The new SBTi Net Zero Standard raises the floor. But who will raise the ceiling?

This month, the Science Based Targets initiative released its long-awaited Corporate Net-Zero Standard v2.0. The previous standard, released in 2022, became one of the most influential and widely used standards for corporate target-setting, with more than 2,600 validated net-zero targets. For all its influence, it left a crucial question unanswered: how companies would actually implement those long-term pledges. 

The new standard goes some way towards answering that question. By strengthening expectations on near-term targets, transition planning and transparency, it raises the floor for corporate climate action. The harder question is whether it also raises the ceiling: can SBTi and the wider accountability ecosystem distinguish genuine climate leaders from companies meeting minimum requirements?

The shift in focus from pledges to action is most evident in the new requirements for implementation. Companies now must set near-term climate targets along their entire value chains, publish transition plans, and explain how they intend to deliver them. The emphasis has shifted from distant net-zero claims to near-term action. 

This is a welcome development. Corporate climate accountability to date has too often rewarded headline ambition without sufficiently scrutinising delivery. 

At the same time, the new standard introduces a worrying degree of flexibility. Flexibility is not inherently problematic – companies after all operate in different sectors and value chains. The problem arises, however, when similar companies can choose target types that imply very different levels of ambition, transparency and integrity, yet still receive the same validation.

Take, for example, companies’ scope 3 emissions from their upstream and downstream value chains. Some companies in a sector may target absolute emissions reductions. Others may rely on ambiguous supplier engagement targets that are much harder to evaluate. Others may use transparent activity-specific targets. All could receive the same validation.

As a result, investors, customers, policymakers and civil society may find it harder to understand, compare and use SBTi’s validations in practice. 

As the world’s largest validator of corporate climate targets, SBTi and its validations play an important role in signalling corporate climate accountability. If companies with fundamentally different approaches receive the same validation, the signal becomes weaker precisely when markets need clearer ways to identify and reward those genuinely leading the transition. 

The example of fashion companies H&M Group and Shein illustrates this problem. Under the previous standard, Shein received a 1.5°C validation by SBTi for both its 2030 and 2050 targets. This places the ultra-fast fashion company in the same category as H&M. Yet the integrity of their climate strategies differs substantially.

H&M Group has backed up its target to cut GHG emissions by 56% by 2030 with a parallel commitment to source 100% renewable electricity across its full supply chain. Last year, it also became the first major fashion brand to disclose detailed information on supply chain energy use.

Shein, by contrast, has limited its 100% renewable energy commitment to its own operations, even though around 95% of its emissions occur in its value chain. Its 2030 target also leaves room for emissions to more than double compared with 2021 levels.

The question is, will the new standard prevent similar such outcomes in future? The risk is that it may not. The danger of a high degree of flexibility is that SBTi becomes better at mobilising participation than at differentiating the quality of companies’ transition strategies.

Broader participation and momentum matters. But as the societal transition accelerates, participation alone is no longer enough. The accountability system must move from mobilisation towards genuine leadership, incentivising and rewarding ‘good practice’ across sectors. 

A science-informed standard should do exactly that: distinguish companies pursuing genuinely transformative climate strategies from those merely meeting minimum requirements.

In this context, the new standard should be understood as a foundation for enhanced corporate climate accountability, not its finish line. It raises the floor for corporate climate action and marks a more sophisticated understanding of what credible implementation requires. Yet it does not raise the ceiling by clearly distinguishing minimum compliance from emerging good practice. Without that differentiation, companies investing in more ambitious and transformative action may receive little additional recognition.

The next steps by SBTi and the wider accountability system thus might be crucial. The forthcoming update of SBTi sector standards provides an opportunity to close this leadership gap. Sector-specific criteria can better reflect the realities of different industries. Alongside this, SBTi or other accountability initiatives could introduce a complementary 'gold standard' recognition to reward companies that move first, invest in their sector’s transition earlier and go beyond the baseline. 

The first era of corporate climate accountability succeeded in getting thousands of companies onto the track. The next must be about making the front-runners impossible to miss.

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A version of this article was originally published here on Sustainable Views on the 1st July 2026.

Frederic Hans is a senior climate policy expert at NewClimate Institute, an independent non-profit organisation based in Germany. NewClimate’s mission is to raise the ambition for climate action and support sustainable development through research, policy advice and knowledge sharing. He co-leads the publication of NewClimate’s annual Corporate Climate Responsibility Monitor in collaboration with Carbon Market Watch, assessing the transparency and integrity of corporate climate strategies of major multinational companies to improve the corporate climate accountability system. Since 2025, he serves as a member of the Science Based Targets initiative’s Expert Working Group on Scope 3.