By
Director of Climate Science & Impact
Edited: 11 Dec 2025
15 min read
In November, the Science Based Targets initiative (SBTi) released its Second Consultation Draft of its Corporate Net-Zero Standard V2, representing one of the most significant evolutions of the framework to date.
The SBTi’s consultation survey regarding the Second Consultation Draft was open for response until 12th December 2025. Ecologi responded to the consultation in full.
This article provides a high-level summary of how we responded to the consultation, as well as our assessment of implications for our business community if the Standard were to be adopted as-is.
What we welcome in the V2 Draft
A broadly stronger, more accountable framework
We welcome the general trajectory of the Draft, and we see it as a broad improvement in the robustness, credibility and accessibility of science-based targets for businesses.
We support the proposed updates from one-off target validation to cyclical validation every five years, annual progress reporting, spot checks, and mandatory transition plans with board sign-off.
The draft text substantially raises the bar for accountability against the targets that businesses are setting and resolves a number of existing loopholes and ambiguities to make the V2 Standard more robust and credible than the current V1.3.
Flexibility and realism in approaching corporate decarbonisation
We welcome several updates across the draft Standard which reflect real-world complexities for corporate emissions reduction, and which present a more credible, flexible approach:
Flexibility within Scope 1 via Asset Decarbonization Plans allows for stepped, asset-driven Scope 1 reductions aligned with technological readiness and capital cycles - rather than unrealistic linear declines.
Tighter Scope 2 rules, including regional deliverability, facility age limits, and pathways to hourly matching improve the credibility of renewable electricity claims and are likely to drive further investment in new renewable electricity generation and storage.
More flexible Scope 3 tools, including the concept of activity pools, and allowances for use of EACs with strict integrity guardrails, which will support decarbonisation even in some cases where companies have limited influence (though may produce administrative costs).
Annual review of companies’ progress against their Science-Based Targets – no longer allowing businesses to adopt a ‘set and forget’ mindset.
Incentive scheme for Ongoing Emissions Responsibility
We welcome the introduction of recognition tiers for contributing to climate projects (an evolution of the category formerly called ‘BVCM’), the comply or explain obligation, and the embedding of OER within the Standard itself. These changes will create new incentives for companies to support climate action beyond their value chains.
Additionally we welcome the inclusion within OER of both Mitigation Impact Contributions (‘MICs’, where contributions are reported in tCO2e) and Climate Finance Contributions (where contributions are reported in units of currency).
We believe this clarifies that the different kinds of mitigation contributions which are required may be either easy or difficult to quantify in terms of CO2e – but that each is valid under the framework. It also reinforces that businesses should consider their funding of projects under OER as contributionsrather than compensation. We have been arguing in support of this for a number of years.
Our feedback on the OER model
Our main feedback relating to the Second Consultation Draft related to the design of the Ongoing Emissions Responsibility (‘OER’) module.
We stress that we acknowledge and appreciate that the SBTi specifies that this section is expected to evolve further, including as informed by the outcomes from this consultation.
1. Accessibility of the OER model
The OER framework, whilst providing new incentives to participate, presents a lot of complexity, ambiguity and optionality which could make it inaccessible to many businesses.
Under the current Draft, companies (already split into Category A and Category B, with differing obligations for each) must choose: between recognition tiers; between options for ex-post mitigation and/or carbon pricing (within Recognised only); what percentage of their emissions to apply their OER to; which carbon prices to apply; and of course what kinds of projects they intend to support.
There are expected to be different obligations (though not yet finalised) from 2035 to the net-zero year, and in the net-zero year and beyond. And businesses will also need to adapt to the new proposed blend of removals with durable storage (≥41% of residual emissions at the net-zero year, against ≤59% short-lived removals) for neutralisation of residual emissions beyond the net-zero date.
Whilst we welcome the introduction of the OER model and incentive scheme, we recognise that this level of complexity, optionality and ambiguity will present a challenge for SMEs in particular.
2. Urgency, ambition and carbon removal gaps
Climate finance needs to scale up enormously to meet our current crisis – with recent figures from the UN Environment Programme citing a need for quadrupling of finance by 2030 for nature restoration alone.
The current OER design codifies vital integrity principles for businesses for their contributions, but it allows for a low minimum level of commitment to climate projects beyond the value chain. A distinct but related effect from this is that the low level of ambition required to meet the Standard may not stimulate the multi-gigatonne-scale deployment of carbon removals which is required to minimise 1.5ºC overshoot.
To illustrate, our understanding is that:
Participating in OER is not mandatory for anyone until 2035, and thereafter is only mandatory for Category A businesses.
After 2035, for those businesses mandated to comply, compliance can be achieved with potentially as little as 1% coverage of ongoing emissions (NB: the figure for coverage of ongoing emissions at 2035 is currently denoted in the Draft by ‘[x]’, where [x] is an undefined constant – though a footnote specifies that [x] could be as low as 1% of all scopes, rising linearly to 100% by 2050).
Neutralisation of residual emissions at the net-zero year can include up to 59% short-lived removals – a significant relaxation from the previous expectation of 100% durable removals.
There is no requirement or guidance relating to a ramp-up of durable removals prior to 2035 (for Category A) or the net-zero year (for Category B) – such as the one set out by the Oxford Principles for Net-Zero Aligned Carbon Offsetting.
