SBTi is changing: What businesses should know
What the new Corporate Net-Zero Standard means for your carbon targets
The Science Based Targets initiative (SBTi) is changing how businesses set carbon reduction targets – and how they show they’re making progress.
Its new Corporate Net-Zero Standard introduces tougher requirements around target setting, progress and renewable electricity. For large businesses in particular, that means getting much more detailed about their energy – including where their renewable power comes from and how closely it matches their electricity use hour by hour.
And SBTi isn’t changing in isolation. It’s part of a wider shift towards more granular carbon reporting, with the Greenhouse Gas Protocol also reviewing how businesses report their Scope 2 emissions.
So, what’s changing under SBTi V2.0, when will it affect your business and what should you be doing now?
What is the SBTi, and what is changing in Version 2.0?
The Science Based Targets initiative (SBTi) helps businesses set carbon reduction targets in line with climate science.
Businesses measure their greenhouse gas emissions, set targets for reducing them and submit those targets to SBTi for validation. Until now, businesses have typically set near-term targets looking five to ten years ahead, alongside a longer-term target to reach net zero by 2050 at the latest.
SBTi published Version 2.0 of its Corporate Net-Zero Standard in June 2026, changing how businesses set targets and demonstrate their progress. Here are four of the biggest changes:
1. Businesses will fall into two categories
Businesses will be classed as Category A or Category B, with different requirements for each. Broadly, Category A covers larger businesses, while Category B businesses have fewer requirements.
We’ve explained exactly how to work out which category your business falls into in the FAQs below.
2. Targets will work in five-year cycles
Currently, businesses can set near-term targets covering five to ten years.
Under V2.0, businesses will instead work through five-year cycles. At the end of each cycle, they’ll assess their progress and set new targets for the next five years. Category A businesses will also need an independent third party to assure their progress assessment.
3. Scope 3 targets are changing
Scope 3 covers indirect emissions across a business’s value chain – for example, from suppliers, business travel or customers using its products.
Under SBTi V2.0, Category A businesses will still need to set targets to reduce these emissions, but there will be more focus on the biggest sources and the areas where they can have the greatest influence. Scope 3 targets will still be optional for Category B businesses.
4. Electricity reporting is moving from annual to hourly matching
SBTi 2.0 puts far more emphasis on where and when the renewable electricity businesses use is generated.
Category A businesses will need to report their hourly electricity matching for any group of activities using 10 GWh or more electricity a year. They don’t need to achieve 100% matching, they just need to measure it and report on it.
SBTi isn’t alone in moving towards more granular reporting. The GHG Protocol is also reviewing its Scope 2 rules, with proposals to more closely match electricity use with renewable generation by time and location.
We’ve covered what those proposals could mean for businesses in our guide to the GHG Protocol Scope 2 reforms.
When does SBTi V2.0 come into effect?
Businesses can start setting targets under SBTi V2.0 from 1 February 2027.
The existing standard will remain available until 31 January 2028, giving businesses a year to transition.
From 1 February 2028, businesses submitting new targets will need to use V2.0.
If you already have validated SBTi targets, you don’t need to start again. They can continue through their current target cycle.
What do I need to do to keep my business on target?
You don’t need to overhaul your carbon strategy overnight. But it is a good time to understand how the changes could affect you. Start by:
- Checking whether you’re likely to be Category A or B, as this determines which requirements apply to you.
- Understanding your electricity use, including whether any of your activity groups use 10 GWh or more a year.
- Talking to your energy supplier. Ask where the renewable power backing your supply comes from, how closely it matches your consumption and whether they can provide hourly matching data.
How can Good Energy support my business’s carbon reduction ambitions?
One of the biggest changes under SBTi V2.0 is greater transparency around the renewable electricity businesses use.
At Good Energy, we already provide our large business customers with granular hourly matching data showing how their electricity consumption aligns with renewable generation in real time. This is auditable and downloadable for seamless carbon reporting, and we’re ranked #1 for hourly matching on the Matched Clean Power Index.
We can also help you generate more of your own electricity with on-site solar, or link your electricity supply to a renewable generator through a Corporate Power Purchase Agreement (CPPA).
Frequently asked questions about SBTi
They play different but closely connected roles.
The GHG Protocol provides standards for measuring and reporting greenhouse gas emissions, including Scope 1, 2 and 3 emissions.
The Science Based Targets initiative helps businesses set emissions reduction targets in line with climate science, using greenhouse gas accounting as the basis for those targets.
Put simply: GHG Protocol helps you measure your emissions. SBTi helps you set targets to reduce them.
Both are currently moving towards greater transparency around renewable electricity, including when and where it is generated.
Read more about the proposed GHG Protocol Scope 2 changes.
SBTi V2.0 is the latest version of the Science Based Targets initiative’s Corporate Net-Zero Standard.
It updates the way businesses set, deliver and assess science-based net-zero targets.
For UK businesses, Category A broadly covers larger companies and businesses with significant direct and energy-related emissions.
Your business may be Category A if it has:
10,000 tCO₂e or more of Scope 1 and 2 emissions
1,000 or more employees
annual turnover of €450 million or more
Smaller businesses can also fall into Category A depending on their turnover, balance sheet and number of employees.
SBTi will formally determine your category when you register, so check its full criteria if you’re unsure.
No. The 10 GWh threshold doesn’t determine whether you’re Category A or Category B.
Instead, it determines when Category A businesses need to report hourly electricity matching.
If a Category A business has an activity pool using 10 GWh or more of electricity a year, it will need to calculate and report how much of that electricity is matched with low-carbon generation on an hourly basis.
An activity pool is a group of activities or energy consumption that SBTi treats together when assessing a target.
That means the 10 GWh threshold isn’t necessarily based on your business’s total annual electricity consumption.
Annual renewable matching shows that enough renewable electricity has been generated over a year to cover a business’s overall electricity consumption. But it doesn’t show whether that renewable electricity was being generated when the business was actually using power.
Hourly matching gives a much clearer picture by comparing when a business uses electricity with when low-carbon electricity is being generated. This gives businesses greater transparency over their renewable electricity supply and helps identify the times when their consumption isn’t matched by low-carbon power.
In the longer term, this level of insight can also help businesses make smarter decisions about when they use, generate or store electricity – helping demand better align with renewable generation.
No. Category A businesses with large electricity loads will need to calculate and report how much of their electricity consumption is matched with low-carbon generation on an hourly basis. This applies to areas of the business using 10 GWh or more of electricity a year.
But there’s no requirement to achieve 100% hourly matching. The aim, for now, is to improve transparency and give businesses a clearer picture of how closely their electricity use aligns with low-carbon generation in real time.
SBTi has also introduced an optional recognition programme for businesses that want to go further:
50% hourly matching until 2030
75% hourly matching until 2035
90% hourly matching from 2035 onwards
These are recognition thresholds, rather than minimum requirements for complying with SBTi V2.0.
