DATE
27.4.2026
AUTHORS
Dr. Florian Niedermeier
TOPICS
Climate management
Best Practices
Governance & regulation
Ratings & certifications
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What Companies Need to Know Now About the New SBTi Targeting Framework
In April 2026, the Science Based Targets initiative (SBTi) published a methodological update that, at first glance, appears to be purely technical—but in practice could have significant implications for corporate targets, decarbonization plans, and internal investment decisions.
Specifically, this involves calculating the minimum ambition level for absolute emissions reduction targets, particularly for Scope 1 and Scope 2. Until now, many target pathways have effectively been based on a standardized reduction pathway starting in 2020. For companies with more recent base years, this sometimes led to very steep reduction requirements by 2030. With the updated logic, the annual reduction path is now calculated more dynamically—depending on the base year, target year, and the remaining time until the net-zero path. The SBTi explains that the reduction rate is dynamically adjusted based on the time remaining until the net-zero year; for Scope 2, it is additionally assumed that electricity emissions will drop to zero by 2040.
For companies, this is not merely a technical footnote. In some cases, the minimum requirement may drop significantly—in others, it may rise. This is precisely why every organization that is currently preparing, submitting, or discussing SBTi targets internally should re-evaluate its target pathways.
What is the Science Based Targets initiative?
The Science Based Targets initiative is the leading international standard-setter for science-based climate targets for companies. It develops standards, criteria, tools, and guidelines that companies can use to set greenhouse gas reduction targets consistent with the goal of limiting global warming and achieving net-zero emissions by 2050 at the latest.
SBTi targets are relevant to companies because they do more than just serve as a means of establishing external credibility. They are increasingly influencing:
- Expectations of investors and banks,
- Requirements of major customers,
- ESG ratings and CDP assessments,
- internal investment decisions,
- as well as the logic behind climate transition plans under the CSRD and ESRS E1.
With over 10,000 companies with validated Science-Based Targets and more than 13,000 companies with targets or commitments, the SBTi is no longer a niche standard but a benchmark for corporate climate targets.
What has changed in the SBTi target calculation?
The crux of the change lies in the Absolute Contraction Approach (ACA), which is the method used to calculate absolute emission reduction targets.
Until now, a minimum requirement of a 4.2% linear reduction per year has often been used for Scope 1 and 2. For base years starting in 2020, this could lead to very steep reduction trajectories because the reduction was heavily compressed into the period up to 2030 or a nearby target year. In the updated version, 4.2% per year remains a key minimum target for Scope 1 and 2; however, a new feature is that the reduction rate is additionally dynamically linked to the time remaining until the relevant net-zero pathway.
This change is particularly relevant for Scope 2: As part of the calculation adjustment, the SBTi now assumes that Scope 2 emissions will be reduced to zero by 2040. For Scope 1, the assumption of at least a 90% reduction by 2050 or earlier remains in place. For combined Scope 1+2 targets, the target ambition is calculated using a weighted average reduction rate—based on the company’s Scope 1 and Scope 2 emissions profile in the most recent reporting year.
Before vs. After: The new logic in a nutshell
In the past, target calculations were more heavily influenced by a uniform reduction pathway, some aspects of which were planned to take effect starting in 2020. Now, the following question is coming more into focus:
How much time does the company have from its baseline year or most recent reporting year until it reaches the relevant net-zero pathway—and what is the minimum linear reduction rate that results from this?
This may sound abstract, but it is crucial in practice. This is because a company with a base year of 2025, a target year of 2031, and a net-zero target of 2045 may now arrive at a different minimum target than it would have under the previous logic. The SBTi further specifies in its criteria that near-term targets must cover a period of 5 to 10 years from the date of submission; the target year, base year, and most recent inventory are thus not merely formal details, but central parameters of the target’s ambition.
At a Glance: What Has Changed in the Logic of Goal Setting
How is an SBTi reduction pathway generally calculated?
For absolute targets, the basic logic is simple: A company defines a base year, calculates its emissions for that year, and sets a target period. It then calculates the minimum reduction in emissions required by the target year.
A simplified formula is:
Target reduction = annual reduction rate × number of years between the base year and the target year
Example based on logic that was commonly used in the past:
- Base year: 2020
- Target year: 2030
- Minimum discount for Scope 1 and 2: 4.2% per year
- Period: 10 years
- Target reduction: 42%
However, if the base year is 2025 and a company must nevertheless set a 2030 or 2031 target on very short notice, a rigid approach results in a steep trajectory. This is precisely where the updated SBTi approach comes into play: the reduction rate is dynamically adjusted based on how much time remains until the relevant net-zero pathway. The updated version continues to specify 4.2% per year for Scope 1 and Scope 2 and 2.5% for Scope 3 as a starting point, but supplements these with the dynamic adjustment.