We believe this presents significant risk of underinvestment in removals from now to 2035, followed by sharp spikes in demand around common net-zero target years (e.g. 2045, 2050).
Taken together, our interpretation of the OER chapters in the Second Consultation Draft is that the minimum ambition for compliance would be as follows:
Category A businesses:
No contribution until 2035;
In 2035, minimum coverage at ([x] =) 1% of all scopes, blended removals;
Linear increase in coverage until coverage is at ([x] =) 100% of all scopes, for neutralisation at net-zero year (≤10% of baseline);
Linear increase within portfolio of durable removals, until durable removals reaches ≥41% by net-zero year;
At net-zero year and beyond, neutralisation can continue to include ≤59% short-lived removals.
Category B businesses:
No contribution until net-zero year (<2050);
Neutralise 100% all scopes at net-zero year (≤10% of baseline);
At net-zero year and beyond, neutralisation can continue to include ≤59% short-lived removals.
Businesses faced with difficult economic realities are likely to opt for the lowest permissible commitment to meet the Standard.
Since the minimum permissible commitment is very low, there are significant ambition and carbon removal gaps, limiting the viability of scaling corporate finance for climate and nature solutions, and significantly stifling the availability of high-integrity carbon removals to meet rising demand.
3. Feasibility and lack of technical justifications
In our response to the consultation, we also sought clarity on the justifications for various clauses and requirements in the Draft. A few of these are collected here:
Clarification on the scientific evidence base which informs the Draft’s blanket requirement that vintages of credits for MICs and removal credits for neutralisation must be >2021.
An explanation of the justification for requiring ‘temporal consistency’, where the vintage of credits used must exactly match the emissions reporting period against which they are used.
Which considerations were taken regarding the practical and market challenges in requiring businesses to procure ex-post, Correspondingly Adjusted carbon removal credits given the current and projected size of the carbon removal market, and current and projected host country readiness.
Key signals for businesses
Integrate climate action into core business operations now
Critical requirements in the draft V2 Standard echo what we are seeing elsewhere at the moment – from recent government consultations, to new rules and norms in the private sector. That is: further and deeper requirements to integrate sustainability into your core business operations.
In particular, consider the draft requirement:
C1.5 Approval: The company’s net-zero ambitions shall be formally approved and adopted by the company’s highest governing body responsible for its strategic direction and public statements (e.g., the Board of Directors or equivalent), including agreement to embed this in commercial strategy.
In 2025, the reality for businesses is that sustainability is here to stay, and running a business at all means adhering to robust sustainability standards – which are embedded in the very foundations of the business itself.
Be prepared for the new Standard – but don’t panic
Whilst businesses need to pay close attention to the development of the Standard, the new rules have not been finalised or come into effect yet, and so our call is to prepare and adapt – but not to panic.
Here’s a timeline of next steps, according to the plan set out by the SBTi:
Mid-2026: the final SBTi Corporate Net-Zero Standard V2 is expected to be published.
31st December 2027: deadline for businesses to submit new targets under the current (V1.3) Standard.
1st January 2028: V2 Standard becomes compulsory.
So businesses must take action now which adapts to the broad direction of travel of the updated draft Standard – tighter rules, compulsory transition plans, purchasing durable removals, and so on – but recognise that the exact specifics are still being worked out.
Secure high-quality carbon credits early
The OER module of the draft Standard produces a number of first- and second-order effects, in particular on the procurement of carbon credits for use in OER and neutralisation at the net-zero date.
Due to the continued codification of integrity principles for the purchase and use of EACs and carbon credits, as well as the convergence of compliance schemes such as CORSIA and the Paris Agreement Crediting Mechanism, demand for high-quality credits and compliance-eligible credits will continue to increase, causing prices for these sought-after credits to increase as well.
In particular, if the V2 Standard were adopted as-is, then the new rules on the 41%-59% blend for neutralisation at the net-zero year would increase demand and prices for nature-based removal credits vs. previous expectations.
Supply for durable removal credits would likely decrease vs. previous expectations, because of watered-down obligations to buy these credits prior to the net-zero year. This means that when it’s time to use durable removal credits, they too might be more expensive than anticipated. That’s all the more reason to secure forward contracts today, rather than wait to participate in the spot market in 2035 and beyond.
Final thoughts
We believe the Second Consultation Draft of the V2 Corporate Net-Zero Standard represents a significant and meaningful step forward for credible corporate climate action. However, we do see room for improvement – in particular in relation to the Ongoing Emission Responsibility (OER) component.
Our intention in publishing this summary of our response to the current consultation is to support our business community to understand the potential implications of the current draft Standard, as well as to explain in a little more detail the feedback we gave in our own response to the consultation.
Ecologi’s role is to continue to help businesses navigate these emerging rules and norms, making sure all businesses are prepared for the new era of stricter rules, higher-integrity, science-aligned climate action.
Speak to the team
Want to talk through what the V2 Standard could mean for your business? Our team will continue to track developments in the SBTi consultation process and can support your business in preparing for the changes ahead. Whether you need support setting science-based targets or securing high-quality carbon credits before any potential price increases, schedule a call with our team to discuss how we can help you stay ahead of the curve.