SBTi updates net-zero standard to allow carbon credits in corporate climate targets

The U.K. Science Based Targets initiative (SBTi) has released a revised corporate net-zero standard that allows companies to include specific environmental credits and carbon-removal measures in their climate strategies. This marks one of the organization’s most significant policy changes since the introduction of its corporate framework.

Under the updated rules, companies can count market-based mitigation measures, such as sustainable aviation fuel credits and other environmental certificates, toward their net-zero strategies. Previously, SBTi required businesses to focus almost exclusively on reducing emissions within their own operations and supply chains. The nonprofit stated that the revised framework acknowledges some emissions are beyond a company’s direct control, but physical decarbonization should remain the primary objective.

The new standard permits companies to use carbon-removal technologies, such as direct air capture and reforestation projects, to neutralize residual emissions that are technically or economically impossible to eliminate. These measures may apply only from 2035 onward, after companies have taken all reasonable steps to reduce emissions through direct decarbonization.

SBTi stated that the revised framework adopts a “best-efforts” approach, requiring companies to set science-based targets, implement practical emissions reduction plans, and disclose where structural barriers limit further progress. Chief Executive David Kennedy said the standard aims to better align climate ambitions with business realities and to encourage continuous improvement rather than a one-time compliance exercise.

The organization decided not to require companies to adopt hourly electricity emissions accounting for target-setting, despite growing support from some environmental groups and academics. Instead, companies with significant electricity consumption, including technology firms, must disclose, on an hourly basis, the share of electricity matched with low-carbon power to improve transparency. SBTi also confirmed that power purchase agreements for renewable electricity will continue to help companies reduce emissions, especially where local renewable energy generation is limited.

Source: The Wall Street Journal