What's changing with the SBTi Net Zero Standard V2 (new standard)? | Changes and action guide for practitioners

The proposed Corporate Net Zero Standard V2 published by the Science Based Targets initiative ( SBTi) is more than just an updated standard. It marks a strategic turning point in how companies are held accountable for climate change. V2 integrates the existing guidance for near-term and net zero targets and requires all companies to achieve net zero over the long term. This is expected to align business climate change measures with the Paris Agreement's goal of keeping global average temperatures within 1.5°C above pre Industry levels, and lead to long-term climate change mitigation.

This article does not provide a detailed explanation of the process of drafting the law or the articles, but"What will these new standards require of companies in their practices?" "Where should my company start?"Organize by focusing on:

▼What you will learn from this article

• Overview of the SBTi Net Zero Standard V2 (new standard) and major changes from V1.3
• Practical points that companies should review for each of Scope 1 to 3 (capital investment, renewable energy procurement, supplier response)
• Migration timeline and steps to prepare now

▼ Click here to learn the basics of SBTi
"What is SBTi certification (Science Based Targets)? Learn how to obtain it, its benefits, and how it works"

▼For those who want to know more about the background of the revision process, details of the first and second drafts, and the relationship with the GHG Protocol revision, please click here
"Revised SBTi Net Zero Standard: Second draft released, accepting multiple paths to emissions reduction"

What's changing for businesses with the SBTi Net Zero Standard V2: Three key changes

First, let's look at the three main changes that directly affect business operations in the SBTi Net Zero Standard V2 (second draft). By understanding these, you can roughly understand which aspects of your company's operations will be affected.

• Moving to a continuous validation model The previous approach of "one-off verification" has shifted to an ongoing approach requiring regular progress checks and goal updates.Verification ModelSpecifically, a cycle of "Entry Check," "Initial Validation," "Renewal Validation," and "Spot Check" will be introduced, requiring continuous improvement efforts and accountability for progress.

• Diversifying and specifying goal- Settings approaches In particular, Scope 3 Settings are linked to more practical actions rather than just a uniform "emission amount reduction rate."activity based KPIsWe will shift to a system that allows for a variety of approaches, such as "the percentage of procurement from suppliers with net-zero targets" and "the recyclability of products."

  • Why is it important? This will help companies clarify "what they need to do specifically" to reduce Scope 3, making it easier to formulate more effective action plans.

• Mandatory third-party verification and transition plans Newly, Scope 1 to 2 andImportant Scope 3 Emissions CategoryRegarding the calculation ofThird-party verificationFurthermore, it is mandatory to have a "Migration PlanIt is also essential to formulate and publish a "

  • Why is it important? Obtaining third-party verification requires the establishment of internal procedures, outsourcing the work to a verification organization, and internal approval of the transition plan, which may increase the burden on businesses upfront. This makes systematic preparations for obtaining SBT even more important.

How is it different from V1.3? Organizing the changes that you need to keep in mind from a practical perspective

Next, we will organize the points that will have a major impact on practice from the perspective of "What is different from the current V1.3?". For details on the minor differences in the provisions and the differences between the drafts, please see "Revised SBTi Net Zero Standard: Second draft released, accepting multiple paths to emissions reduction"There is a detailed explanation in this article."Structural changes" are important for those in charge when considering response policiesI will narrow it down to the following.

Goal framework: Toward a premise of designing short-, medium- and long-term goals together

Currently, short-term and long-term guidance is provided separately, but in V2Integrated into a three-tiered design format for short-term, medium-term, and long-term(Whether the mid-term goal is recommended or required is currently under consideration.)
This will allow us to plan for a reduction in the short term.5 years later(short term), 10 years later(Middle term), and until 2050(long term)Consistent reduction targetsIt is becoming increasingly important to align with business and investment plans.

Verification process: from one-time to continuous

Previously, once certification was granted, it was over, but with V2

Entry Check → Initial Validation → Renewal Validation + Spot Check

ThatContinuous renewal systemwill be moved to.

In other words, it's not enough to just set a goal,An operational model whose progress and validity are regularly checkedIt will be.

Scope 2: Geographical and temporal consistency of certificates is a bottleneck in practice

In V2, the requirements for using certificates have been tightened compared to v1.3.

• Which region's electricity is used (geographical consistency)
• When was the electricity generated? (time consistency)

These are points that are also being discussed in the revision of the GHG Protocol, and if they are introduced, it is thought that they will have a major impact on Japanese businesses in particular.

