By Lucy Almond, Chair of the Nature4Climate Coalition and Strategic Communications Lead for the Tropical Forest Alliance at the World Economic Forum
Executive Overview
The release of the Science Based Targets initiative’s (SBTi) updated Corporate Net-Zero Standard earlier this summer has ignited a firestorm of commentary, strategic reviews, and operational debates across the global corporate sustainability landscape. As businesses grapple with the escalating impacts of climate change, tightening regulatory frameworks, and shifting stakeholder expectations, the updated standard introduces a critical structural shift. While direct operational decarbonization rightfully remains the undisputed cornerstone of corporate climate strategies, the new standard establishes a credible, high-integrity pathway for integrating nature-based climate solutions (NBS) alongside aggressive emissions reductions—both today and well beyond the 2035 horizon.
For years, corporate climate strategy has been dominated by a singular binary: set a long-term net-zero target date, build out reduction trajectories, and manage the interim gap with varying degrees of voluntary carbon offsetting. The SBTi’s latest iteration fundamentally redefines this dynamic by introducing a formalized secondary track known as “ongoing emissions responsibility” (OER). This framework builds upon and operationalizes concepts previously discussed under the umbrella of "beyond value chain mitigation" (BVCM).
Crucially, the updated standard opens the door wide for investments in protecting, restoring, and enhancing natural carbon sinks. Far from relegating nature to an afterthought, the framework treats nature-based solutions as fully eligible, high-priority activities that can generate measurable co-benefits for biodiversity, water security, and local livelihoods—including vital support for Indigenous Peoples and local communities.
However, transitioning from theoretical compliance to practical implementation requires a profound understanding of the new criteria, the risks of delay, and the nuanced post-2035 rules governing carbon storage durability. This report provides an authoritative deep dive into what the updated standard changes, why proactive corporate adoption is essential, how nature fits into the architecture, and what an overlooked regulatory detail—Footnote 75—means for the future of corporate climate finance.
Detailed Chronology and Structural Evolution of the Standard
To understand the weight of the SBTi’s latest update, one must examine the chronological evolution of corporate climate governance over the past decade. When the original Corporate Net-Zero Standard was launched, it provided the market with its first truly standardized, science-based definition of what it meant for a company to reach net-zero emissions. It successfully shifted corporate ambition away from vague, unverified neutrality claims toward rigorous, science-aligned reduction targets.
However, as thousands of companies signed on, a glaring operational gap emerged: What responsibility do companies bear for the emissions they continue to emit while they work toward deep decarbonization? For most organizations, achieving absolute zero by 2050—or even 2040—is a gradual curve. Millions of tons of greenhouse gases are pumped into the atmosphere during this transitional runway.
Recognizing this critical gap, the SBTi’s updated standard formally introduces the Ongoing Emissions Responsibility (OER) track. This evolution moves the conversation past the informal and often sluggish debates surrounding beyond value chain mitigation, giving corporate treasuries and sustainability officers a structured, tiered framework to take financial and operational responsibility for unabated emissions today.
The Three Tiers of Ongoing Responsibility
Under the updated criteria, companies are not legally mandated by the standard to shoulder financial responsibility for ongoing emissions until 2035. Yet, the SBTi has deliberately structured the framework to encourage immediate, voluntary uptake. The standard establishes three distinct tiers of ambition:
- The "Engaged" Tier: Companies commit to financing mitigation outcomes equivalent to 1 percent of their ongoing emissions. This serves as an entry point for organizations just beginning to institutionalize internal carbon pricing and external procurement mechanisms.
- The "Advanced" Tier: Companies scale their commitment to 10 percent of ongoing emissions, signaling a more mature integration of climate finance into corporate operations.
- The "Leadership" Tier: Companies take full responsibility, covering 100 percent of their ongoing emissions through high-integrity mitigation outcomes.
This tiered approach provides a transparent ladder for corporate ambition, allowing companies to scale their financial commitments in tandem with their operational maturity. More importantly, it bridges the gap between long-term target dates and immediate planetary needs.
Supporting Context and Metrics: Why Waiting Until 2035 is a Strategic Miscalculation
A recurring temptation for corporate sustainability teams is to view 2035 as a distant compliance milestone—a date to be planned for lazily rather than prepared for urgently. According to leading analysts and climate strategists, adopting a wait-and-see approach is a catastrophic miscalculation.
