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Theme 1 · Deep-dive

What you commit to, and how you set it.

V2.0 rebuilds the target architecture around five-year near-term targets, decides your obligations by category, and gives each scope methods that match how it actually decarbonises. This page explains each method — what it is and how it is calculated — and the conditions for setting a net-zero target.

1 · Target architecture

Five-year near-term targets are now the foundation.

The required core is now two or more near-term targets on a fixed five-year cycle, set separately for each scope at 100% coverage. Long-term targets sit above that and are conditional or optional. A net-zero target is the optional capstone — and setting one triggers specific conditions (below).

Near-term targets are mandatory and do the work. Net-zero is now a choice you add on top.

Net-zero target — OPTIONAL Combines all targets + neutralises residual emissions at net-zero Long-term targets — to residual levels by 2050 Scope 1 if intensity / asset Scope 2 · optional Scope 3 · optional Near-term targets — fixed 5-year cycle · REQUIRED Scope 1 100% · required Scope 2 100% · required Scope 3 required for Category A Required Conditional / optional Optional (net-zero) Build from the bottom: the five-year near-term targets are what every company must set.
The V2.0 target structure — a required near-term foundation, conditional long-term layer, and an optional net-zero capstone.

What conditions apply if you set a net-zero target?

A net-zero target is optional — but choosing it commits you to the full architecture. The SBTi sets conditions both for setting a net-zero target and for reaching the net-zero state.

To SET a net-zero target (CNZS-C17)

Comprehensive coverage up front

  • Set near-term targets on scope 1, 2 and 3, using eligible methods.
  • Set long-term targets on scope 1, 2 and 3 to reach residual levels.
  • Long-term targets must cover 100% of scope 1, 2 and 3 emissions.
  • Long-term target year is 2050 at the latest (high-income countries recommended earlier).
To REACH net-zero (CNZS-C17.4)

Deep cuts, then neutralise

  • Reduce scope 1, 2 and 3 emissions to zero or a residual level consistent with eligible net-zero pathways.
  • Neutralise all residual emissions with carbon removals at the net-zero year — and any emissions released thereafter.
  • Net-zero cannot be claimed until both are achieved.
Why this matters

Under V2.0 a company can be fully SBTi-aligned with near-term targets only. A net-zero target is a bigger commitment — it pulls in 100% long-term coverage across all three scopes plus neutralisation. Companies should set one deliberately, not by default.

Source: CNZS V2.0 §3.5 (C17–C17.4)
V1 → V2 comparison & references (direct quotes)
Version 1.3.1Version 2.0
“…cover a period of 5 to 10 years from the date of submission.”Transition Guide, p.14 (C17)“…cover a period of 5 years from the date of submission.”Transition Guide, p.14 (C9)
“…set target(s) to cover 95% of scope 1 and 2 emissions.”Transition Guide, p.14 (C5 fn.18)“…cover 100% of scope 1 emissions, targeted separately from scope 2.”Transition Guide, p.14 (C10)
2 · Categorisation

Your size and geography decide your obligations.

V2.0 replaces the corporate / SME / financial-institution split with two categories, A and B, set from consolidated size, geography and emissions. The category is fixed at registration for the whole cycle and re-checked when you next set targets. It determines which requirements are mandatory and which are optional.

Company — consolidated group figures Net turnover ≥ €450m OR ≥ 1,000 employees (FTE)? — in any country — YES Category A NO ↓ In a high-income country, AND either: scope 1+2 emissions ≥ 10,000 tCO₂e, OR at least 2 of these three — balance sheet ≥ €25m · turnover ≥ €50m · ≥ 250 employees (FTE) YES A NO ↓ Category B For Category B these become OPTIONAL: transition-plan disclosure · base-year assurance · scope 3 targets
How a company lands in Category A or B — and what flips to optional for Category B.
Worked example

A €600m-revenue group is Category A on turnover alone — no further tests needed.

A €120m firm in a high-income country with 9,000 tCO₂e scope 1+2 and 300 FTE fails the emissions test but meets two financial tests (turnover ≥ €50m, FTE ≥ 250) → Category A.

A small firm in a lower-income country below the thresholds → Category B, with scope 3 targets and base-year assurance optional.

Methodology detail & references
  • Consolidated basis. Thresholds are assessed for the group as a whole, even where the target boundary sits lower — for comparability across large groups.
  • Two-year average. Figures are drawn from the two most recent financial statements; non-euro reporters convert to euros.
  • Geography. Determined by the ultimate parent's country, classified using World Bank income categories.
  • Fossil fuel companies cannot validate targets yet, pending sector methods (limited exceptions apply).
References: CNZS V2.0 — §B.3, Table 2 · Transition Guide, p.9
3 · Target-setting methods

Methods now match how each scope decarbonises.

Each scope gets routes that fit its reality. The charts below summarise the shape of each route; the explainers underneath set out what each method is and how it is calculated. You can combine methods within a scope.

