CORPORATE
NET-ZERO STANDARD
V2.0 TERMS OF
REFERENCE
May 2024
ABOUT SBTi
The Science Based Targets initiative (SBTi) is a corporate climate action organization that
enables companies and financial institutions worldwide to play their part in combating the
climate crisis.
We develop standards, tools and guidance which allow companies to set greenhouse gas
(GHG) emissions reductions targets in line with what is needed to keep global heating below
catastrophic levels and reach net-zero by 2050 at latest.
The SBTi is incorporated as a charity, with a subsidiary which will host our target validation
services. Our partners are CDP, the United Nations Global Compact, the We Mean Business
Coalition, the World Resources Institute (WRI), and the World Wide Fund for Nature (WWF).
Science Based Targets Initiative is a registered charity in England and Wales (1205768) and a limited company registered in England and Wales (14960097). Registered
address: First Floor, 10 Queen Street Place, London, England, EC4R 1BE. SBTI Services Limited is a limited company registered in England and Wales (15181058).
Registered address: First Floor, 10 Queen Street Place, London, England, EC4R 1BE. SBTI Services Limited is a wholly owned subsidiary of Science Based Targets
Initiative. © SBTi 2024
DISCLAIMER
Although reasonable care was taken in the preparation of this document, the Science Based
Targets initiative (SBTi) affirms that the document is provided without warranty, either
expressed or implied, of accuracy, completeness or fitness for purpose. The SBTi hereby
further disclaims any liability, direct or indirect, for damages or loss relating to the use of this
document to the fullest extent permitted by law.
The information (including data) contained in the document is not intended to constitute or
form the basis of any advice (financial or otherwise). The SBTi does not accept any liability
for any claim or loss arising from any use of or reliance on any data or information in the
document.
This document is protected by copyright. Information or material from this document may be
reproduced only in unaltered form for personal, non-commercial use. All other rights are
reserved. Information or material used from this document may be used only for the
purposes of private study, research, criticism, or review permitted under the Copyright
Designs & Patents Act 1988 as amended from time to time ('Copyright Act'). Any
reproduction permitted in accordance with the Copyright Act shall acknowledge this
document as the source of any selected passage, extract, diagram, content or other
information.
The SBTi reserves the right to revise this document according to a set revision schedule or
as advisable to reflect the most recent emissions scenarios, regulatory, legal or scientific
developments, and GHG accounting best practices.
Corporate Net-Zero Standard V2.0 Terms of Reference May 2024 | 3
VERSION HISTORY
Version Description Publication date
Corporate Net-Zero Standard First version of the Terms of May 9th 2024
V2 Project Terms of Reference for the major revision
Reference V1 to the Corporate Net-Zero
Standard
Corporate Net-Zero Standard V2.0 Terms of Reference May 2024 | 4
CONTENTS
ABOUT SBTi........................................................................................................................... 2
DISCLAIMER........................................................................................................................... 3
VERSION HISTORY................................................................................................................ 4
CONTENTS............................................................................................................................. 5
INTRODUCTION......................................................................................................................6
OBJECTIVES.......................................................................................................................... 6
STEPS FOR DEVELOPING THE STANDARD....................................................................... 7
SCOPE.....................................................................................................................................7
Exclusions.......................................................................................................................... 8
Geographic application.......................................................................................................8
JUSTIFICATION OF NEED FOR CORPORATE NET-ZERO STANDARD V2.0.................... 9
RELATED STANDARDS AND INITIATIVES........................................................................... 9
INTENDED SUSTAINABILITY OUTCOMES...........................................................................9
INTENDED CLAIMS.............................................................................................................. 10
ENGAGEMENT......................................................................................................................11
How to engage?............................................................................................................... 11
Who should engage?........................................................................................................11
How to keep informed?.....................................................................................................11
LANGUAGES........................................................................................................................ 12
RISK MITIGATION.................................................................................................................12
LAUNCH................................................................................................................................ 12
TRANSITION......................................................................................................................... 12
EXPECTED TIMELINE.......................................................................................................... 13
GOVERNANCE STRUCTURE AND DECISION MAKING................................................... 14
Corporate Net-Zero Standard V2.0 Terms of Reference May 2024 | 5
INTRODUCTION
This Terms of Reference describes the key information related to the Corporate Net-Zero
Standard V2.0 project. This project is a major revision of the SBTi Corporate Net-Zero
Standard and it will be carried out according to the Standard Operating Procedure (SOP) for
Development of SBTi Standards.
