The Science Based Targets initiative (SBTi) has released a draft of its revised Corporate Net-Zero Standard (Version 2.0) for public consultation. This update seeks to address challenges in corporate decarbonization, particularly concerning Scope 3 emissions, carbon removals, and climate finance. The goal is to provide companies with clearer guidance on setting and implementing net-zero targets aligned with the latest climate science.
The draft standard builds upon the existing Corporate Net-Zero Standard Version 1.2, refining methodologies and introducing new mechanisms to validate corporate climate action. The updates reflect stakeholder feedback, evolving regulatory landscapes, and advancements in scientific understanding of decarbonization pathways.
Purpose of the revision
Strengthen accountability and transparency in corporate net-zero commitments.
Address the practical challenges of measuring and reducing Scope 3 emissions.
Enhance the integration of carbon removals in corporate climate strategies.
Encourage financial contributions beyond value chain mitigation (BVCM).
Provide sector-specific flexibility for companies in emerging economies.
I. Key revisions in the draft standard
Addressing Scope 3 Emissions
Challenges in Scope 3 accounting
Scope 3 emissions—those generated along a company’s value chain, including suppliers and customers—are often the most difficult to measure and mitigate. Many businesses have struggled with setting effective Scope 3 reduction targets due to data availability, supplier engagement, and variability in emissions reporting methodologies.
Proposed solution in CNZS V2.0
To address these challenges, the draft standard introduces a more flexible and pragmatic approach to Scope 3 target-setting:
Companies can now prioritize high-impact Scope 3 sources rather than applying a fixed percentage threshold across all emissions categories.
Emphasis is placed on procurement policies and supplier engagement to drive reductions across the value chain.
The standard promotes the use of alternative impact metrics, such as the share of procurement from suppliers aligning with net-zero targets.
These changes are designed to increase corporate accountability while acknowledging the real-world complexities of Scope 3 mitigation.
Emphasis on emissions reduction and carbon removals
Focus on direct emissions reduction
The revised standard maintains that companies must prioritize direct emissions reductions within their own operations and supply chains. The SBTi reinforces that net-zero targets should be driven by absolute reductions rather than relying on market-based mechanisms such as offsets.
New provisions on residual emissions
A major update in CNZS V2.0 relates to how companies must handle residual emissions, those emissions that cannot be eliminated through feasible reductions. The new provisions require that:
All residual emissions must be neutralized by the net-zero target year.
Scope 3 residual emissions must also be neutralized, requiring deeper collaboration with suppliers and partners.
Companies must progressively scale up removals over time, rather than waiting until the net-zero target date.
The standard introduces three different approaches to neutralizing residual emissions:
Explicit removal targets: Companies must progressively increase removals to match residual emissions.
Flexible removal targets: Companies can use either reductions beyond targets or removals.
Gradual transition: Allows shorter-term removals first, transitioning to permanent removals over time.
Additionally, removals must meet high-integrity standards, ensuring:
Long-term durability (e.g., geological storage, afforestation, wetland restoration).
Third-party verification and GHG Protocol alignment.
Transparent disclosure on removal volumes and sources.
Facilitating target setting for emerging economies
Sector-specific adjustments
To ensure that companies in emerging markets can set and achieve science-based targets, the SBTi is introducing a differentiated approach based on geographic and economic factors. The draft standard:
Recognizes that businesses in lower-income regions may require longer transition periods.
Allows for target-setting flexibility based on industry-specific challenges.
Encourages knowledge-sharing and capacity-building initiatives to support sustainable growth in these regions.
By addressing regional disparities in decarbonization capabilities, the CNZS V2.0 aims to create a more inclusive framework for corporate net-zero alignment.
Incentivizing ambition through progress validation
New framework for target assessment
One of the most significant updates is the introduction of a progress validation model, which ensures that companies are not only setting ambitious targets but actively working toward them. The new system includes:
Initial validation: Companies must undergo upfront (ex-ante) validation of their net-zero target ambition.
Progress assessment: Organizations must report on emissions reductions at the end of their target period.
Renewal validation: At the end of each cycle, companies must set new targets that reflect past performance.
This approach reinforces corporate accountability by ensuring that net-zero claims are backed by measurable action.
II. Implications for nature-based carbon offset investments
Enhanced demand for high-integrity offsets
With stricter requirements for residual emissions neutralization, companies will need to invest in high-quality, durable carbon removal projects. As avoidance-based offsets are no longer eligible for net-zero targets, corporates will need to invest in nature-based solutions such as:
Afforestation, Reforestation, and Revegetation (ARR) projects
Wetland conservation and mangrove restoration projects
Biochar projects (converting agricultural waste into stable carbon storage).
These solutions will see greater corporate interest and funding, particularly as they align with science-based removal strategies required under CNZS V2.0.
Stronger quality assurance for offsets
The CNZS V2.0 raises the bar for carbon credit eligibility, requiring:
Stricter permanence criteria (projects must guarantee long-term storage of CO₂).
Additionality verification (ensuring that carbon removals would not have occurred without investment).
Stronger MRV (Monitoring, Reporting, and Verification) protocols.
Projects that fail to meet these standards will no longer be recognized within net-zero strategies.
These stricter requirements mean that nature-based solutions such as mangrove restoration and afforestation will play a crucial role in corporate decarbonization efforts. At Apolownia, our expertise in large-scale, high-integrity restoration projects—particularly in mangrove and wetland ecosystems—positions us as a key partner for companies looking to align with the latest SBTi standards while generating lasting climate and biodiversity benefits.
