SBTi’s New Draft Brings Carbon Removal Into Corporate Planning

A major update from the Science Based Targets initiative (SBTi) could reshape how companies plan their climate strategies. On 18 March, SBTi published a draft revision of its Corporate Net-Zero Standard—Version 2—and opened it for public consultation through 1 June.

An office scene seen through green plants, with employees and a speaker addressing a team. AI generated picture.

This proposed standard introduces clearer rules around carbon dioxide removal (CDR) and how businesses can address emissions more effectively across different scopes. For the first time, the framework formally integrates CDR into net-zero targets, offering companies structured options for dealing with the emissions they can’t fully eliminate.

Ben Rubin, Executive Director of the Carbon Business Council, explained: ‘This approach builds upon the neutralisation concept introduced in Version 1.0 of the SBTi Corporate Net-Zero Standard... These targets progressively increase the volume of removals over time at a rate consistent with reaching 100% of residual emissions being matched by a corresponding level of removals at the net-zero target year.’

The draft outlines three pathways for integrating removals. One option requires companies to set near- and long-term targets to cover any leftover emissions. Another recognises companies already doing this. In every case, the removals must meet defined durability standards—either static or increasing over time.

Not everyone is convinced. Climate policy expert Robert Höglund raised concerns about the narrow focus: ‘The just-published draft SBTi Net Zero standard is unlikely to significantly increase demand for CDR... A Scope-1 only requirement means few companies are likely to buy CDR, and net zero fulfilments would be jeopardised.’

Höglund’s comments highlight a common industry challenge. While Scope 1 emissions—those from a company’s own operations—are directly addressed in the draft, Scope 3 emissions remain more flexible. Instead of mandatory cuts, the proposal suggests aligning with suppliers or setting targets for greener procurement and revenue generation in high-emission sectors.

The draft also addresses Scope 2 emissions, calling for a full switch to low-carbon electricity by 2040.

To increase global participation, especially in developing regions, SBTi has tailored requirements for SMEs and businesses in emerging markets. There’s also a new focus on tracking progress and making results public—an attempt to reward climate leaders and improve transparency.

Margaret Kim, CEO of Gold Standard, welcomed the move: ‘We welcome SBTi’s focus on ongoing emissions and beyond value chain mitigation... Gold Standard remains committed to linking ambition to action, through market mechanisms that deliver verified impact for both people and the planet.’

Companies already using the previous version of the standard will be supported with a clear path to transition once the final guidance is published.

With carbon removal taking center stage and new expectations on accountability, this draft could mark a turning point—depending on how companies respond and how the final rules take shape.