Scope 3: From coverage rate to "priority Category x activity-based indicator"

V1.3 expresses the target scope in terms of coverage rates, such as "Scope 3 inclusion rate (67%)," but V2 states that priority Category should be included within the target scope. It also lists items that can be excluded if it is difficult for a company to take activity to reduce them, such as procurement from small suppliers.

This suggests that businesses are expected to limit the scope of their impact and focus their efforts there.

New Obligations: Third-Party Verification and the Changing Status of Transition Plans

In V2,

• Third-party verification of Scope 1 to 2 and important Scope 3
• Publication of the transition plan

This Category that "data auditability" and "strategic accountability" will be strengthened.

Points to review now for Scope 1, Scope 2, and Scope 3

Scope 1: Update target design in line with capital investment plans

Regarding Scope 1, the target Settings approach has been reorganized and expanded in V2.In addition to the emission amount based targets (absolute amounts, Intensity , and the sectoral decarbonization approach, or SDA) that have been used until now, companies will be able to choose to Settings targets linked to the adoption rate of low-carbon activity and facility renewal plans.

Specifically, it is expected that a company will consider combining the following approaches depending on its business characteristics and emissions structure.

1. emission amount target: Conventional absolute or Intensity based emission reduction targets. Target Settings that assumes a linear reduction path, including the Sectoral Decarbonization Approach (SDA).
2. Low Carbon activity Alignment Targets: A goal that aims to increase the proportion of low-carbon activity, such as the introduction of renewable energy facilities, electrification, and low-carbon technologies.
3. Asset Decarbonization Plan Goals: A goal for promoting emissions reductions in line with the overall carbon budget by organizing renewal and replacement plans for each asset owned by a company, such as factories and equipment.

The asset decarbonization plan is a newly proposed target, and rather than a linear reduction, it is thought that a plan tailored to the company's circumstances can be considered. Details are currently being considered, and it is recommended to keep an eye on it.

The first step in addressing Scope 1 emissions is to take stock of your company's major equipment renewal timing and emissions profile, and consider which approach is most realistic.

Scope 2: Renewable energy procurement strategies and certification rules must be revised

Scope 2 will bring about major changes to the rules for handling renewable energy certificates (EAC), which will have a direct impact on the renewable energy strategies of many Japanese companies. In particular, the requirement for geographical and temporal consistency – "where is the electricity generated and when is it consumed" – is a major practical hurdle that could lead to management risks such as future cost increases and procurement difficulties unless a corresponding renewable energy procurement system is put in place.

• Tighter geographic consistency The low-carbon electricity and certificates purchased areThe "same region (grid)" that consumes electricityThis means that in the future it may become difficult to use renewable energy certificates generated in the Tohoku region to cover electricity consumption at the Tokyo headquarters. This could hinder renewable energy investment in regions far from Industry clusters, and there are concerns that this could have an impact on Japan's overall Energy policy.
• Phased in temporal consistency After 2030, electricityHourly matching: Aligning power generation and consumption timesThe revised bill will be introduced in stages. Large-scale consumer companies (those with annual consumption of 10 million kWh or more within a single region) will be50% in 2030, 75% in 2035, and 90% in 2040Japan's current certificate system does not accommodate this mechanism, and unless it is improved within the next few years, it could force companies to fundamentally reassess their renewable energy procurement strategies.

[Points that personnel should pay attention to]

These changes are not simply revisions to reporting rules. For companies that have previously achieved 100% renewable energy with relatively inexpensive certificates, they will face supply risks, such as a significant increase in procurement costs or being unable to secure the necessary certificates in the first place. Companies must immediately assess the renewable energy supply potential in their electricity consumption areas and restructure their long-term procurement strategies.

Scope 3: Design actions based on priority Category and supplier alignment

Regarding Scope 3, the focus is now more on what actions to take with priority Category and major suppliers, rather than on "comprehensively and meticulously calculating everything." V2 shifts the focus to managing Scope 3 through activity based KPIs such as supplier consistency rates, sending a clear message that companies should place emphasis on activity they can directly control, such as supplier engagement and product design.

Category 1 and 2 (Purchased goods and Service, capital goods):

• Priority goods: For "priority goods" such as steel and cement, which account for more than 5% of the total Scope 3 emissions, we will comply with the Intensity benchmarks set out by SBTi.Individual goal Settingsis required.
• other activity: Increasing the proportion of procurement from suppliers with net-zero targetsSupplier Alignment Targets" are the main KPIs.

Category 11 and 13 (Use of sold products, leased assets):

• " shows the percentage of customers aligned with product Energy efficiency improvement targets and net zero targets.Customer alignment goalsThis would free companies from the need to directly track their customers' actual emission amount, allowing them to focus on contributing through their own products and Service.

