Jun 24

2026

The new SBTi net-zero standard v2.0: what SMEs need to know before 2027

The Science Based Targets initiative published Version 2.0 of its Corporate Net-Zero Standard on 11 June 2026. For many small and medium-sized businesses, the important point is that the standard now separates companies into Category A and Category B, with lighter requirements for most SMEs.

Validation against Version 2.0 opens from 1 February 2027. Version 1.3.1 remains open for target submissions until the end of 2027, so there is a transition window rather than a cliff edge. From 2028, companies setting new targets should expect Version 2.0 to be the main route. It is still voluntary, not law, but voluntary does not mean irrelevant. The pressure usually comes from larger customers, lenders and investors rather than a regulator.

Here is the wider picture. SBTi sits alongside mandatory frameworks, so the data you build for it overlaps with the updated EU sustainability reporting rules now reaching UK businesses. Treating it as one connected exercise saves repeated effort.

The timeline you actually need

The current standard remains available through the transition period, and companies already working towards targets can continue using Version 1.3.1. Existing validated targets do not need to be ripped up overnight. They remain valid through their approved target period, although future target cycles will need to reflect the newer framework.

Planning this into your wider strategy is the same discipline we describe in our note on why integration is key to financial planning.

Where SMEs sit

Version 2.0 uses 2 categories. The position is assessed using group-level figures, so you should look at the wider group rather than one trading company in isolation.

For UK and Irish SMEs, the key figure to watch is the €50 million turnover threshold, along with employee numbers, balance sheet size and emissions. The euro thresholds apply in both jurisdictions, which is one reason groups with UK and Irish entities benefit from joined-up tax and accounting support across the UK and Ireland. Knowing exactly which entity sits where is the same scoping work that underpins solid due diligence.

What actually changed

A few shifts matter even for smaller firms. Scope 1 and Scope 2 now need separate near-term targets, rather than being rolled into one simple combined figure. Scope 2 also brings more detailed treatment of purchased electricity and market-based instruments.

The old “set and forget” approach is also weaker under Version 2.0. Companies are expected to track and report progress against targets annually, and progress is assessed at the end of each target cycle. Carbon credits and other climate contributions have a clearer but limited role. They are meant to complement emissions reduction, not replace it.

For larger Category A companies, third-party assurance becomes more important, which is where quality external audit that builds trust with lenders and investors becomes central.

Why it matters even though it is voluntary

This is the part SMEs often underestimate. More than 11,000 companies and financial institutions have already set science-based targets through SBTi. The pressure flows downhill. When large customers tighten their own reporting, they ask suppliers for emissions data, reduction plans and evidence that claims are credible.

That means more supplier questionnaires, not fewer. The work also supports other reporting areas, because emissions data may be needed for CSRD, SECR, tender submissions and lender conversations. Getting the data right once, with help from tools like those in our piece on how AI is changing accountancy, pays back across several frameworks.

What to do before 2027

Start by measuring your Scope 1 and Scope 2 emissions properly. Then ask your key customers what they expect from suppliers, because their timetable may matter more than SBTi’s. Decide whether to submit under Version 1.3.1 before the end of 2027 or prepare directly for Version 2.0. Build basic governance too, so progress reporting and board responsibility are not an afterthought.

A quick example. Say you run a £6 million engineering firm supplying 2 large manufacturers. Neither the law nor SBTi forces you to set a target. Then both customers ask for emissions data and a reduction plan as a condition of staying on their approved supplier list. That is how this reaches most SMEs.

Strong record-keeping also matters if a green claim is ever challenged, which is where forensic accounting and investigation support helps. The cost of decarbonising is easier to manage with input from recovery and restructuring advisers, and sound internal data starts with the kind of internal controls that protect a business. You can read the full standard on SBTi’s Corporate Net-Zero Standard v2.0 page.

Frequently asked questions

Is SBTi mandatory?

No. It is voluntary, but customers, investors and lenders increasingly use it as a credibility benchmark.

Do small businesses need science-based targets?

Not by law. Many SMEs fall into Category B, but supply chain pressure can make emissions data commercially important.

When does Version 2.0 validation open?

Validation under Version 2.0 opens from 1 February 2027.

What is the difference between Version 1 and Version 2.0?

Version 2.0 puts more focus on delivery, separate Scope 1 and 2 targets, progress reporting and clearer rules on climate claims.

Get ahead of the 2027 deadline

If your customers are starting to ask about emissions, get your baseline and your plan in order now rather than under deadline pressure. SCC’s advisory team can help you measure, set credible targets and keep the data working across every framework you face. Get in touch for a practical starting point.