SBTi’s Corporate Net-Zero Standard Version 2 is a milestone, but not because it changes the core message – reducing emissions is still the priority. What’s new is the Standard finally addresses a question businesses have been asking for a while: what do you do about the emissions still left while you’re getting to net zero?
That’s Ongoing Emissions Responsibility (OER). It starts from a simple observation – even an ambitious decarbonisation pathway keeps generating emissions for years – and says companies have some responsibility for those emissions along the way, not just for the destination.
We’ve been talking to businesses across sectors since the Standard came out. The technical detail matters, but conversations keep circling back to the same few questions: what does OER actually mean for us, does it change how carbon credits fit in, and where do natural climate solutions come into this. Here’s what we’re hearing most.
What’s actually changed?
Before Version 2, corporate climate strategy was mostly about reduction targets and a long-term net zero date. Version 2 adds a second track alongside that: keep reducing, but also take responsibility for what’s left in the meantime. OER doesn’t replace reductions or soften them – it sits next to them. The practical effect is that the conversation moves from “what’s our target” to “how are we actually delivering on it.”
Do carbon credits replace emissions reductions now?
No – the one thing worth remembering if you take nothing else from this piece. Deep reductions across operations and the value chain are still the foundation; that expectation hasn’t loosened. High-integrity credits sit alongside that work, not instead of it. Picture it this way: cutting emissions is turning off a tap. OER is about what you do with the water still flowing while your hand is on the valve.
Where do natural climate solutions fit?
They tend to do more than just remove or avoid emissions. A well-run forest protection or restoration project, done properly, delivers a real climate benefit alongside other core benefits – biodiversity, local livelihoods, more resilient ecosystems. Climate and nature aren’t really separate problems; the systems that regulate climate often hold up supply chains and communities too.
SBTi’s definition of “verified mitigation outcomes” – what companies can count toward OER – specifically includes protecting, restoring, and enhancing natural carbon sinks, alongside reductions and removals. Project types like REDD+ are eligible on this basis, provided they meet the Standard’s integrity criteria (more on this below).
One nuance worth knowing: From 2035, the mandatory responsibility requirement for large companies draws a line between long-lived (storage lasting centuries to millennia – arguably nature’s speciality longer than any technology’s) and short-lived removals (storage measured in decades, with real reversal risk from fire, disease, or land-use change – where most nature-based removals sit today). The Standard calls for a growing share of long-lived removals specifically, but that line isn’t necessarily fixed: SBTi has flagged a forthcoming Call for Evidence on whether shorter-lived removals could satisfy the requirement through contractual or financial durability mechanisms, and the post-2035 criteria are explicitly slated for review before they take effect.
So the practical read is that natural climate solutions have a genuinely stronger footing in V2.0 than before, and their role in long-term neutralization isn’t necessarily closed – but until that Call for Evidence resolves, the safer planning assumption is a mixed portfolio of credit types.
How can companies meet OER?
The Standard recognises that companies can contribute to climate mitigation in different ways. It introduces two pathways for addressing ongoing emissions: one centred on verified mitigation outcomes and another that supports broader climate action through a contribution budget.
The right approach will depend on a company’s strategy and objectives, but the principle is the same: companies should continue reducing emissions while also considering how they contribute to climate action beyond their value chain.
Do I need to switch to Version 2.0 right away?
Not immediately. Version 1.3.1 remains open for now, and existing near-term targets stay valid until the end of their timeframe. But from 1 February 2028, all new target submissions must align with Version 2.0 – worth planning for now if your next cycle lands anywhere near that date.
Does this change how we set Scope 3 targets?
Yes, in structure if not in spirit. Companies choose from an overarching absolute target, a supplier/customer alignment target, or category-specific targets – and can combine these. What’s new is the boundary: companies must now cover every Scope 3 category representing a meaningful share of emissions, not just the easy ones.
What counts as a “high-integrity” credit?
The Standard doesn’t endorse specific crediting programmes. Instead, it defines a set of minimum integrity criteria for verified mitigation outcomes, covering areas such as governance, robust quantification, additionality, reversal risk, third-party assurance and regulatory surplus. These criteria are designed to build on the significant progress already made across the wider carbon market ecosystem, rather than replace them. For natural climate solutions, that also means checking the project delivers for nature and local communities, not just a tonne count.
Should businesses wait for more clarity before acting?
No. Some open questions e.g. how legacy credit portfolios count toward OER, how validation bodies will assess “substantial progress,” the finer points of Scope 3 supplier accounting, don’t have public answers yet, and more guidance is coming. That’s a reason to start preparing, not to sit still: the companies best placed when guidance lands will be the ones who’ve already done the groundwork.
| Act now | Prepare now | Watch closely |
|---|---|---|
| Keep delivering on emissions reductions | Build internal understanding of what OER means for your business | Future SBTi implementation guidance |
Brief leadership on where ongoing emissions sit in your climate strategy | Map how procurement, finance, legal and sustainability would work together on this | Emerging guidance on recognition and claims |
Talk to peers on what’s working | Review governance and decision-making for credit use | Continued market developments |
Looking ahead
For a lot of businesses, whether climate action is needed stopped being the question a while ago – that got settled when they set a science-based target. What’s open now is how to handle the emissions still in the system while that plan plays out, credibly and without getting ahead of the science.
NCSA will keep working through this with businesses, policymakers, and market experts as the guidance settles – through peer learning, practical guidance, and the unglamorous work of cross-sector coordination. The aim: help companies use high-integrity credits, especially from natural climate solutions, to back up real reductions rather than stand in for them.
Outline
