SBTi 2025: The most important changes for companies

Many companies will face significant changes regarding climate-related targets in 2025. The Science Based Targets initiative (SBTi) has announced new rules and requirements that will change the path to real climate targets. These new standards aim to make the measurement and implementation of climate neutrality more precise and transparent.

Companies must prepare for stricter requirements that will become mandatory for new targets starting in 2027. Until 2026, companies can still set targets under the old version, but switching to the revised SBTi rules is advisable to meet future requirements. Those who want to know more should pay attention to official announcements and publications about the new SBTi Net-Zero Standard .

The Most Important Points at a Glance

• The SBTi introduced a proposal for new requirements for climate targets in 2025.

• Companies must rethink their processes and reports.

• Future innovations and adaptations will remain crucial.

Overview of SBTi Changes 2025

The Science Based Targets Initiative (SBTi) will update its requirements for climate targets in 2025. Companies must prepare for clearer requirements and stricter criteria for measuring and reducing emissions.

Background on the Science Based Targets Initiative

The Science Based Targets Initiative (SBTi) is now an independent organization that was originally founded as a coalition of several environmental organizations, including CDP, UN Global Compact, the World Resources Institute (WRI), and WWF. The SBTi supports companies in setting science-based climate targets that align with the guidelines of the Paris Climate Agreement and the 1.5-degree objective.

SBTi distinguishes between mid-term and long-term emission targets. The initiative assesses and certifies whether a company's targets align with current climate research. Increasingly, companies are utilizing the guidelines of the SBTi to make their climate strategy credible and transparent.

The SBTi plays a crucial role in the implementation of climate targets and climate protection. It establishes uniform standards relevant to many industries. If you want to learn more about the foundations of the SBTi, read our article “SBTi Explained”.

Objectives and Significance of the Changes

With the upcoming changes in 2025, the SBTi is pursuing clear focuses that aim to improve target definition and transparency. Companies will have more methodological flexibility but will also need to meet stricter implementation requirements:

• Relevance-based Scope 3 consideration instead of fixed coverage quotas (e.g., 67%): Companies must justify which emission categories are significant.

• Expanded selection of methods for target setting – with clearer guidelines for short- and long-term goals.

• Increased ambition requirements that align with the latest state of climate science.

• More binding reporting standards for disclosing progress and methods used.

The new rules particularly target companies pursuing net-zero goals. This includes, for example, the precise calculation of emissions across the entire supply chain. Companies will be required to make progress and methods more transparent. The changes aim to facilitate the efficient implementation of climate targets. The new requirements are seen as an important evolution for European and international climate protection.

SBTi: New Requirements and Standards 2025

In 2025, the SBTi Net-Zero Standard will bring significant changes for companies. The new rules pertain to clear guidelines for target setting, handling emissions, and expanding into the circular economy.

Revised Target Settings for Companies

Companies will need to set more ambitious climate targets in the future. The revised SBTi guidelines require clear measurable and verifiable targets for reducing their greenhouse gas emissions.

New is that the base year for target setting starting in 2027 may be at most three years prior. Companies are thus compelled to use current emission data.

Regular reviews are mandatory, so companies must disclose progress. If the requirements are not met, stricter requirements and possible rejections of targets may occur.

Inclusion of Scope 1, 2, and 3 Emissions

The new standard requires companies to separately account for all direct and indirect emissions. This includes:

• Scope 1: Direct emissions from owned facilities,

• Scope 2: Indirect emissions from purchased energy,

• Scope 3: Other indirect emissions from the supply chain.

Particularly Scope 3 presents many companies with new challenges. The target requirements for Scope 3 will be significantly tightened according to current plans and will align with the 1.5-degree limit. Companies must provide data from all areas such as transport, raw materials, and products.

Consideration of the Circular Economy

Another key element is the stronger integration of circular economy principles. Companies are encouraged to use resources more efficiently, reduce waste, and create closed material cycles.

New is that savings from circular economy practices are to be directly included in the assessment of CO₂ emissions and the CO₂ footprint. This includes the return of products, recycling, reuse, and repair.

Circular economy thus becomes an important building block in achieving new climate targets and reducing greenhouse gas emissions. Companies that become active in these areas can significantly reduce their ecological footprint.

Free Excel Template: SBTi

Use our free Excel template for SBTi-compliant target setting and reduction pathways to systematically plan and track your goals as a company.

