SBTi’s new Corporate Net-Zero Standard Version 2.0 has arrived. 

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We can’t tell you how many times we’ve heard SBTi guidance used as an explanation for why a company doesn’t use carbon credits to take responsibility for their residual emissions. We’ve heard that SBTi disapproves of carbon credits, only recognizes removals, you name it.

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This was actually never the case. Even in V1.0, SBTi states that “companies should take action to mitigate emissions beyond their value chains.” Should!

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However, in the new Standard, SBTi is even more direct that high-integrity carbon credits, both avoidance and removals, are a core part of credible corporate climate action. Now, supporting climate solutions with carbon credits is the default that the best science demands. Companies that don't want to participate have to declare that publicly.

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SBTi itself is voluntary. No company is required to sign up for science-based targets at all, and those who do opt in because they want to do their part on climate change. If it was ever uncertain, it’s now crystal clear that doing your part includes mitigating your ongoing emissions while you decarbonize. 

Now, it’s up to the companies. 

Rather than walk through the entire 100-plus-page Standard, we want to call out some key takeaways:

1. Mitigating Ongoing Emissions is a core part of the framework

The headline here is the new Ongoing Emissions Responsibility (OER) program (Chapter 6). It establishes a structured way for companies to receive credit for taking responsibility for the emissions they haven't yet eliminated by supporting verified mitigation outcomes, including high-integrity carbon credits, alongside their decarbonization targets.

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A few specifics:

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• Three recognition levels: Companies can choose how ambitious to be, and SBTi recognizes them accordingly on its public dashboard:
  
  • Engaged: cover at least 1% of total ongoing Scope 1, 2, and 3 emissions, either by supporting verified mitigation outcomes equal to those emissions, or by setting a contribution budget. (SBTi recommends a budget of at least $20/tCO₂e, but sets no mandatory price at this level.)
  • Advanced: cover at least 10% of total ongoing emissions (including 100% of Scope 1 and 2), via verified mitigation outcomes or a contribution budget set at $20/tCO₂e of covered emissions.
  • Leadership: for larger (Category A) companies, cover 100% of total ongoing emissions and apply a contribution budget of $80/tCO₂e. (Smaller Category B companies reach Leadership at 10% coverage with the same $80 price.) 
    
    • SBTi describes this level as the full internalization of the cost of climate change, and encourages every company to work toward it.
• There is no preference for removal credits. This one bears repeating: SBTi does not prefer removal credits over avoidance credits. This is the right approach: Because the world remains far from net zero, near-term reductions from sources like deforestation and super-pollutants matter greatly. After 2035, the requirement tentatively focuses on removals, with SBTi committing to revisiting these provisions depending on our progress and the best available science as the date approaches.
• Participation is public. Companies must declare their intent to take part within six months of completing Target Validation, displayed on the SBTi Dashboard. Recognition itself is assessed at the end of each cycle on a five-year basis, and SBTi recommends paying for carbon credits or other mitigation as you go rather than waiting until the end.

The OER program is voluntary until 2035. From 2035, Category A companies will be required to support eligible mitigation (currently removals), with the recognition program continuing in parallel.

2. Opting out now requires a public stance

With this new version, SBTi has flipped the default for companies. Participation in the OER program is expected, and companies that choose not to take part in the program must submit an explanation to SBTi as part of Target Validation.

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In other words: not addressing your ongoing emissions is now an active choice you have to justify. With companies’ approach published on dashboard, the framework makes company action visible to customers, investors, and employees.

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3. We’d love to see SBTi move faster

If mitigating ongoing emissions is the right thing to do, there is not a good substantive reason it shouldn’t be required right away for companies seeking SBTi certification. SBTi doesn’t meaningfully require anything until 2035, and even the new choice of mitigating ongoing emissions or opting out is pushed out to a company’s recertification date. This could be years away.

At a moment when AI is reshaping the economy (and driving up energy demand and emissions) on a timescale of days and weeks, a years-long runway to show progress doesn't match the urgency we need.

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Our bottom line

For all that, we circle back to SBTi itself being voluntary. When it requires mitigation even in 2035, there is no obligation for a company to stay in the program. This is why we finish where we started: the most important thing SBTi did in the new Standard is tell companies in no uncertain terms that the guidance is no longer an excuse for inaction: they should be taking responsibility for their ongoing emissions.

As with all aspects of corporate sustainability, we can't rely on standard-setters to do the work. Only companies can do that. Companies committed to following SBTi guidance; we hope they step up and do their part to meet the moment.

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If you have questions about V2.0, or want to talk through how CNaught can help you use high-integrity carbon credits to meet your goals and earn recognition under the OER program, reach out to us here.