In the words of SBTi Chair Francesco Starace -

“The draft standard addresses complex, emerging issues and lays the foundation to enable more companies to move further and faster towards net zero. Working hand-in-hand with stakeholders across the ecosystem to seek and consider a diverse range of views, we aim to produce a standard that is both rigorous and practical, and works for businesses and the planet. With a limited carbon budget left, this is more important than ever.”

This is what he said about Corporate Net-Zero Standard Version 2.0 which has pretty important pointers. A 132 pager document which is open for public consultation till the first of June 2025, it is a draft update of its Corporate Net-Zero Standard. This framework helps companies set and reach science-based emissions carbon reduction targets. Important changes in the new draft - Scope 3 emissions accounting, carbon removal targets, and governance expectations.

Scope 3 emissions have always been a tough cookie to crack - The draft proposes new rules for them. Companies earning more than $450 million must mandatorily set Scope 3 targets, corporations should identify their high emission activities ( these should account for at least 1% of their Scope 3 footprint or exceed 10,000 metric tons of CO₂ annually ), the old fixed percentage rules for Scope 3 targets are gone and companies are encouraged to make sure that their suppliers have set their net zero targets.

Also, there is a fresh approach to help reduce residual emissions. Quality of carbon credits are stressed upon, companies can add high quality carbon removal efforts to their journey towards net zero. Carbon removal targets are mandated along with emission reduction endeavours, voluntary carbon removal efforts are recognised in corporate strategies and companies have ample personal discretion and flexibility in how companies address their residual emissions.

SBTi is also introducing better governance and monitoring measures. Large companies must set net zero emissions within the first year, there will be random audits, baseline targets checked and updated annually. All these stellar measures to avoid greenwashing, and it brings us to the debate on SBTi ‘s “dynamic” stance on carbon credits - this “dynamic” shift is both pragmatic and provocative. It acknowledges that no company can reach true net zero without balancing out the last hard-to-abate emissions, but it also invites scrutiny and questions what quality is- something we at LongStraw Carbon have been working on. SBTi is careful to say that offsets cannot replace reductions. However, in practice, this creates gray zones. Are we seeing a move toward legitimising voluntary carbon markets within science-based net zero frameworks? If so, it could be a defining moment for both corporate climate accountability and the credibility of carbon credit markets.

The framework is certainly more robust, ambitious, and attuned to the real-world complexity than its predecessor. However, implementation is everything and whether these new rules will actually accelerate decarbonisation or end up as bureaucratic checkboxes, will depend a lot on monitoring, enforcement, corporate acceptance and a handful of other factors.

The public consultation is a crucial moment. Let us see how stakeholders perceive this.