The operational machinery required to support ongoing emissions responsibility and post-2035 mandates cannot be improvised overnight. Building credible internal carbon-pricing capabilities, establishing robust supplier contracts, navigating complex procurement relationships, and executing rigorous due diligence on environmental attribute credits require years of institutional learning.
The Readiness Gap
Consider the current state of corporate readiness across major global indices. While a majority of Fortune 500 and FTSE 100 companies have articulated net-zero commitments, fewer than 15 percent have established internal carbon prices that reflect the true social cost of carbon, let alone set up scalable procurement pipelines for high-integrity credits.
- Internal Carbon Pricing: Companies waiting until the mid-2030s to implement internal carbon fees will face sudden, disruptive shocks to their capital expenditure models. Early adopters are already using internal prices ranging from $50 to $100+ per ton to drive operational efficiencies today.
- Supply Chain Engagement: Scope 3 emissions account for upwards of 70 to 90 percent of a typical corporation’s footprint. Engaging tier-one, tier-two, and tier-three suppliers to secure verifiable emissions data and co-investment in mitigation requires multi-year relationship-building.
- Procurement Integrity: The voluntary carbon market (VCM) has undergone intense scrutiny regarding credit quality, additionality, and permanence. Sourcing high-integrity credits that withstand independent audits and stakeholder skepticism requires sophisticated procurement teams and long-term offtake agreements.
By treating the voluntary uptake tiers not as an optional luxury but as a mandatory operational drill, progressive companies are arriving at 2035 with fully integrated machinery. Those that wait will find themselves scrambling in a hyper-competitive market for finite, high-integrity credits, leading to compliance failures and severe reputational damage.
Nature’s Essential Place: Portfolio Approaches and Co-Benefits
One of the most encouraging aspects of the SBTi’s updated standard is its explicit, unambiguous integration of nature-based solutions. In previous iterations of corporate climate frameworks, nature was frequently marginalized or viewed with suspicion due to historic concerns regarding permanence, measurement, and leakage.
The updated standard corrects this imbalance. SBTi’s definition of verified mitigation outcomes that companies can leverage for ongoing emissions explicitly includes the protection, restoration, and enhancement of natural carbon sinks, placing them on equal footing with technological reductions and removals.
The Power of the Portfolio Approach
From a practical standpoint, the scale of the climate crisis demands a diversified portfolio approach. Engineered carbon removal technologies—such as Direct Air Capture (DAC) and Bioenergy with Carbon Capture and Storage (BECCS)—are vital components of the long-term net-zero puzzle. However, they are currently bottlenecked by high capital costs, energy intensity, and immature supply chains.
Conversely, nature-based solutions represent the vast majority of scalable carbon removal and avoidance capacity available to the global economy today. Relying exclusively on nascent technological removals while ignoring natural sinks is a logistical impossibility. A sensible corporate planning approach treats engineered and nature-based solutions as complementary pillars within a diversified portfolio.
Delivering Beyond Carbon
Beyond their immediate capacity to absorb carbon, well-designed nature-based projects offer unparalleled socio-ecological co-benefits that engineered solutions simply cannot replicate. These include:
- Biodiversity Conservation: Protecting primary forests, wetlands, and savannahs preserves critical habitats for endangered species and halts the accelerating biodiversity crisis.
- Water Security: Restoring watersheds and natural catchments regulates hydrological cycles, ensuring clean water supplies for local and regional populations.
- Livelihoods and Social Equity: High-integrity NBS projects directly support Indigenous Peoples and local communities (IPLCs), who are widely recognized as the most effective stewards of the world’s remaining natural ecosystems. By securing land tenure and providing sustainable economic alternatives, these projects foster climate justice and inclusive economic development.
The Post-2035 Picture and the Significance of Footnote 75
As corporations look past the 2035 milestone toward their ultimate net-zero target years (no later than 2050), the regulatory landscape shifts from voluntary uptake to mandatory structural thresholds.
