Setting and achieving climate targets – important aspects in the development of SBTs

On 18 March 2025, the first draft of the revised Corporate Net-Zero Standard (V2) was released for public consultation. The aim is to accelerate decarbonisation by adapting the standard to the latest scientific developments and best practices in climate science, for example those of the Intergovernmental Panel on Climate Change (IPCC). Simplifications to the structural approach are also intended to promote the development and implementation of targets. These adjustments include

Until 2026, companies should continue to develop targets according to the current version of the Corporate Net-Zero Standard (V1.2). It is intended that companies will use the new version of the standard to set targets from 2027.

The adapted procedures in V1.2 of the Net-Zero standard are intended to make the development and communication of SBTs more transparent and to optimise procedural processes. In the following, we would like to discuss the most important proposed changes in the target setting process.

The new version of the standard stipulates that companies must first make a public commitment to the net zero target. It is crucial that the management supports these targets and that the company actively communicates its ambitions both internally and externally. The strategic integration of climate targets into the company's overarching corporate strategy is of great importance to ensure that climate targets are effectively implemented and achieved.

In addition, the SBTi proposes - similar to the ESRS standard - that companies must develop a detailed transition plan as part of their commitment, including the measures and resources required to achieve the net zero target.

In the second step, companies should first develop a clear understanding of what they have already achieved in terms of emissions reduction in the planned target base year. This includes the procedure for determining the company's internal greenhouse gas emissions and the subsequent handling of these emissions. A clear understanding of the status quo helps to effectively close the gaps to a net zero target with the subsequent target setting process. V1.2 lists a set of performance assessment indicators that includes both emissions and non-emissions metrics, such as the percentage of energy sourced from clean sources or procurement from climate-friendly suppliers. 

Greenhouse gas accounting in the base year and in subsequent years is to be determined in accordance with the Greenhouse Gas Protocol (GHG Protocol). In addition, the applicability of sector-specific SBTi requirements for the company itself must be reviewed

A significant change is also planned for the selection of the target base year: Whereas previously any year from 2015 onwards was permissible, V1.2 stipulates that the selected base year may not be more than three years prior to the initial validation. This is intended to ensure that companies pursue ambitious and up-to-date reduction targets and do not weaken their climate commitments by choosing a strategically favourable, distant base year.

​3. target setting according to V1.2

The actual definition of climate targets takes place in the third step. In addition to a scientifically sound approach to achieving net zero emissions, it is also crucial that the targets are specifically measurable and clearly defined in terms of time. Companies can set themselves one or more short and long-term targets in order to achieve net zero emissions within the specified time frame.

If a company falls within the scope of a sectoral standard, it must apply the criteria of that standard in addition to the cross-sectoral criteria of the

Corporate Net-Zero Standard in order to be eligible for validation. The SBTi is currently developing documentation to support the process of assessing the applicability of sector standards.

For a higher level of detail in target setting, companies can target their climate targets to specific sub-categories of emission sources under the GHG Protocol. One example of this is purchased electricity, which is recognised under Scope 2. In this category, specific targets for reducing emissions can be achieved, for example, by electrifying processes or switching to renewable energy sources.

A key aspect is supply chain management, as a significant proportion of emissions are generated along the value chain. Ideally, suppliers should therefore be actively involved in setting and achieving targets in order to jointly reduce Scope 3 emissions. V1.2 moves away from the previous minimum percentage coverage of 67% for short-term and 90% for long-term Scope 3 targets. Instead, it takes a more targeted approach, requiring companies to prioritise Scope 3 targets on the most emissions-intensive activities within their value chain and those over which they have the greatest influence (e.g. Tier 1 suppliers).

In V1.2 of the standard, combined reduction targets for Scope 1 and Scope 2 will no longer be permitted in future. This is intended to ensure that the reduction of emissions from Scope 1 is not neglected by the often larger Scope 2 emissions or that the purchase of green electricity does not take a back seat.

Continuous monitoring and reporting ensures that progress towards the targets is tracked. Depending on internal company developments, there may be a regular need to update targets in order to achieve net zero emissions in the long term. To ensure that climate targets remain transparent and credible, companies should regularly report on their progress. The SBTi is currently examining whether an independent review of this data should only be recommended or mandatory in future in order to strengthen the credibility of the information.

V1.2 also introduces a standardised procedure for assessing progress against targets. For this purpose, all companies should use a progress assessment using the Annex G: Progress Assessment Form. The emission reductions should be reviewed annually and reported both internally and externally. The revised standard provides for more detailed requirements for the disclosure of target progress.

​Conclusion