Climate verifier eases path for corporate targets

Greenlogue/AP

Corporate climate target-setting is entering a more flexible phase as the Science Based Targets initiative shifts its global approach from a largely standard-setting and validation role towards a broader model aimed at helping companies deliver emissions cuts in difficult operating conditions.

The London-based organisation, widely regarded as the leading verifier of corporate climate goals, has set out a 2026-2030 strategy that gives greater weight to implementation challenges, sector differences and regional constraints. The move marks a significant adjustment for a body whose approval has become a benchmark for companies seeking credibility with investors, regulators, customers and campaign groups.

SBTi says its new approach will keep the requirement for companies to align with net zero by 2050 at the latest, while recognising that the pathway to that goal varies across industries and markets. The organisation is moving away from a more generalised framework towards tailored standards and pathways across sectors and geographies, with a stronger focus on what companies can directly influence.

A key change is the acknowledgement that some companies may fail to meet targets despite using available decarbonisation levers, particularly where emissions sit deep inside supply chains. The organisation now describes targets as being set on a best-efforts basis in a context of uncertainty and dependency, especially for scope 3 emissions, which often account for the largest share of a company’s climate footprint but are the hardest to measure and control.

The shift comes as corporate climate commitments continue to expand. By the end of 2025, 9,764 companies had SBTi-validated science-based targets, a 40 per cent annual increase. Validated net-zero targets rose 61 per cent over the same period, with the total number of companies holding approved targets crossing 10,000 in January 2026. Asia recorded the fastest regional growth at 53 per cent, adding 1,216 companies, close to Europe’s 1,209 additional companies.

Japan led globally with 2,091 companies holding validated targets by the end of 2025, followed by the United Kingdom with 1,363 and the United States with 943. Europe still accounted for the largest share of targets at 49 per cent, followed by Asia at 36 per cent and North America at 11 per cent. Healthcare, information technology and materials were among the sectors showing the strongest growth.

The organisation’s updated Absolute Contraction Approach, announced in April, also reflects the more practical direction. The methodology, used by companies to calculate absolute emissions reduction targets, now adjusts annual reduction rates based on a company’s base year and net-zero target year. The minimum annual reduction floor of 4.2 per cent remains, and the requirement to reach net zero by 2050 or earlier has not changed.

The adjustment is designed to avoid overly compressed reduction requirements for companies setting targets later in the decade. It also recognises progress already made by companies that are renewing their targets after completing an earlier cycle. Existing validated targets remain valid, while companies setting new targets in 2026 and 2027 will have the revised methodology applied where relevant.

SBTi’s forthcoming Corporate Net-Zero Standard V2 is central to the broader overhaul. The revised draft introduces more scope-specific target-setting rules, separate requirements for scope 1 and scope 2 emissions, and greater recognition of sector-specific pathways. Large companies in all countries, and medium-sized companies in high-income countries, will be required to publish credible transition plans within 12 months of initial validation.

The updated draft also introduces more nuanced treatment of emissions that are difficult to trace through complex value chains. Companies will be expected to report mitigation efforts with greater transparency, including the level at which action is being taken, from direct activities to broader sector interventions. SBTi is also developing a recognition mechanism for companies taking voluntary early action to address ongoing emissions, while retaining its emphasis on direct decarbonisation.

The more flexible stance follows mounting pressure from companies, investors and industry groups that have argued overly rigid standards could push firms away from climate frameworks rather than improve real-world emissions performance. Energy-intensive sectors, financial institutions and companies with sprawling supplier networks have faced particular difficulty in setting targets that are both scientifically aligned and operationally achievable.

The change is not without controversy. Climate campaigners have warned that greater flexibility could weaken ambition if it allows companies to rely on process claims rather than measurable emissions reductions. Concerns have also grown around the balance between SBTi’s role as a standard-setter, target validator and potential implementation partner, particularly as demand for climate advisory support rises.

via Greenlogue.com

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