The Science-Based Targets Initiative was founded in 2015, in the context of COP 21 (the Paris Agreement conference), by a coalition of organisations with expertise on the transition, such as the Carbon Disclosure Project and the World Resources Institute. It is a not-for-profit organisation whose data is public.
In 2015, companies were already reporting greenhouse gas emission reduction targets. However, on the one hand, it was difficult for companies to know which targets they should adopt to limit global warming, taking their profile (size, sector, location) into account. On the other hand, investors struggled to assess the relevance and ambition of these targets (one could then see companies claiming to be aligned with a 1.5°C scenario... that they had defined themselves, which made the task considerably easier).
Indeed, to meet certain climate objectives (limiting warming to 1.5°C or even 2°C by 2100), it is necessary to rely on a credible roadmap (scenario), which sets out the emissions reduction pathway to be followed overall, as well as the allocation of greenhouse gas emissions (carbon budget) provided for by that pathway, by sector and by geography.
SBTi responds to this need for guidance by creating sector-specific guidelines and target-assessment tools, based on credible decarbonisation scenarios. It mainly uses International Energy Agency (IEA) scenarios, which are reworked into sectoral guidelines, but also draws on work from the IPCC and other scientific organisations. SBTi provides guidance both on "near-term" targets (5 to 10 years) and on "net-zero" targets (which, in addition to near-term targets, include a reduction of at least 90% of emissions by 2050 and the neutralisation of residual emissions through durable sequestration solutions).
Companies wishing to have their decarbonisation targets validated by SBTi must therefore verify that their ambitions are at least as ambitious as the targets set by SBTi, and must tick a number of boxes. Some criteria are general, notably the inclusion of Scope 3 in their objectives if it accounts for more than 40% of the company's total carbon footprint (Scope 1, 2 and 3). Other, sector-specific criteria also come into play. For example, companies in the FLAG sector (Forest, Land and Agriculture) must include a no-deforestation commitment.
SBTi's work is widely recognised for its scientific credibility and rigour. Validation by SBTi represents a strong mark of seriousness for a company or financial institution. To date, more than 11,000 companies have had their targets validated by SBTi, and its data is widely used by investors in managing climate-related risks and opportunities.
In June 2026, SBTi published a new version of its Net-Zero methodological approach (SBTi Corporate Net-Zero Standard Version 2.0), after ten years of the historical standard's existence. This Version 2.0 will come into force on 1 February 2027. The current version (1.3.1) remains open for setting objectives until 31 January 2028, and from 1 February 2028, only Version 2.0 will apply. Beyond assessing the robustness of reduction targets, the updated standard now places greater emphasis on the operational implementation of these targets, as well as on the progress made.
Greater differentiation of company profiles is introduced, notably according to their size but also their geographical location. A distinction is now made between Category A companies, with substantial resources, subject to heavier requirements, and Category B companies, subject to lighter requirements consistent with more limited resources.
Targets are now planned over a five-year "near-term" horizon and reviewed every five years. Companies' progress must be published annually, and long-term objectives are optional. If a company fails to meet its planned objectives over a five-year cycle, it is not excluded from SBTi but must redouble its efforts over the next period. The idea is to support companies that make genuine transition efforts.
In addition to reduction targets, companies are asked to provide evidence on the following:
The Corporate Net-Zero Standard Version 2.0 also introduces a hierarchy for implementing the decarbonisation strategy. Actions that can be carried out directly by the company should be favoured over decisions with more indirect effects. This makes it possible both to prioritise actions that directly reduce emissions, while taking into account the full range of a company's efforts when the most direct levers cannot be implemented.
Finally, a new framework called OER (Ongoing Emissions Responsibility) structures voluntary contribution initiatives to decarbonisation. SBTi states that "Even with ambitious science-based targets, companies continue to emit GHG while transitioning toward their net-zero year. These ongoing emissions consume the planet’s limited carbon budget and continue to drive warming." Thus, companies can, and eventually must, implement and/or finance carbon sequestration solutions and/or emissions reductions outside their value chain. It will be mandatory for Category A companies to commit to this type of objective from 2035; this obligation will extend to Category B companies from 2050.
Scope 1 and Scope 2 targets are now separated, making it possible to better distinguish the specific issues of each Scope.