Example: Why 46% can suddenly become 27%
A much-discussed real-world example: A company with a base year of 2025 and a target year of 2031 had a minimum Scope 1+2 ambition of around 46% under the previous calculation methodology . Under the updated methodology, the minimum ambition fell to around 27%.
The difference can be explained simply as follows:
- Old logic: Reductions were, in fact, measured more closely against a 2020-based target pathway.
- New logic: The reduction is calculated more heavily along the remaining path from the base year or most recent year to the net-zero year.
- Scope 1 and Scope 2 emissions can be weighted differently.
- Scope 2 may appear different from Scope 1 due to the 2040 net-zero target.
- Combined Scope 1 and 2 targets depend on the emissions mix.
Important: This does not mean that all targets will automatically become less ambitious. Companies that have already achieved significant reductions, have a high Scope 2 share, or choose an earlier net-zero year may still be assigned ambitious or even stricter target pathways.
Calculator: Simplified SBTi Target Path Guidance for Scope 1 and Scope 2
The following calculator is not a substitute for the SBTi Validation Portal and does not account for all official special cases. However, it demonstrates how significantly the base year, target year, net-zero year, and Scope 1/Scope 2 mix can affect the expected minimum ambition.
Why Scope 1 and Scope 2 emissions may diverge more significantly in the future
A key point of the update: Scope 1 and Scope 2 no longer necessarily follow the same calculation logic.
Scope 1 encompasses direct emissions from a company’s own facilities, vehicles, or processes. For these emissions, the core of the long-term net-zero approach remains a reduction of at least 90 percent by 2050 or earlier. Scope 2, on the other hand, refers to purchased electricity, heat, or cooling. Here, as part of its adjustment, the SBTi assumes that global electricity generation will be decarbonized by 2040. Therefore, Scope 2 reduction rates may be mathematically higher than Scope 1 rates.
This is particularly relevant for companies with a high proportion of electricity in their carbon footprint. The higher the Scope 2 share, the greater the impact the 2040 logic can have on the combined Scope 1+2 target.
Why the scope mix is becoming more important now
Why this change is strategically sensitive
The change may provide some short-term relief for companies. If a previously discussed target path was significantly more ambitious than the new minimum requirement, the question quickly arises internally:
Should we lower the target now?
From a consulting perspective, this is precisely the critical point. After all, meeting the SBTi’s minimum ambition does not automatically equate to a climate strategy that makes good business sense. If decarbonization measures already have a solid business case—for example, due to lower energy costs, reduced CO₂ price risks, less dependence on fossil fuels, or better chances of winning tenders—they should not be scrapped simply because the minimum requirement decreases on paper.
The better way to approach this change is therefore not: “How low can we go?”
but rather: What target is strategically, financially, and operationally sound—and how can we justify it clearly?
What companies should specifically review right now
Companies that are currently developing or planning to submit SBTi targets should not recalculate their targets in isolation, but rather review them in five steps:
What does this mean for companies just before the submission deadline?
This update is particularly relevant for companies that:
- have already agreed on ambitious internal goals,
- are about to submit their SBTi application,
- have already discussed their targets with management, finance, or operations,
- or have planned CapEx/OpEx measures based on previous target paths.
The SBTi criteria stipulate that targets must generally be modeled using the latest version of the approved methods and tools. Targets modeled using earlier versions of the tools or methods may only be submitted for validation within six months of the publication of the revised method or sector-specific tools.
This means that companies should not simply assume that the target pathways they have prepared so far can be submitted without any changes. At the same time, automatically lowering targets to the new minimum level is not always strategically sound.
Commentary by Dr. Florian Niedermeier: SBTi Update Has Strategic Implications
For Dr. Florian Niedermeier, an SBTi- and Net-Zero Standard-certified expert at Five Glaciers Consulting, the update demonstrates one thing above all: goal-setting and implementation must be considered more closely together.
The new calculation methodology can provide short-term relief for companies. However, it should not lead to the postponement of economically sound decarbonization measures. What matters is not just which target is still valid—but which pathway to that target remains strategically viable.
The key point is this: SBTi targets are effective only when they are not developed in isolation by the sustainability team, but are integrated into investment planning, energy procurement, production strategy, and supplier management. The latest SBTi update shows how sensitive corporate climate targets are to methodological changes. For many companies, the minimum ambition may decrease. For others, it may remain the same or increase in certain areas. In any case, the new approach changes not only Excel models but also internal discussions about feasibility, investments, and ambition.
Companies should therefore not view this change as an invitation to mechanically scale back their climate strategies. Rather, now is the right time to recalculate target pathways, conduct economic assessments of action plans, and strategically calibrate their own ambitions.
The key question is not: What is the lowest valid target?
Rather: Which path forward is scientifically sound, economically viable, and organizationally feasible?