Beginning in 2035, companies must support eligible removals equal to at least 1 percent of their ongoing Scopes 1, 2, and 3 emissions. This mandatory threshold scales linearly, rising to 100 percent by the company’s net-zero target year. Furthermore, within that mandate, at least 10 percent of emissions attributable to long-lived greenhouse gases (such as carbon dioxide) must be covered specifically with long-lived removals starting in 2035, scaling to 100 percent by the net-zero deadline.
Decoding Durability Classifications
To navigate these post-2035 requirements, the SBTi has adopted a durability classification framework adapted from the Intergovernmental Panel on Climate Change’s (IPCC) 2022 assessments:
- Short-Lived Removals: Carbon stored for decades to centuries.
- Long-Lived Removals: Carbon stored for centuries to millennia.
Crucially, the standard classifies storage by its timescale, not by its project type. Contrary to widespread misconceptions in the media and analytical reports, the SBTi standard never explicitly designates natural climate solutions as short-lived. The assumption that nature equals short-term storage and technology equals permanent storage is an external inference, not an SBTi distinction.
Footnote 75: The Open Door
This brings us to Footnote 75—arguably the most consequential yet widely overlooked provision in the entire updated standard.
In Footnote 75, the SBTi explicitly states its intention to run a formal call for evidence regarding whether shorter-lived removals can deliver climate-equivalent permanence through innovative contractual, legal, or landscape-level stewardship mechanisms. Moreover, the post-2035 criteria tied to these mechanisms are officially scheduled for comprehensive review before they legally take effect.
This provision is far from a minor administrative aside. It bridges the gap between current market practices—where buffer pools and insurance mechanisms manage reversal risk—and emerging frameworks that aim to guarantee permanent climate benefits from dynamic biological systems. By keeping this door open, the SBTi allows companies to act decisively today using the tools currently at their disposal, while simultaneously signaling that the methodology for evaluating nature’s durability will continue to evolve alongside scientific and commercial innovation.
Official Statements and Industry Perspectives
The release of the updated standard has drawn sharp commentary from global environmental leaders, corporate executives, and civil society organizations.
Speaking on the imperative of immediate action, Lucy Almond, Chair of the Nature4Climate coalition and strategic communications lead for the Tropical Forest Alliance at the World Economic Forum, emphasized the necessity of bridging climate and nature agendas:
"The door is now open and can remain so through mid-century. While direct reductions rightfully remain the priority, the new standard has cleared a credible path for high-integrity nature-based action alongside them… Waiting is a mistake for a practical reason. The governance, procurement relationships, supplier contracts and internal carbon-pricing capability that ongoing responsibility and the 2035 requirement demand will take years to build credibly."
Environmental economists and standard-setters have similarly underscored that the credibility of the VCM hinges on corporate willingness to embrace rigorous governance. As multiple integrity initiatives—including the Integrity Council for the Voluntary Carbon Market (ICVCM) and the Voluntary Carbon Markets Integrity Initiative (VCMI)—align their guidelines, the convergence of robust standards is creating a unified operating environment for global enterprises.
Future Outlook: Building Momentum for Systemic Transformation
The SBTi’s updated Corporate Net-Zero Standard marks a mature inflection point in corporate climate governance. It moves the global business community past the false dichotomy of choosing between internal decarbonization and external climate finance, establishing a comprehensive architecture where both must occur simultaneously.
As we look toward 2035 and beyond, the trajectory of corporate sustainability will be defined by three critical vectors of momentum:
- Systemic Alignment: The ongoing convergence and tightening of environmental attribute certificate markets, driven by rigorous oversight bodies like the ICVCM and VCMI, will eliminate fraudulent credits and elevate high-integrity nature-based solutions.
- Regulatory Integration: Governments worldwide are increasingly embedding corporate disclosure mandates (such as the CSRD in Europe and SEC climate disclosure rules in the United States) with science-based net-zero trajectories, turning voluntary best practices into hard legal obligations.
- Proactive Corporate Leadership: The commercial winners of the next two decades will not be those who wait for the regulatory floor to drop, but those who proactively build the institutional capabilities, supply chain partnerships, and internal financing models required to lead today.
The path is clear, the standards are set, and the tools are available. For corporate sustainability teams, the message of the updated SBTi standard is unmistakable: stop waiting, start building, and integrate nature into the core of your net-zero journey.