Impacts on Companies and Business Models

Companies must adjust their structures and processes to meet the stricter requirements of the SBTi changes starting in 2025. In particular, the changes affect important areas such as business models, energy efficiency, and the implementation of new standards like ESRS E1.

Challenges in Implementation

Implementing net-zero targets according to the new SBTi Standard V2 presents companies, in particular, with three central challenges:

• Scope 3 data and accounting: More than 40% of the total CO₂ footprint is externalized – with uncertain, non-standardized data from suppliers.

• Supplier engagement: SBTi requires clear programs for support and data availability in the supply chain.

• Coordination & Expertise: Climate-relevant data processing and analysis require tools for the integration of various departments.

These factors make implementation complex and resource-intensive – hence structured project planning, stakeholder engagement, as well as a dedicated budget for data, training, and tools are essential.

Adjustment of Business Processes

To meet the requirements, companies must adapt their business models . Many are transitioning to introducing energy-efficient and circular economy-oriented technologies and lowering their energy consumption. This can not only reduce CO₂ emissions in the long term but also improve the cost structure.

Moreover, new business areas are gaining significance. Companies that adapt early can achieve competitive advantages. For example, they benefit when customers or investors focus on effective climate strategies.

In many cases, existing processes are being revised. Companies are rethinking their supply chains, collaborating more closely with partners, and implementing digital solutions for emissions measurement and control. This is a critical step for companies wishing to adhere to the new SBTi standard to secure their future viability.

Decisive Factors for Implementing SBTi in Companies

Implementing the SBTi is not just a question of ecological responsibility but also a strategic necessity. Companies are increasingly faced with demands coming from various angles: the market, consumers, politics, customers, and investors. These requirements aim to drive decarbonization and promote sustainable business practices. The following highlights the key drivers for implementing SBTi in companies.

1. Driver: Market, Consumer, and Political Pressure for Decarbonization

A significant driver for implementing SBTi is the increasing pressure from the market, consumers, and politics. Regulatory measures like the EU Emissions Trading System (EU ETS) create clear incentives for companies to reduce their greenhouse gas emissions. By setting caps on emissions and issuing tradable emission certificates, decarbonization becomes economically attractive. At the same time, consumers increasingly demand sustainable products and services, prompting companies to improve their climate profile to remain competitive.

2. Driver: Customer Expectations and Requirements in Tenders

Another crucial factor is the pressure from customers who increasingly demand climate targets. More and more companies are requiring their suppliers and partners to demonstrate measurable progress in reducing their greenhouse gas emissions. This is particularly evident in tender processes where climate targets and sustainability criteria are often decisive selection criteria. Companies participating in SBTi and setting science-based climate targets can thus secure a competitive advantage and improve their market opportunities.

3. Driver: Investor Expectations and Portfolio Decarbonization

Last but not least, investors also exert significant pressure on companies to set and implement ambitious climate targets. An increasing number of investors are integrating sustainability criteria into their investment decisions and demanding a clear decarbonization strategy from the companies in their portfolios. By participating in SBTi, companies can show that they take climate risks seriously and proactively take measures to reduce their emissions. This can not only bolster investors' confidence but also facilitate access to sustainable financing.

Future Perspectives for Climate Neutrality and Innovation

Climate neutrality is becoming an integral part of corporate strategy as new SBTi standards impose stricter requirements for emission reduction and transparency in reporting. Here, green electricity and innovative technical as well as organizational measures come into focus.

It is important to note that, in the context of SBTi climate neutrality goals, CO₂ compensation is usually not recognized as a core component of achieving targets. Instead, the drastic reduction of one's own emissions is prioritized. The SBTi views compensation merely as a complementary measure for unavoidable residual emissions, and it is subject to stringent quality requirements.

Climate Neutrality as a Strategic Goal

Many companies integrate climate neutrality as a central element of their business strategy. This is because the new SBTi guidelines require stricter targets and clear progress reports by 2025. Without measurable progress, competitive disadvantages and negative impacts on the environmental awareness of customers and investors loom.

Companies must define reduction targets for all areas, particularly for Scope 3 emissions, and regularly monitor progress. The focus is shifting from short-term CO₂ reductions to long-term sustainable approaches.

Stakeholders are increasingly emphasizing strict measures and responsibility for Scope 3, as these often contribute the largest share to CO₂ emissions. Environmental awareness thus moves further to the forefront of corporate governance.