For Scope 1, three types of targets can be used: absolute, intensity-based (where a sectoral pathway applies), and in terms of "asset transition" via an "Asset Decarbonization Plan" (ADP).
For Scope 2, targets can be defined either in absolute terms or via "Low-Carbon Electricity (LCE) Alignment" (share of low-carbon electricity consumed).
Scope 3 objectives are now mandatory only for Category A companies (with the exception of financial institutions and the fossil fuel sector, for which Scope 3 is necessarily included). For these companies, each Scope 3 category representing more than 5% of total Scope 3 must be covered by reduction targets. For Scope 3, three types of targets can be used: absolute, intensity-based (where a sectoral pathway applies), and alignment-based. The "Alignment" option consists not of directly measuring emissions reductions but of setting objectives on the alignment of the company's activities (upstream and downstream) with science-based decarbonisation pathways, quantifying them via various indicators (expenditure, turnover, volume or emissions).
In summary, for the different Scopes, "flexible" options are offered as follows:
This pragmatic shift by SBTi is part of a broader movement. Companies face the operational difficulty of meeting highly ambitious decarbonisation objectives, even as public policies remain generally insufficiently robust in view of the challenges of the Paris Agreement, in an unstable geopolitical context that further undermines transition efforts. As SBTi itself points out: "It's not the commitment that's the hardest part. It's the execution," in the foreword to the Net-Zero Standard Version 2.0. Yet, according to SBTi, moving to a net-zero business model remains the best way to strengthen a company's resilience and competitiveness in the face of transition risks.
Beyond simply announcing a decarbonisation ambition, SBTi now requires companies to demonstrate the concrete efforts deployed to achieve the objectives set, throughout the life cycle of those objectives (announcement, monitoring, closure). The challenge is to continue the mass mobilisation of companies on the subject of transition, by introducing flexibility on the options available to reduce Scope 1, 2 and, for the companies concerned, Scope 3 emissions, while retaining an ambitious scientific approach, referring to a 1.5°C pathway.
Certain details of the standard may raise questions and should be monitored closely, notably:
These details are clearly identified by SBTi as being critical, which shows that the organisation remains committed to its principles of scientific integrity and transparency. In our view, the evolution of the Corporate Net-Zero standard does not undermine SBTi's credibility, which remains an essential standard in terms of transition, for issuers and investors alike.
As part of our monitoring of the ESG data market, we have identified, alongside the release of SBTi Net-Zero v2.0, other solutions for assessing companies' genuine transition efforts. These solutions complement the historical "temperature" solutions, which relied mainly on issuers' targets.
The Climate Transition Assessment (CTA) provides a qualitative analysis of a company's transition trajectory: where it stands today, and where it should stand in future, in light of planned transition actions and identified implementation levers. It results in a single score, the "Future Shade," derived from S&P Trucost's proprietary "Shades of Green" methodology. This score reflects the expected degree of alignment of the company's activities with a low-carbon, resilient model, and therefore with the Paris Agreement, taking into account the realistic transition timeline for its sector and its own commitments. This solution is applied either at the request of the issuer, who wants to demonstrate its solidity in terms of transition risk, or at the request of the investor, who wishes to assess the solidity of their portfolio from a climate transition perspective.
The Energy Transition Framework provides a forward-looking score of the economic risk a company could face due to the energy transition over the next 5 to 7 years, and its capacity to limit this risk while capturing new revenue opportunities. It combines sector-specific, geographic and company-specific factors. This score combines two dimensions: the company's degree of preparedness for the transition, and the transition pressure it faces. It thus helps to shed light on the financial materiality of climate risk and the quality of the company's management of it. This solution covers more than 11,000 issuers (MSCI ACWI Investable Market Index).
The Net Zero Assessment is Moody's proprietary framework for assessing the robustness of an entity's decarbonisation trajectory, with reference to a global net-zero pathway compatible with the most ambitious goal of the Paris Agreement. The Net Zero Assessment covers three aspects: the ambition of the entity's targets (targets), the concrete implementation of its plan (means employed), and the governance framework surrounding its emissions reduction objectives. The analysis uses public information and, where necessary, private information (provided by the issuer or the investor). This solution is intended for issuers wishing to demonstrate their solidity in terms of transition.
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