Extended SBTi recognition for companies taking responsible climate action through Nature based solutions
SBTi Updated Draft Standard: Integrating Nature based solutions and Carbon Credits into Corporate Climate Action.
The Science Based Targets Initiative (SBTi) has released a revised draft of the Corporate Net-Zero Standard V2 for a second public consultation.
The new Standard introduces a new mechanism for companies to incorporate Nature-based Solutions and Carbon credits into their climate strategies and gain recognition for their responsibility actions. In addition to this, now all companies must disclose whether or not they finance climate action, and if not, they must explain why.
“With global temperatures now breaching the $1.5° threshold more frequently, the urgency to decarbonize corporate operations and value chains has never been higher. At the same time, there is a pressing need to unlock finance for mitigation activities beyond company boundaries, including nature-based solutions and emerging carbon removal technologies.” (SBTi)
While the core focus remains on direct decarbonization, the updated draft (under consultation until December 12) introduces a new recognition mechanism. This is designed to incentivize companies that take early, voluntary action to address the impact of their ongoing emissions.
The standard proposes ways in which high-quality carbon credits can support corporate net-zero target setting in a way that complements, rather than substitutes, the decarbonization of operations and value chains.
New Recognition: Ongoing Emissions Responsibility Framework
Through the new “Ongoing Emissions Responsibility Framework,” companies can earn recognition across two distinct labels: Recognized and Leadership.
1. Recognized Status
- Target Group: All companies that take responsibility for a share of their ongoing emissions through supplementary climate contributions.
- Title Awarded: “Ongoing Emissions Responsibility Recognized” status.
- Minimum Threshold: Companies must meet a minimum threshold, which is intentionally set low at 1% of ongoing scopes 1–3 emissions over the target timeframe. This is designed to ensure feasibility and accessibility across sectors.
2. Leadership Status
- Target Group: Companies that fully internalize the cost of climate change.
- Title Awarded: “Ongoing Emissions Responsibility Leadership” status.
- Requirements: Companies must meet both minimum finance and mitigation outcomes:
- Minimum Funds: Determined by applying a carbon price to 100% of ongoing emissions.
- Minimum Mitigation Outcomes: Shall be equivalent to 40% of ongoing emissions.
Companies may also share responsibility for scope 3 ongoing emissions using one of the following approaches:
a. Value chain collaboration: Responsibility may be co-claimed or co-financed by multiple value chain partners for emissions that appear in more than one company’s GHG inventory, provided there is credible evidence that at least one party has actively assumed responsibility.
b. Carbon price differentiation: Companies may apply a differentiated internal carbon price to their scope 3 emissions, relative to scopes 1 and 2, if they can demonstrate that another value chain partner has also taken responsibility for the same emissions.
Key elements of the Standard
● Enhanced clarity on purpose and scope: Updates the cross-sector net-zero
framework to align with the latest science and best practice, while enabling a clean
interface with sector-specific and financial institution standards.
● Cyclical validation system: Introduces a new three-stage process (Entry Check →
Initial Validation → Renewal Validation) with optional spot checks.
● Reinforced ambition: Requires company-backed net-zero ambition, clear internal
accountability, and provides a strong link with transition-planning and transparency.
● Diversified scope 1 target-setting methods: three approaches for setting
scope 1 ambition: reducing emissions on a linear pathway to net-zero; increasing the
share of low-carbon activities over time; or the Asset Decarbonization Plan (based on technological readiness, with company-specific carbon budgets to reflect sectoral realities).
● Tightened integrity for low-carbon electricity (scope 2): Strengthens the
credibility of scope 2 targets and requiring alignment with 100% low-carbon electricity by latest 2040. It strengthens contractual instruments to meet this goal, requires geographic matching, implementation beginning with the largest electricity consumers.
● Focused and flexible scope 3 framework: Refocuses target setting on the
highest-priority value chain emission sources, allowing exclusions for lower-impact
activities and areas where influence is limited. Three target-setting approaches: emissions intensity, activity alignment, and counterparty alignment, including cascading engagement through the supply chain. Acknowledges a range of implementation options to catalyze value chain decarbonization, including at the emission source, counterparty, activity-pool, and
sector levels, introducing the use of High-quality Environmental Attribute Certificates.
● Progressive responsibility for ongoing emissions: Introduces a new recognition
mechanism with two tiers, Recognized and Leadership, to highlight companies taking
early, voluntary action to address their ongoing emissions.
(From 2035, it is intended that Category A companies assume responsibility for an increasing share of their ongoing emissions each year, progressively building toward complete neutralization at the point of net-zero. From 2035 a new consultation and approach will follow for Version 3 of the Standard).
● Clarified disclosure and renewal expectations: Annual progress reporting, requiring disclosure and explanation of any deviations from planned trajectories, outlining corrective actions to remain aligned with their goals. Companies are expected to set new targets for the following period before or at the end of each target cycle, and to undertake performance assessments to support claims of continued progress.
Initiative 1415 offers various credits of high integrity depending on your needs and comprehensive assistance with related communication and corporate compliance.
Christoffer Bonde, CEO