Beyond Carbon Credits: What the Proposed SBTi Net Zero Standard Updates Mean for Your Broader Climate Strategy

Following strong engagement and feedback during our previous webinar - where experts from our team explored the implications of the Science Based Targets initiative (SBTi)’s draft Net-Zero Standard updates on carbon credits, removals, and beyond value chain mitigation - many attendees asked for a deeper dive into the potential impact of these changes on their broader climate strategy.

In response, Climate Impact Partners has teamed up with our long standing partner Nature Positive to host a second session dedicated to unpacking the wider revisions proposed by the SBTi - including updates to Scope 3 coverage, transition planning, data quality requirements, and reporting expectations.

Check out the full recording - along with a written summary of what’s covered.

Key Takeaways from Our Webinar on the Proposed Updates to SBTi’s Corporate Net Zero Standard

The shift from ambition to action

While the first version of the Net-Zero Standard focused heavily on setting targets, this update puts greater emphasis on implementation and progress. Companies will now be expected to show that – and how – they are delivering against those targets, not just announcing them.

Scope 3 coverage gets more granular

One proposed change with significant implications involves how companies handle their Scope 3 emissions. Rather than the current 67% coverage rule, companies may be required to:

• Set targets covering all emissions sources exceeding 5% of total Scope 3 emissions.
• Target any emissions-intensive activity representing more than 1% of Scope 3 emissions, particularly in sectors like agriculture, metals, and cement.

This change will likely require companies to set more specific, individual targets – raising the bar for accountability and ambition across complex value chains.

Redefining the SME pathway

The simplified SME pathway could be replaced. Under the new framework:

• Type A includes larger companies and medium companies in upper/middle income countries.
• Type B covers all small companies, and medium companies in lower and lower-middle income countries.

Type A companies would face more rigorous requirements, including third-party data assurance and faster timelines for target validation.

More rigorous disclosure and transition planning

The draft updated net zero standard proposes:

• Requiring a defined transition plan within a year of target validation.
• A stricter approach to reporting progress toward targets.
• More regular target updates (e.g. five-year milestone structure).
• A three-year limit on how far back base years can go prior to the validation year.
  

Dual scope 2 targets and clarification on mitigation types

Companies would need to set both location-based and market-based Scope 2 targets. The draft also begins to distinguish between direct mitigation (e.g. onsite solar) and indirect forms (e.g. market instruments), with more guidance to come.

What this means for your business?

While many of these updates are still in consultation, the direction is clear: higher expectations, deeper accountability, and a stronger emphasis on action. Businesses will need to be more rigorous in their emissions measurement, target-setting, and reporting.

At the same time, these changes offer a unique opportunity to enhance your climate strategy. By investing now in robust transition planning, value chain engagement, and removals strategies, you can stay ahead of regulatory shifts and market expectations.

Next Steps

• If you're already working on setting targets, continue doing so – the current SBTi standard will remain valid for some time. Consider targeting 2030 to align with the planned future transition to the new standard.
• If you’re new to the process: Watch our first webinar and blog for a deep dive on the changes impacting your carbon program.
• Make your voice heard. There will be opportunities for companies to provide feedback to the SBTi to a further draft of the standard during the second consultation process. If you have feedback or concerns, we encourage you to participate. Check out a summary of our consultation response.
• For help with how carbon credits will integrate with a net zero strategy, get in touch our global team of experts. 
• For help with navigating and setting abatement targets under the Net Zero Standard, please reach out directly to Nature Positive.
  

Climate action has never been more urgent – and clarity has never been more urgent. Stay informed, stay engaged, and start preparing today for a more comprehensive, science-aligned path to net-zero.