Scope 1 — three routes

Cut emissions at the source

  • Absolute — linear cut
  • Intensity (SDA) — sector convergence
  • Asset transition — phase-out milestones
Scope 2 — two routes + trigger

Decarbonise purchased energy

100% LCE
  • LCE alignment — low-carbon share ↑
  • Absolute reduction
  • >20% electricity growth → absolute required
Scope 3 — three archetypes

Target what's material

5%
  • Significant (≥5%) — must be covered
  • Below 5% — may be excluded
  • Choose from three archetypes (below)

Scope 1 — three routes, explained

Scope 1 · Route 1

Absolute emissions reduction

What it is
A straight-line cut in total scope 1 emissions from the base year to the net-zero year — the route most companies use.
How it's calculated
A fixed annual contraction rate (the cross-sector linear pathway) is applied to base-year emissions. The SBTi tool derives the absolute tonnage you must reach by the target year. Reductions are independent of business growth.
When to use
Default for most companies and sectors; simplest to track against the physical inventory.
Scope 1 · Route 2

Emissions intensity — Sectoral Decarbonization Approach (SDA)

What it is
A target on emissions per unit of activity (e.g. tCO₂e per tonne of steel) that converges on a sector's 2050 benchmark.
How it's calculated
Your starting intensity converges toward the sector's net-zero intensity along an SDA sector pathway. The absolute outcome depends on how your activity (production) grows — so a long-term scope 1 target is also required.
When to use
Emissions-intensive sectors with an SBTi sector pathway (steel, cement, chemicals, aluminium, etc.).
Scope 1 · Route 3 (new in V2)

Asset transition — Asset Decarbonization Plan (ADP)

What it is
For long-lived capital stock: operate existing assets as efficiently as possible and replace them with low-carbon assets on predetermined milestones.
How it's calculated
You commit to a quantitative emissions-reduction target for the cycle, derived from milestones (e.g. a date to halt investment in new unabated assets) and/or a carbon budget drawn from science-based pathways. Detailed investment plans need not be published.
When to use
Where capital turnover doesn't follow a linear or sector pathway — power generation, heavy industry, infrastructure.
Long-term rule

A Category A company whose near-term scope 1 target uses the intensity or asset-transition route must also set a long-term scope 1 target — because neither guarantees an absolute path on its own.

Source: CNZS V2.0 C10–C11 · Transition Guide, p.15

Scope 2 — two routes, explained

Scope 2 · Route 1

Low-carbon-electricity (LCE) alignment

What it is
A target to raise the share of low-carbon electricity in your consumption toward 100%. Low-carbon includes renewables, nuclear, and generation fitted with carbon capture and storage.
How it's calculated
You set a rising percentage of consumption met by low-carbon sources, on a trajectory toward 100% (or residual levels). Delivered through investment in generation or contracts — power purchase agreements, contracts for difference, renewable energy certificates — subject to age and same-system (deliverability-region) rules.
When to use
The default route for purchased electricity.
Scope 2 · Route 2 (+ trigger)

Absolute emissions reduction

What it is
A straight-line cut in absolute scope 2 emissions — the same logic as scope 1 absolute reduction.
How it's calculated
Linear contraction applied to base-year scope 2 emissions. Required for heat, steam and cooling; and required for Category A where electricity consumption is set to grow by more than 20% over the cycle (LCE alignment optional alongside).
Hourly matching
Hourly matching of supply to consumption is preferred; significant electricity users must report the low-carbon share matched on an hourly basis, and can earn SBTi recognition for it.

Scope 3 — three archetypes, explained

You first identify significant categories — any category individually at 5% or more of total scope 3 (categories 1–14). Activities with no practical influence, or below the threshold, may be excluded. You then cover the significant ones using one or a combination of three archetypes.

Scope 3 · Archetype 1

Overarching absolute emissions reduction

What it is
A single target across the scope 3 boundary, cutting absolute emissions to a residual level (~10%) by 2050 or sooner.
How it's calculated
Linear contraction of in-boundary scope 3 emissions from the base year, on a sector or cross-sector pathway.
Scope 3 · Archetype 2

Overarching supplier / customer alignment

What it is
A target to reach a growing share of tier-1 suppliers and/or customers that are "in-transition" or net-zero aligned.
How it's calculated
Measured as the % of suppliers/customers (by emissions or spend) that hold qualifying science-based targets, rising over time toward the net-zero year.
Scope 3 · Archetype 3

Category- or activity-specific

What it is
Tailored targets for concentrated or high-emitting categories, allowing different sub-methods for upstream vs downstream emissions.
Sub-methods
Absolute or intensity reduction · supplier alignment · volume/commodity alignment · transport alignment · product use-phase alignment · product end-of-life (circularity) alignment · customer alignment.
How it's calculated
Depends on the sub-method — e.g. commodity alignment increases the share of lower-carbon or net-zero-aligned purchased commodities; product use-phase alignment increases the share of low-carbon products sold.
Worked example

A logistics firm sets its scope 1 fleet target by asset transition (planned vehicle phase-out), an LCE-alignment target for its warehouses' electricity, and — finding purchased goods and downstream transport each exceed 5% of total scope 3 — a supplier-alignment target for goods and a transport-alignment target for distribution. Categories under 5% are excluded.

V1 → V2 scope-1 methods (direct quotes) & references
Version 1.3.1Version 2.0
“Absolute Contraction Approach (ACA); Sectoral Decarbonization Approach (SDA) if applicable.”Transition Guide, p.15 (Table 3) “Asset transition targets with a trajectory defined by an Asset Decarbonization Plan…”Transition Guide, p.15 (C10–C11)
Full method detail: CNZS V2.0 C10–C14 · scope-3 archetypes in the How-To flowchart: SBTi How-To flowchart

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