Category 12 (Disposal of sold products):

• Increasing the proportion of products that offer circular options, such as being recyclablecircularity goals" is the indicator.

[Points that personnel should pay attention to]

This change transforms Scope 3 from something to be calculated and reported to something to be managed through specific actions. It is now more important than ever for companies to identify Category that have the greatest impact on them (such as priority items or major suppliers) and take a strategic approach to focusing their efforts there.

Now that we understand the specific changes to goal Settings, we will explain the new process requirements that companies will need to address.

What is the newly introduced "Continuous Emissions Responsibility"? An overview of the burden on companies

V2 introduces a new concept called "Responsibility for Ongoing Emissions," which is separate from reducing emission amount in a company's GHG inventory. This is also a discussion of the "ongoing costs" of climate change, i.e., the extent to which efforts are made to combat unavoidable emissions on the way to net zero.

• overview
  • This is a concept that contributes to climate change measures in order to mitigate the impact of greenhouse gas emissions that companies will continue to emit as they transition to net zero. Specifically, it is assumed that companies will invest in CCS (carbon capture and storage) projects outside their own value chains.
• Status Certification
  • By disclosing how they plan to meet this responsibility, companies can gain Status certification.
    • Recognized: Scope 1 to 3 emission amountEquivalent to 1%disclose plans to meet its responsibilities.
    • Leadership: Scope 1 to 3 emission amount100% equivalentfulfilling its responsibilities to the
• Future Mandate 
  • From 2035 onwardsCategory A companiesThe plan calls for companies to gradually make it mandatory to fulfill this responsibility, reaching 100% by 2050. This suggests that the financial burden on companies to address climate change will increase in the future.

Transition schedule and the timeline Japanese companies should follow

For practitioners, the most important question is "what needs to be decided by when?" We will organize the timeline that Japanese companies need to meet, taking into account the migration schedule from V1.3 to V2 and the classification of Category A/B.

Migration Timeline

• Current application deadline: The current standard (V1.3) isDecember 31, 2027It is possible up to.
• Full transition to the new standard: January 1, 2028All future applications will require all companies to use V2.
• Existing certification goals: Already certified targets remain valid until the target year.

Category of target companies

Companies are classified into "Category A" and "Category B" depending on their size and location, and some of the requirements differ. Even medium-sized Japanese Company are likely to be subject to the strict requirements of Category A (third-party verification, mandatory migration plans, etc.).

• Category A: Large companies and medium-sized companies in high-income countries
• Category B: Companies other than those mentioned above (small and medium-sized enterprises, etc.)

Summary: Four steps to start now towards the SBTi Net Zero Standard V2

Finally, we will summarize four steps that company representatives should start taking now in preparation for the SBTi Net Zero Standard V2. While we will leave the detailed provisions and drafting process to our Insight article, this article will focus on practical starting points.

1. Strategically reassess your company's Scope 3 emissions structure

   • Identify "important Category" and consider activity-based KPIs that are appropriate for your company.

2. Reassess renewable energy procurement strategies based on new Scope 2 requirements

   • We will examine the impact of geographical and temporal consistency on renewable energy costs and procurement risks.

3. Develop a GHG data management infrastructure that can withstand third-party verification

   • We will check whether the current calculation process and system are at a level that can be verified by a third party, and confirm whether the system and system need to be revised.

4. Redefining supplier engagement across the entire value chain

   • Understand the target Settings status and data provision capabilities of major suppliers, and plan how to approach them.

For those who want to apply SBTi V2 support to their own company

The SBTi Net Zero Standard V2 is not simply a revision of the standard, but an opportunity to significantly reassess all aspects of business practices, from companies' decarbonization strategies and data management to renewable energy procurement and supplier relations.

If you have any specific points you need to consider, such as "Which Category should our company start with?" or "How should we organize the new requirements for Scope 2 and Scope 3?", please feel free to contact us..

We cover a wide range of support directly related to SSBJ, including TCFD, CDPs , SBT, and third-party verification, and can provide support tailored to your company's situation, including establishing internal systems, gap analysis, and reviewing disclosure documents.

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【reference】
・Corporate Net-Zero Standard Version 2 – Draft for Public Consultation (November 2025)
https://files.sciencebasedtargets.org/production/files/CNZS-V2-Second-Consultation-Draft.pdf
・SBTi Corporate Net-Zero Standard (Version 1.3)
https://files.sciencebasedtargets.org/production/files/Net-Zero-Standard.pdf