Net zero target setting with SBTi: base year, scopes and V2.0 timing
Net zero target setting means choosing a base year, setting near-term reduction targets for Scope 1, 2 and 3, and committing to a long-term net-zero year no later than 2050, with residual emissions neutralised. Most companies use the Science Based Targets initiative (SBTi). In 2026 targets are validated under Corporate Net-Zero Standard V1.3.1; V2.0, published in June 2026, opens for validation on 1 February 2027 and becomes mandatory for new submissions from 1 February 2028.
What science based targets are
A science based target is an emissions reduction target consistent with the pace that climate science says is needed to limit warming — 1.5°C for Scope 1 and 2 under the SBTi's criteria. The SBTi publishes the criteria, sector guidance and tools, and validates company targets through its validation service. Being validated lets a company say its targets are science based, which customers, investors and lenders increasingly ask about.
Targets only work if the inventory beneath them is sound. If you are starting out, read Scope 1, 2 and 3 emissions explained first.
Which SBTi standard applies in 2026
- Corporate Net-Zero Standard V1.3.1 (criteria effective 14 April 2026) is the version used for validation through 2026. Submissions under it, and under the Near-Term Criteria V5.3, remain open until 31 January 2028.
- Corporate Net-Zero Standard V2.0 was published on 11 June 2026. Validations under V2.0 open on 1 February 2027. Between then and 31 January 2028 companies can choose either version; from 1 February 2028 all new submissions must use V2.0.
- Existing validated targets do not need to be updated immediately, but they remain subject to the SBTi's review rules, including a mandatory five-year review. Once a review or new target is due after 31 January 2028, V2.0 is the only option.
The SBTi's own advice: companies setting targets in 2026 should use V1.3.1, and those planning updates in 2028 or later should prepare for V2.0.
Base year
The base year is the reference against which reductions are measured.
- V1.3.1: the base year can be no earlier than 2015. Choose a recent year with complete, verifiable data that represents normal operations.
- V2.0: the base year is the most recent year with comprehensive emissions and other data, chosen afresh for each target cycle.
- Recalculation: under V1.3.1, a change of 5% or more in total base-year emissions — from acquisitions, divestments or methodology changes — triggers a recalculation.
A base year with gaps or estimates you cannot defend will cause problems at validation and at every later review. Keep the inventory versioned and evidenced.
Near-term vs long-term targets
| Near-term | Long-term | |
|---|---|---|
| Timeframe (V1.3.1) | 5 to 10 years from submission | Net-zero year no later than 2050 |
| Timeframe (V2.0) | 5 years from submission | Net-zero year no later than 2050 |
| Ambition | Scope 1 and 2 aligned with 1.5°C; Scope 3 at least well below 2°C (V1.3.1) | Reduce to a residual level consistent with 1.5°C pathways |
| Residual emissions | — | Neutralised with permanent removals by the net-zero year |
Near-term targets drive action this decade. The long-term target defines the end point, and the gap between them is the decarbonisation pathway you will track each year.
Scope coverage rules
Scope 1 and 2
- V1.3.1: targets must cover at least 95% of combined Scope 1 and 2 emissions.
- V2.0: 100% of Scope 1 and 100% of Scope 2, with separate targets for each. Scope 2 targets can be set on emissions or on the share of low-carbon electricity. See location-based vs market-based Scope 2.
Scope 3
- V1.3.1: a Scope 3 target is required when relevant Scope 3 emissions are 40% or more of total Scope 1, 2 and 3. Near-term targets must cover at least 67% of Scope 3, and long-term targets at least 90%. Supplier or customer engagement targets can count towards near-term coverage.
- V2.0: the 67% rule is replaced. Every significant Scope 3 category — 5% or more of total Scope 3 — must be addressed, with limited exclusions where the company has no practical influence. Near-term Scope 3 targets are required for Category A companies (broadly, larger companies); Category B companies (broadly, smaller ones) are not required to set them. Check the standard for the category thresholds. Options include absolute reductions, raising the share of suppliers or customers with science based targets, and category-specific targets.
In practice, Scope 3 targets depend on supplier data. Start early with the suppliers behind your largest categories; see supplier engagement for Scope 3 data.
FLAG and financial institutions
Forest, land and agriculture (FLAG)
Under V1.3.1, companies must set separate FLAG targets if FLAG emissions are 20% or more of total emissions, or if they operate in specified sectors such as food production, food and beverage processing, food and staples retailing, forest and paper products, and tobacco. Near-term FLAG targets must cover at least 95% of FLAG Scope 1 and 2 and at least 67% of FLAG Scope 3 emissions, using the FLAG guidance and tool.
Banks, investors and insurers
Financial institutions use separate SBTi frameworks. The Financial Institutions Net-Zero Standard (FINZ) V1.0, published in July 2025, covers lending, investment, insurance underwriting and capital-markets activity. The Financial Institutions Near-Term Criteria V2 remains available alongside it. Both rely on measured financed emissions; see our PCAF guide.
How to set a net-zero target: step by step
- Complete a full inventory for Scope 1, 2 and all relevant Scope 3 categories.
- Choose the base year and document recalculation rules.
- Model the pathway using the SBTi tools for your sector and version.
- Set near-term targets for each scope and check coverage rules.
- Set the long-term target and plan for neutralising residual emissions.
- Build a transition plan listing reduction levers, owners, capital and timelines.
- Submit for validation, publish, and report progress every year.
How EKOTRACE helps
EKOTRACE holds a versioned GHG inventory for Scope 1, 2 and all 15 Scope 3 categories, with maker-checker approvals and evidence, so the base year stands up to validation and audit. Its targets and net-zero pathways module lets you set targets by scope, track progress against the pathway and see which sites, categories or suppliers are behind. Supplier data comes in through the supplier portal. Banks and investors can set portfolio targets using financed emissions from EKOFIN. See also GHG accounting.
Frequently asked questions
Should we use SBTi V1.3.1 or V2.0?
If you are submitting in 2026, use V1.3.1, because V2.0 validations only open on 1 February 2027. Between February 2027 and January 2028 you can choose either version. From 1 February 2028 all new submissions must use V2.0.
What is the difference between near-term and long-term science based targets?
Near-term targets cover the next 5 to 10 years under V1.3.1, or 5 years under V2.0, and set the pace of reductions now. Long-term targets set the net-zero year, no later than 2050, and the residual level to be neutralised with removals.
Can carbon credits count towards an SBTi target?
No. Credits do not count as reductions towards science based targets. Removals are used to neutralise residual emissions at net zero, and V2.0 recognises funding of mitigation beyond the value chain separately from target progress.
When must Scope 3 be included in an SBTi target?
Under V1.3.1, when relevant Scope 3 emissions are 40% or more of total emissions. Under V2.0, larger (Category A) companies must address every Scope 3 category that is 5% or more of total Scope 3.