Net zero targets and science-based targets

A net zero target is a promise to bring a company's greenhouse gas emissions down as far as possible and balance what is left with permanent removals. Thousands of companies have made such promises. Some have detailed plans, budgets and interim milestones. Others have a distant date and little else.

Science-based targets try to make these promises comparable. A target is "science-based" if it is consistent with what climate science says is needed to limit warming in line with the Paris Agreement. The Science Based Targets initiative (SBTi), set up in 2015 by CDP, the UN Global Compact, the World Resources Institute and WWF, checks and validates company targets against its criteria.

For analysts, a credible target is useful information: it signals likely capex, shows how management sees transition risk, and creates a commitment that investors and lenders can track. An empty target is a reputational and legal risk.

Types of targets

• Near-term targets: usually five to ten years out, covering Scope 1 and 2 and, where material, Scope 3
• Long-term or net zero targets: typically by 2050 or earlier. Under the SBTi's earlier net zero standard, this meant cutting emissions by at least 90% for most sectors and neutralising the rest with permanent removals.
• Absolute targets: a cut in total tonnes of emissions
• Intensity targets: a cut in emissions per unit of output or revenue. These can be met while total emissions still rise, if output grows fast enough.

The SBTi's Corporate Net-Zero Standard, version 2

The SBTi published version 2 of its Corporate Net-Zero Standard in June 2026. Companies can keep using the older version for a transition period, with version 2 becoming mandatory for new targets from early 2028. Key changes:

• Company categories: Category A (large companies, and medium-sized companies in high-income countries) and Category B (small companies, and medium-sized companies in lower-income countries), with different requirements
• Scope 1: targets must cover all direct emissions, with options for absolute, intensity or asset transition targets
• Scope 2: set separately from Scope 1, covering all purchased energy, using location-based reporting; companies can set emissions targets or targets for the share of low-carbon electricity
• Scope 3: more flexible ways to show progress, including the share of suppliers or customers that are on a transition path
• Carbon credits: high-integrity credits can complement direct reductions, but not replace them

A credibility checklist

1. Does the target cover Scope 1, 2 and the material Scope 3 categories?
2. Is there a near-term target, not just a 2050 or 2070 date?
3. Is the base year recent and representative?
4. Is it absolute or intensity-based, and what does that imply for total emissions?
5. How much depends on carbon credits or offsets?
6. Is there a capex plan and a named list of projects?
7. Is the target linked to executive pay?
8. Has it been validated by the SBTi or another independent body?
9. Is progress reported every year against the same base?