After facing backlash last year over allegations of enabling greenwashing, SBTi has recently released the second draft version of its Corporate Net Zero Standard (CNZ 2.0), opening it up for public consultation.
The stakes and importance of this could not be overstated. The Science Based Targets Initiative (SBTi) is a leading, global organization that sets guidance and criteria for companies to define and report science-based net-zero targets. How these standards are defined determines what counts as a credible emissions reduction. It therefore also determines how meaningfully and effectively corporate emissions will be addressed, how companies will define their net-zero strategies, and how easily we can hold corporate polluters accountable for years to come.
CNZ 2.0 does represent progress in some areas, compared with the previous version. For example, Action Speaks Louder is encouraged to see the inclusion of 24/7 electricity matching in this version of the standard.
However, we still hold deep concerns about it: there remain various instances of problematic definitions, lack of guidance and lack of safeguards that put the credibility and effectiveness of science-based targets at risk.
If you’re an NGO, we strongly encourage you to participate in the consultation: click here to access the public consultation portal. The deadline to submit comments is Friday, 12 December.
Concern: Definition of ‘zero-/low-carbon’ electricity
CNZ 2.0 shifts corporate electricity targets from “renewable” to “zero-/low-carbon,” allowing sources like nuclear, gas with carbon capture (CCS), and some biofuels to count.
This is problematic for several reasons:
- Biofuels (from crops like corn or sugar cane, among other sources) are limited and therefore cannot scale, can harm climate, biodiversity and human rights, and divert investment from meaningful, scalable solutions like wind and solar.
- Nuclear energy poses long-term waste, biodiversity and human rights risks.
- Gas with CCS still produces significant emissions over its full fuel cycle. Crucially, other high-standard frameworks that SBTi is trying to align with, like RE100 and 24/7 CFE, do not allow it. Including it could fragment standards when regulatory alignment is most needed, and lock in polluting infrastructure.
Concern: Insetting for Scope 3 is allowed without public consultation.
CNZ 2.0 allows companies to count emission reductions across broad categories of activities in their supply chain without showing exactly which suppliers made the reductions. This activity-pool accounting can act as a backdoor for ‘insetting’, where companies fund carbon reduction projects within their own supply chain.
Insetting may appear as progress, but it is often not traceable or verifiable, turning climate targets into a creative accounting exercise rather than genuine, measurable emissions cuts.
Activity-pool accounting can be functionally indistinguishable from insetting, as it is used only when companies cannot trace emissions back to specific suppliers. It is therefore highly vulnerable to greenwashing, and should not be allowed to count towards science-based targets.
To maintain credibility, SBTi should require that all reductions be linked to specific suppliers or verifiable activities, with any untraceable reductions reported separately — like carbon offsets. Without this safeguard, activity-pool accounting could become a loophole that undermines net-zero targets.
Concern: Lack of Guidance on Downstream Leased Assets
ASL’s research has found that industrial gas and tech companies often shift emissions from their own operations into the ‘downstream leased’ category of emissions reporting — originally a category intended for facilities owned by the company that are leased out to a customer. In sectors like industrial gas, companies sometimes will include assets they own and fully operate, but where a customer pays the electricity bill (a practice known as “tolling”).
This allows companies to remove emissions from their direct reporting responsibility, making them appear greener without reducing real emissions. SBTi needs to provide separate, detailed guidance on the downstream leased assets category, clarifying when emissions can legitimately be reported there, to prevent misclassification and maintain the credibility of its targets.
Concern: Advanced Market Commitments as Scope 3 Reductions
Advanced Market Commitments (AMCs) are agreements in which a company pledges to buy or support low-carbon products or technologies before they are widely available. While AMCs can encourage market development, they do not guarantee actual emission reductions in a company’s value chain.
Allowing companies to count AMCs toward Scope 3 targets risks enabling greenwashing: they are a way to claim progress without changing actual supplier emissions. It shifts responsibility away from direct decarbonization, weakens accountability and undermines the scientific integrity of SBTi standards. SBTi must ensure corporate targets prioritize direct, traceable and verifiable reductions over indirect financial mechanisms.
Concern: Energy Attribute Certificates counting towards science-based targets
Energy Attribute Certificates (EACs) are tradeable instruments that allow companies to claim the environmental benefits of renewable electricity without necessarily consuming it directly.
Current EAC markets often lack robust safeguards: it may be unclear whether the renewable electricity in the certificate is new and additional, if it aligns with the electricity actually used by the company, or if it ensures social and environmental integrity.
Without stronger verification requirements, clear ownership, and alignment with high-integrity standards, companies cannot reliably demonstrate that their EACs represent real, measurable, and additional reductions toward their targets.
Concern: Ongoing Emissions Responsibility Climate Finance Contributions
CNZ 2.0 allows companies to fund climate projects to claim progress on their climate targets. However, we are concerned that this framework leans heavily on carbon offset systems that have repeatedly failed to deliver real emissions reductions.
For example, Verra, one of the most widely used offset registries, has faced numerous scandals and peer-reviewed critiques showing that claimed carbon sequestration or emission reductions were not actually delivered.
SBTi must require strict oversight, approved verification bodies, and a meaningful complaints process to ensure accountability. Without these safeguards, corporate climate finance could fail to drive genuine climate action and undermine trust in net-zero commitments.
Concern: Professional Services and Lobbying
CNZ 2.0 includes professional services (advising, marketing, distribution), recognizing their role in supporting fossil fuel extraction — and we welcome this inclusion. However, lobbying activities, which can influence government policies and sector-wide action, remain unaddressed.
Companies lobbying against net-zero policies or advocating for fossil fuel interests should be reconsidered in SBTi validation, or targets risk being misleading — appearing credible while companies continue to actively oppose climate action behind the scenes.
Concern: Omission of Just Transition
Nearly two-thirds of corporate guidance recommends reporting on contribution to a just transition: an essential principle that ensures climate action does not harm vulnerable workers or communities. The SBTi, however, is unique in not doing so.
Without the inclusion of the just transition in emissions reporting guidelines, companies have no incentive to address social impacts — ultimately undermining climate action. SBTi should require climate targets that identify, mitigate, and remedy social harms. We do not recommend that SBTi defines what the just transition is, but instead point companies to existing meaningful guidance, such as:
- UN Guiding Principles on Business and Human Rights (2011)
- International Trade Union Confederation “Just Transition: a Business Guide” (2018)
- World Benchmarking Alliance “Moving from pledges to implementation: a guide for corporate just transition action” (2023)
Take Action
This moment could be a turning point for corporate climate action — and the fight against climate change. Without meaningful guidelines, we risk creating loopholes that allow corporate polluters to overstate their progress while not effectively addressing the very thing we urgently need to cut: their emissions.
Action Speaks Louder urges NGOs and partners to participate in the consultation to ensure SBTi standards are credible, transparent, and effective. The future of corporate climate action depends on it.
Click here to take part in the SBTi Corporate Net Zero Standard 2.0 Public Consultation.
