SBTi Updates Net Zero Standard with New Supply Chain Focus

SBTi is refining its approach to corporate climate action and a key part of that is tackling the complexities of Scope 3 emissions – the indirect emissions produced across a company’s value chain.

These emissions are often the hardest to measure and reduce, yet they typically account for the majority of a business’s carbon footprint. The draft standard introduces new measures to help companies address these emissions, alongside a focus on climate finance and accountability.

Tracy Wyman, Chief Impact Officer at SBTi, previously stated: "Reaching net zero is never going to be straightforward. But the guidance to get businesses there should be." With this draft, the organisation aims to make those pathways clearer while maintaining scientific credibility."

Tackling Scope 3 emissions across supply chains

Scope 3 emissions include everything from raw material extraction and transportation to product use and disposal.

For many companies, these emissions make up more than 70% of their total carbon footprint, yet they often fall outside direct control. This challenge is one of the biggest barriers to effective net-zero commitments, with more than half of businesses surveyed by SBTi identifying it as their top concern.

The updated standard introduces a more flexible approach, allowing businesses to focus on emissions-intensive suppliers and activities rather than solely pursuing absolute emissions reductions.

Companies will be able to set targets based on procurement strategies, such as purchasing low-carbon materials and revenue models that favour sustainable goods and services. The aim is to make Scope 3 reductions more achievable without compromising ambition.

This change reflects an understanding that supply chains are complex and highly interdependent. By prioritising action where businesses have the greatest influence, SBTi hopes to drive systemic reductions across industries.

Carbon removals and investment beyond direct emissions

Another major change in the draft standard is the formal recognition of Beyond Value Chain Mitigation (BVCM). This refers to corporate investments in climate initiatives that go beyond their direct emissions reduction obligations.

Companies will be encouraged to fund carbon removal projects, such as reforestation and direct air capture, as part of their transition plans.

Additionally, interim carbon removal targets will be introduced, providing a structured approach to addressing residual emissions. While direct emissions reductions remain the priority, these new provisions acknowledge the role of climate finance in achieving long-term net-zero goals.

SBTi’s framework aims to integrate carbon removals without allowing companies to rely on them as a substitute for cutting emissions at source. This aligns with growing regulatory pressure to ensure businesses take meaningful action rather than using offsets as an easy way out.

Strengthening accountability and global participation

To ensure companies follow through on their commitments, the draft standard includes stronger accountability measures.

Businesses will need to assess and report their progress against targets, improving transparency for investors, customers and regulators. This reporting framework is designed to make it easier to compare corporate climate action across industries.

Francesco Starace, Chair of SBTi, highlights the importance of the update: “The draft standard addresses complex, emerging issues and lays the foundation to enable more companies to move further and faster towards net zero.”

For businesses in emerging markets, SBTi is proposing simplified requirements to encourage participation. Small and medium-sized enterprises (SMEs), in particular, often face challenges in setting and tracking net zero goals due to limited resources.

By reducing complexity, SBTi hopes to make it more feasible for a wider range of businesses to engage with science-based targets.

“The draft standard reflects lessons drawn from thousands of businesses worldwide,” adds Alberto Carillo Pineda, Chief Technical Officer at SBTi.

“The public consultation will help us identify the changes we can make to ensure SBTi’s revised standard creates impact at scale as effectively as possible.”

The consultation period runs from 18 March to 1 June 2025, inviting feedback from businesses, policymakers and other stakeholders.

Their input, alongside expert reviews and pilot testing, will shape the final standard, which is expected to be finalised in June.

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