatory definitions for company size → Uses World Bank classification for geographical categories → Creates different requirements for different companies - Mandatory Climate Transition Plans → Large companies in high-income countries need net-zero by 2050 commitments → Formal transition plans required after SBTi validation → No more near-term targets without long-term commitment - Restructured Target Setting → Fixed 5-year timeframes for near-term targets → Separate 1.5°C-aligned targets for each Scope → Both location-based and market-based Scope 2 targets required - Greater Focus on Removals → Options for addressing residual Scope 1 emissions → Potential acceleration of carbon removals market → More flexibility in removal pathways being considered - Continuous Progress Assessment → New requirements for assessing target progress → Enhanced accountability mechanisms → Recognition framework for climate leaders Your goal should be to understand these changes now, even though Version 2.0 won't be required for new target setting until 2027. Remember: Every rule change presents both challenges and opportunities. Early adopters will gain competitive advantage and leadership recognition. Want to shape these standards? The consultation period runs through June 1, 2025, and SBTi is looking for pilot testers in the second half of 2025. ✍️ Your insights can make a difference! ♻️ Share this post if it speaks to you, and follow me for more.