Innovative Measures for Emission Reduction

Innovative technologies and processes are crucial to meet the new SBTi requirements. Green electricity is one of the most important options. Many companies invest in direct supply from renewable energy, build their own solar facilities, or enter into power purchase agreements (PPAs).

In addition, digitalization is used to measure, analyze, and strategically reduce emissions. Intelligent controls for buildings, logistics, and production help efficiently allocate resources.

Lists of typical measures:

• Transition to sustainable supply chains

• Improvement of energy efficiency

• Promotion of circular economy

• Use of residual materials and biodegradable materials

These measures are necessary for companies to contribute credibly and effectively to climate neutrality.

The Importance of Certification and Compensation

Not all emissions can be avoided in the short term – yet the new SBTi Corporate Net-Zero Standard (V2-Draft) sets clear boundaries: CO₂ compensation cannot replace the obligation to reduce emissions. Companies are required to make substantial reductions across the entire value chain (Scope 1–3) first.

Conventional compensations with CO₂ certificates are only permissible in two cases according to SBTi:

1. To neutralize unavoidable residual emissions (Residual Emissions), for instance through certified removal projects (Net-Zero-Removals)

2. Within the framework of "Beyond Value Chain Mitigation" (BVCM), meaning as an additional voluntary measure outside the own value chain

It is important that the certificates used meet stringent quality standards – for example regarding permanence, additionality, and avoidance of double counting. Certificates that also support biodiversity projects are gaining importance, such as through integrated forest protection or rewilding projects.

Credible climate protection is thus based on a clearly prioritized approach:

• First: Concrete and measurable emissions reductions

• Then: Complementary, high-quality compensation

The right mix of ambitious reduction and targeted use of complementary measures such as compensation or BVCM is crucial. Companies should document their strategy transparently and regularly evaluate effectiveness – ideally in line with the latest SBTi requirements.

What Must Companies Do?

To adapt to the new standards, companies should take the following steps:

• Review Current Climate Targets: Companies should review and adjust their existing targets to ensure conformity with the new requirements.

• Create an Action Plan: A clear plan for reducing emissions, particularly regarding Scope 3, is essential. This requires close collaboration with suppliers and other partners.

• Use the Excel Template: To facilitate the process, we offer a free Excel template for SBTi-compliant target setting and reduction pathways. This template helps companies systematically plan and track their goals. Download the free Excel template here.

Frequently Asked Questions: SBTi Changes 2025

In 2025, the requirements for SBTi target setting and the evaluation process have changed. Companies must take new criteria into account, estimate costs, and understand updated standards.

How Have SBTi Validation Criteria for Corporate Goals Changed for 2025?

In March 2025, the Science Based Targets initiative published the new consultation draft for the Corporate Net-Zero Standard Version 2.0. The validation criteria now require a closer alignment to science-based reduction pathways and place a stronger focus on Scope 3 emissions. Details can be found in the draft of the Corporate Net-Zero Standards 2025.

What Role Does the Base Year Play in Setting New SBTi Goals?

The base year serves as a comparison point for emissions reductions. For setting targets in 2025, companies must carefully choose the base year and clearly document the emission data. The base year influences how ambitious and realistic the goals are classified. Accuracy and transparency in selection are decisive.

What Are the New Requirements for Companies Regarding SBTi Target Setting in 2025?

Companies must now provide detailed emission data and align their Scope 3 targets to the new rules. The SBTi provides clear guidelines for target validation in 2025 . Companies must also regularly update and demonstrate how they plan to achieve their targets.

What Costs Are Associated with Implementing SBTi Changes for Companies?

The costs for companies may increase due to new requirements for data collection, consulting, as well as internal changes and reporting systems. The validation fees for SBTi continue to apply and may vary depending on the company's size.

Note on revalidation when switching to the new standard: If an organization has already been validated under the old standard and then switches to the new standard, additional revalidation fees will apply, even if a validation has already been conducted.

Moreover, the SBTi mandates that companies must revalidate their targets every five years. Without this revalidation, the existing target status expires – which brings additional validation or update costs.

How Has the SBTi Evaluation Process for Companies Transformed in 2025?

The evaluation process has become more transparent and structured. There are clearer requirements and standardized procedures that enable an objective assessment. Companies must provide more evidence and regular updates so that target achievement can be verified. More on this can be found in the new FAQ of the SBTi.