OBJECTIVES
The overall aim of this major revision is to ensure that the Corporate Net-Zero Standard
continues to be a credible standard for setting and delivering on ambitious, science-based
corporate targets aimed at achieving net-zero consistent with 1.5°C at the global level by
2050.
The objectives of the Corporate Net-Zero Standard V2.0 project are outlined below1:
● Align with latest science and best practice
○ Ensure a standardized and robust approach for corporates to set net-zero
targets aligned with latest scientific findings (e.g. IPCC Sixth Assessment
Report).
○ Strive to align with emerging best practices (e.g. UN High-Level Expert Group
recommendations), including by exploring general entity-level criteria based
on standard-setting best practice, including integration of commitments into
the standard, and corresponding claims guidance
○ Explore options to address issues related to “climate solutions” providers,
enhancements of fossil fuel-related requirements, and improvements to
guidance related to neutralization.
● Enhance the SBTi’s approach to addressing value chain emissions (scope 3)
○ Update scope 3 target framework to improve implementability
○ Explore a more nuanced approach for scope 3 target-setting, based on the
concepts of climate materiality, significance, and influence
○ Include improved indicators for net-zero alignment of value chains
● Integrate continuous improvement and assessment of target achievement
○ Introduce regularized target cycles and progressive requirements for
companies over the target lifetime enabling a process of continuous
improvement in their net-zero journey
○ Integrate a framework to assess progress achieved against targets (initially
focused on scope 1 and 2) as part of a regular revalidation cycle
○ Review the use of environmental attribute certificates (EACs), including
carbon credits and energy attribute certificates
○ Improve requirements related to measurement and reporting
● Improve structure and interoperability
○ Clarify the relationship between the Corporate Net-Zero Standard and other
SBTi standards
1
Please note that as standards development is an iterative process, with multiple rounds of
stakeholder input and deliberation, project objectives are subject to change.
Corporate Net-Zero Standard V2.0 Terms of Reference May 2024 | 6
○ Update the structure and format of the standard to align with standard-setting
best practice
○ Enhance the interoperability between the SBTi Corporate Net-Zero Standard
and other relevant standards and frameworks.
STEPS FOR DEVELOPING THE STANDARD
The standard revision process aims to be transparent in decision-making, striving for input
from any interested stakeholder through public consultation and more targeted stakeholder
outreach to enable the widest possible consideration of content.
Based on the Standard Operating Procedure (SOP) for Development of SBTi Standards, the
following steps will be followed for developing the Standard:
● Initiation
● Research
● Drafting
● Consultation, including public consultation and pilot testing
● Approval
● Implementation
● Monitoring and Evaluation
Please refer to the Timeline section below for details on the approximate timing of each
development phase.
SCOPE
Applicability
The SBTi Corporate Net-Zero Standard V2.0 will apply to companies worldwide. The SBTi is
also considering potential accommodations for Small and Medium Enterprises (SMEs) within
the Standard.
Deliverables
The SBTi Corporate Net-Zero Standard V2.0 project includes the following deliverables,
which will be made public to aid transparency and help engage stakeholders (with expected
timelines that may be subject to change):
Interim deliverables
● Project Terms of Reference (this document)
● Publication of evidence submitted to SBTi as part of the Call for Evidence on
Environmental Attribute Certificates (without SBTi assessment) (expected May 2024)
● SBTi assessment of the evidence submitted to SBTi as part of the Call for Evidence
on Environmental Attribute Certificates to be published in four distinct reports
covering:
○ Emissions reduction credits
○ Electricity attribute certificates
○ Other energy attribute certificates
○ Commodity certificates
Corporate Net-Zero Standard V2.0 Terms of Reference May 2024 | 7
● Independent systematic review of scientific literature on:
○ Emission reduction credits
○ Electricity attribute certificates
○ Other energy attribute certificates
○ Commodity certificates
● Scope 3 Discussion Paper, which aims to set out a potential updated approach to
scope 3 target setting, describing underlying principles and concepts
● Revision to the cross-sector pathway
● Revision of target-setting metrics and methods for scope 1
● Public Consultation Draft Standard
● Public Consultation Feedback Report
● Pilot Testing Feedback Report
● Basis For Conclusions Report
Final deliverables
● Corporate Net-Zero Standard V2.0 (normative document2)
● Updated Corporate Target-Setting Tool(s)
● Criteria Assessment Indicators3
Exclusions
The following items are not within the scope of the Corporate Net-Zero Standard V2.0
project and may be considered for future revisions of the Corporate Net-Zero Standard:
● Definition of neutralization milestones, i.e. neutralization pathways
● Definition of allowable measures for neutralization
● Framework to assess achievement of scope 3 targets
● Definition of the use of other Environmental Attribute Certificates not included above.