The Corporate Net-Zero Standard Version 2.0 represents a major evolution in corporate climate accountability. By introducing stricter guidelines for carbon removals, enhanced Scope 3 mitigation strategies, and robust progress validation, the new standard ensures that net-zero commitments translate into meaningful action.
Net-zero is not just a goal—it is a continuous process of accountability, innovation, and systemic transformation. The public consultation will run from Tuesday 18 March - Sunday 1 June. We will keep you up to date with new updates.
Summary table of the key takeaways of CNZS v2.0
Topic | CNZS Version 1.2 | CNZS Version 2.0 (Initial Consultation Draft) |
General | ||
Scope | Primarily focused on target setting. | Comprehensive scope covering base year performance assessment, target setting, implementation, assessment and communication of progress, and claims. |
Validation model | Target ambition assessed upfront (ex-ante), but no standardized assessment of target progress (ex-post). | Covers the entire cycle, with an upfront (ex-ante) target ambition assessment, progress assessment (ex-post), and a process to set new targets. |
Differentiation of requirements | No differentiation of requirements within SBTi criteria; separate validation process for SMEs. | Differentiated requirements based on company size and geographic locations. |
1. Net-Zero commitment | ||
Commitment model | Commitment made through the SBTi. | Public net-zero commitment in line with UN High-Level Expert Group (HLEG) recommendations. |
Transition plan | N/A | Recommendation/requirement to disclose a transition plan. |
2. Assessing performance in the base year | ||
Data assurance | N/A | Requirement for Category A companies to obtain third-party (limited) assurance on base year GHG emissions inventory. |
3. Target-Setting | ||
Underlying pathways | Emission reduction benchmarks derived from IPCC AR5 pathways. | Emission reduction benchmarks derived from IPCC AR6 pathways. |
Near-term targets | Near-term targets required across all scopes; SMEs not required to set Scope 3 targets. | Near-term targets required across all scopes (Category A) and Scopes 1 and 2 (Category B). |
Long-term targets | Long-term targets required across all scopes. | Long-term targets required across all scopes. |
Aggregated targets by scope | Scope 1, 2, and 3 targets may be combined. | Separate targets required for each scope. |
Defining ambition | Defined primarily through external benchmarks (e.g., pathways) and target-setting methods. | More nuanced approach that compares current performance with top-down benchmarks determined through pathways and methods. |
Scope 1 | Available methods include sectoral decarbonization approach (SDA) and absolute contraction approach (ACA) with no budget conservation mechanism. | Available methods include SDA and revised ACA (under consultation) intended to address budget conservation while rewarding early action. |
Scope 2 | Requirement for location- or market-based targets, with the option of renewable electricity targets. | Requirement to set both a location-based target and either a market-based or zero-carbon electricity target. |
Allowable mitigation measures for Scope 2 | Undefined. | Where possible, direct procurement of zero-carbon energy or high-integrity electricity market instruments purchased and consumed in the same market (with appropriate time- and spatial-matching); if sourcing zero-carbon electricity is not possible, contributions to other grids as an interim measure. |
Scope 3 | Fixed minimum boundary for all companies (67% for near-term; 90% for long-term). | Boundary focused on most relevant emission sources for the company. |
Primary focus | Emission reduction targets. | Greater emphasis on non-emission metrics and targets. |
Allowable mitigation measures for Scope 3 | Undefined. | Clarity on how to substantiate progress against targets according to different chain-of-custody models. |
Residual emissions | Focus on addressing the impact of residual emissions through neutralization from the net-zero year onwards. | Three approaches proposed to address the impact of residual emissions during the transition to net-zero and from the net-zero year onwards. |
Removal permanence requirements | Limited detail on required permanence of removals. | Two options for removal durability requirements are proposed: following either the like-for-like principle or a gradual shift from less to more durable removals over time. |
4. Addressing the impact of ongoing emissions | ||
Beyond value chain mitigation (BVCM) | Recommendation for companies to support mitigation outside of their value chains. | Stronger incentive by recognizing companies that address the impact of ongoing emissions and support mitigation outside of their value chains. |
5. Assessing and communicating progress against targets | ||
Substantiation of progress | Lack of guidance on substantiating progress against targets. | Substantiation of progress against targets through interventions traceable to the emission source, activity pool, or, in some limited cases, through interim indirect mitigation. |
Determining progress | Requirement to annually report progress against targets, without definition of how to assess progress. | Requirement for companies to assess progress at the end of their target cycle according to a set of pre-defined algorithms. |
Renewal of targets | Requirement to review and, if necessary, revalidate targets every five years, but no requirement to set new targets. | Requirement for companies to set new targets at the end of each target cycle. |
ABOUT APOLOWNIA
Apolownia is a mission-driven company committed to making a significant impact in the climate sector.
We support businesses and funds willing to engage in long-term and impactful decarbonization strategies - within and beyond their own value chain - by designing, implementing and monitoring science-based carbon reduction projects that restore natural ecosystems.
Through technology and innovative solutions, we aim at shaping a resilient and environmentally friendly world, by encouraging the decarbonization of the economy and supporting social and environmental initiatives.
You can drive positive change for the climate, biodiversity and local communities.
Contact us to engage or for more information. Find us on www.apolownia.com.
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