Geographic application
The Corporate Net-Zero Standard V2.0 aims to apply to organizations with emissions and
activities worldwide.
2
As defined in the SBTi Standard Operating Procedure for Development of SBTi Standards.
3
Produced by the SBTi validation services body
Corporate Net-Zero Standard V2.0 Terms of Reference May 2024 | 8
JUSTIFICATION OF NEED FOR CORPORATE
NET-ZERO STANDARD V2.0
The SBTi is undertaking a major revision of the Corporate Net-Zero Standard for the
following reasons:
● Stakeholder feedback received as a result of widespread adoption of the Corporate
Net-Zero Standard since its launch in October 2021 has identified implementation
gaps and opportunities to enhance robust validations of net-zero targets and
increase transparency and credibility of the SBTi overall.4
● Climate science and best practice on corporate climate target-setting have continued
to evolve since the launch of the original Corporate Net-Zero Standard in October
2021, for example IPCC Sixth Assessment Report and the High Level Expert Group
on Net-zero emissions commitments of Non-state entities (HLEG) report. These
developments can inform and strengthen the SBTI Corporate Net Zero Standard.
● To explore ways to strengthen scope 3 target setting informed by the survey on
scope 3 target-setting and implementation conducted by SBTi, as well as other
research that can help strengthen the effectiveness of value-chain decarbonisation
targets.
● Many companies with validated science-based targets are approaching the end of
their first target cycle in 2025. The Corporate Net-Zero Standard will explore core
elements to enable a review of progress against targets at the end of the target
timeframe and to enable a robust re-validation process on a regular basis.
RELATED STANDARDS AND INITIATIVES
The SBTi is part of a growing ecosystem of standards and initiatives addressing corporate
climate change action from different angles. The SBTi recognizes the value of working to
harmonize with other actors in this ecosystem.
During the standard development process, the SBTi will assess other standards and
initiatives relevant to the Standard's objectives, exploring the feasibility of alignment, where
appropriate and feasible, in line with SBTi’s objectives and Standard Operating Procedure
(SOP) for Development of SBTi Standards. The SBTi will seek the engagement of relevant
stakeholders to gather insights on best practices in consideration of other standards and
initiatives.
INTENDED SUSTAINABILITY OUTCOMES
In 2018, the Intergovernmental Panel on Climate Change (IPCC) warned that global
warming must not exceed 1.5°C above pre-industrial temperatures to avoid the catastrophic
impacts of climate change. Business has a vital role to play in driving down greenhouse gas
emissions and building the resilient, zero-emissions economy we urgently need. This action
must be grounded in science. Science-based targets show companies and financial
4
The SBTi target validation services body.
Corporate Net-Zero Standard V2.0 Terms of Reference May 2024 | 9
institutions how much and how quickly they must decarbonize to prevent the worst impacts
of climate change.
A key criterion the SBTi uses in prioritizing the projects it chooses to undertake is the impact
the project will have in addressing greenhouse gas emission-reduction from key sectors or
activities. By the end of 2022, companies with science-based targets or which had
committed to set targets represented over a third of the global economy by market
capitalization, and the total committed annual emissions reductions across all approved
targets was 76 million tonnes of CO2e5.
Although decarbonization has a link with all of the UN Sustainable Development Goals, the
implementation of the Corporate Net-Zero Standard seeks to especially contribute to the
following UN Sustainable Development Goals (SDGs):
These four key SDGs have been selected as particularly relevant for the following reasons:
● SDG 13: Climate Action: Science-based targets focus on reducing greenhouse gas
emissions, directly contributing to climate action by addressing climate change and
its impacts.
● SDG 7: Affordable and Clean Energy: Meeting science-based targets often requires
transitioning to renewable energy and improving energy efficiency, promoting clean
and sustainable energy sources.
● SDG 9: Industry, Innovation, and Infrastructure: Companies working toward
science-based targets typically need to innovate and adopt sustainable practices,
supporting the development of resilient infrastructure and sustainable
industrialization.
● SDG 12: Responsible Consumption and Production: Science-based targets
encourage companies to redesign production processes, optimize resource use, and
manage waste, aligning with the goal of promoting sustainable consumption and
production.
INTENDED CLAIMS
As part of the Corporate Net-Zero Standard V2.0 development process, and in line with a
broader piece of work on claims, the SBTi plans to develop claims guidance to supplement
the SBTi’s current communications guidelines. The aim is that companies are enabled to
make credible claims around the emission reduction targets that they have set and that have
been validated by the SBTi, as well as claims around the achievement of those targets,
where appropriate.
5
SBTi, 2023. SBTi Monitoring report 2022.
Corporate Net-Zero Standard V2.0 Terms of Reference May 2024 | 10
ENGAGEMENT
How to engage?
The SBTi values stakeholder input to inform the development of its standards. There are a
variety of channels through which stakeholders can engage with and input into the
development of the Corporate Net-Zero Standard V2.0.
● Project feedback form: Over the course of the whole project, any stakeholder is
welcome to submit feedback on documents that have been released through the
Project Feedback Form. All feedback will be carefully considered and published on
the SBTi website, with personal information removed. This form is not intended as a
complaints form6.
● Public consultation: the revision to the Corporate Net-Zero Standard will go through
one round of public consultation for a minimum of 60 days (expected for Q4 2024/ Q1
2025). Public webinars will be hosted to launch the public consultation and during the
consultation period with simultaneous translation, and stakeholders will have the
opportunity to submit feedback to the consultation questionnaire via a survey.
Resources will be accessible from the Corporate Net-Zero Standard webpage.
● Pilot testing: the revision to the Corporate Net-Zero Standard will undergo pilot
testing.
● Launch: webinars with Q&A sessions will be hosted when the Corporate Net-Zero
Standard V2.0 is published (expected in Q4 2025).
Who should engage?
The Corporate Net-Zero Standard V2.0 Team welcomes input from all stakeholders with an
interest in this project development, including but not limited to:
● Academic and research institutions
● Civil society organizations
● Technical experts
● Corporates
● Governments and regulators
● Standard-setting organizations
● Sustainability practitioners
● Associations
● Underrepresented groups that are affected by climate change and/or the
implementation of our standards
How to keep informed?
Stakeholders can stay up to date with the Corporate Net-Zero Standard V2.0 development
process, opportunities to provide input, and planned events by monitoring the SBTi’s website
for updates, signing up for the SBTi newsletter, and following the SBTi on X (formerly
Twitter) and LinkedIn.
6
Please note that stakeholders who wish to submit complaints related to the SBTi existing standards
or guidance documents, or standard development processes, including the Standard Operating
Procedure for Development of SBTi Standards, may do so by emailing
standardscomplaints@[Link].
Corporate Net-Zero Standard V2.0 Terms of Reference May 2024 | 11
For any general queries relating to the Corporate Net-Zero Standard V2.0 project and how to
engage please contact standards@[Link].
LANGUAGES
All documents relating to the Corporate Net-Zero Standard V2.0, including consultation
drafts, will be published in English (this is the SBTi working language). The SBTi aims to
translate the consultation draft in Spanish, Mandarin and French and to prepare an
executive summary of the finalized Corporate Net-Zero Standard V2.0 with requirements in
Arabic, English, French, German, Japanese, Korean, Mandarin, Portuguese and Spanish.
RISK MITIGATION
The SBTi and governance bodies shall undertake a risk assessment alongside the standard
development, to identify potential risks in implementing the draft Standard and how to
mitigate these (e.g., unintended consequences that could arises from the implementation of
the Standard, factors that could have a negative impact on the ability of the Standard to
achieve its objectives, and possible corrective actions that could be taken to address these
potential risks).
LAUNCH
The final draft of the Corporate Net-Zero Standard V2.0 is expected to be published in Q4
2025 along with:
1. Target-setting tool (final version)
2. Criteria Assessment Indicators (final draft)
3. A summary of the feedback received throughout the consultation process and
how the feedback was taken into account in the final standard and/or
guidance.
TRANSITION
Full details to support entities with validated targets, targets under validation, or active
commitments to prepare for conformity to the Corporate Net-Zero Standard V2.0 will be
communicated in a timely manner before its launch.
Corporate Net-Zero Standard V2.0 Terms of Reference May 2024 | 12
EXPECTED TIMELINE
The proposed timeline for the Corporate Net-Zero standard V2.0 project based on the phases outlined in the Standard Operating Procedure
(SOP) for Development of SBTi Standards is shown below. This includes project deliverable milestones and periods for engagement (i.e.
consultation). Please note that these are expected timelines and are subject to change.
Figure 2. Expected project timeline.
Corporate Net-Zero Standard V2.0 Terms of Reference May 2024 | 13
GOVERNANCE STRUCTURE AND DECISION
MAKING
The Standard Operating Procedure (SOP) for Development of SBTi Standards sets out in
detail the governance and decision making processes that apply to standards development
and revisions.
Corporate Net-Zero Standard V2.0 Terms of Reference May 2024 | 14
Corporate Net-Zero Standard V2.0 Terms of Reference May 2024 | 15
