SBTi’s Net-Zero Standard Version 2: From Ambition to Delivery in the GCC

On 11 June 2026, the Science Based Targets initiative (SBTi) published Version 2.0 of its Corporate Net-Zero Standard, the framework most large companies use to set credible climate targets. The revision marks a change of emphasis rather than of principle. The first version rewarded the ambition of a target. The second is designed to test whether a company can deliver it. For the GCC, where economies rest on carbon-intensive industry and fossil-fuelled power, that shift moves the standard onto the region’s most difficult ground.

SBTi released the Corporate Net-Zero Standard Version 2.0 on 11 June 2026. It separates Scope 1 and Scope 2 targets, tightens the rules governing renewable energy claims, introduces greater flexibility for Scope 3, and binds every target to a transition plan. Companies may validate under the current version or Version 2.0 from the first quarter of 2027, and Version 2.0 becomes mandatory for all target submissions after 31 January 2028. Targets already validated remain valid through their current cycle.

Key takeaways

• SBTi’s Corporate Net-Zero Standard Version 2.0, published 11 June 2026, reorients the framework from ambition toward delivery.
• Scope 1 now requires a standalone target, placing the process and combustion emissions of GCC heavy industry in direct view.
• Scope 2 rules are stricter: new quality criteria for renewable certificates, sourcing from the same region as consumption, and mandatory hourly-matching disclosure for the largest electricity users.
• Version 2.0 opens for submissions in the first quarter of 2027 and becomes mandatory after 31 January 2028. Existing targets remain valid through their cycle.
• The decisive constraint is data. Credible targets now depend on separate, auditable Scope 1, 2, and 3 measurement.

What Version 2 changes

The underlying definition is unchanged. A company measures its emissions and commits to reducing them along a pathway consistent with limiting warming to 1.5°C, neutralising only a small residual. Version 2.0 alters how those targets are structured and how much evidence of delivery the standard demands. The revision is extensive: by SBTi’s own account, 42% of the standard is entirely new. Five shifts carry the most strategic weight.

Delivery now takes precedence over ambition. The standard emphasises implementation, transition planning, and demonstrable progress, and it recognises good-faith effort, allowing a company that falls short of a target while acting credibly to remain on the net-zero pathway.

Scope 1 becomes a target in its own right. Direct emissions are no longer absorbed into a combined figure with purchased electricity. A Scope 1 target may be set through one of three routes, including approaches grounded in asset replacement and low-carbon transition planning.

Scope 2 is held to a higher standard. New quality criteria apply to the energy attribute certificates that support renewable electricity claims, and those certificates must be sourced from the same region in which the electricity is consumed. Under Version 2.0, the largest consumers, meaning Category A companies using at least 10 GWh a year in a region, must report the share of their electricity matched to consumption on an hourly basis rather than on an annual average. Hourly matching itself remains voluntary and is recognised through a separate programme, with thresholds rising to 75% from 2030 and 90% from 2035.

Scope 3 gains flexibility. Targets may reflect a company’s sector, geography, and value-chain position rather than a single uniform rule.

The standard also differentiates between markets, extending accommodations to smaller companies and to those based in lower-income countries. GCC companies are high-income and fall outside those reliefs, so for the region it is the tightening, not the flexibility, that defines the change.

The GCC’s particular exposure

Two of these shifts weigh more heavily on the Gulf than on most other markets: the separation of Scope 1 and the tightening of Scope 2.

Scope 2 is the first. Regional power generation remains dominated by gas and oil, which makes purchased electricity a substantial share of most Gulf corporate footprints. The previous approach allowed that share to be offset with annual renewable certificates from almost any market. Version 2.0 subjects those certificates to stricter quality tests and requires them to come from the same region in which the electricity is consumed, which removes the option of sourcing certificates from distant markets. Large consumers must also report how much of their electricity was matched to consumption on an hourly rather than an annual basis. Regional power purchase agreements and green certificates will be measured against a higher standard, and the outcome will turn on the accuracy of local emission factors, a matter the region already understands from the need to govern DEFRA, IEA, and local utility factors.

Scope 1 is the second. Oil and gas, petrochemicals, cement, aluminium, and utilities form the base of Gulf economies, and their emissions are concentrated in process and combustion. A standalone Scope 1 target brings those emissions into direct focus, with little room to soften them within a blended number. The levers are capital decisions rather than accounting choices: fuel switching, electrification, efficiency, and, in time, capture.

The national context reinforces the trajectory. GCC states have adopted net-zero dates between 2050 and 2060, with the UAE targeting 2050 and Saudi Arabia and Bahrain targeting 2060. Corporate targets increasingly operate within that national direction, and within the expectations of European customers and international investors who often require validated science-based targets as a condition of engagement.

The binding constraint is data

Every element of Version 2.0 converges on a single requirement: cleaner, more granular, more defensible emissions data.

Separate Scope 1 and Scope 2 targets remove the option of concealing one within the other. Reporting the hourly-matched share of electricity calls for time-stamped consumption data rather than annual totals. A credible transition plan rests on activity data linked to specific assets and reduction levers, supported by an audit trail. For the large companies that make up most of the region’s corporate base, Version 2.0 also requires third-party assurance, which raises the standard of data quality from good practice to a condition of validation. Scope 3 targets continue to depend on primary data from suppliers, the same value-chain data challenge that defines Scope 3 work across the region.

The strategic advantage lies in the overlap. This is the same audit-ready foundation already required by the UAE climate law and by ISSB-aligned local reporting. A company that builds it once can serve its regulator, its investors, and its science-based target from a single source rather than maintaining separate exercises for each. The effort compounds rather than duplicates.

Strategic implications for GCC companies

For companies that already hold validated targets, the immediate task is to identify the mandatory five-year review date, which determines the point of transition to Version 2.0. Existing targets remain valid until then, and early reworking is unnecessary.

For companies preparing to commit, the current version remains available through the transition window that extends into early 2028. The prudent course is to build toward the Version 2.0 structure now, with distinct Scope 1 and Scope 2 baselines and a transition plan behind them.

For companies at an earlier stage, the priority is a complete and auditable Scope 1, 2, and 3 inventory. The target framework sits downstream of the data, and a sound inventory reduces later rework.

Across all cases, the transition plan is best treated as an operational instrument rather than an annual disclosure. Version 2.0 is constructed to test whether that plan is real.

Coral helps GCC enterprises and government entities build the data foundation these targets now require: automated Scope 1, 2, and 3 measurement on an auditable base, at the level of granularity that separate targets, regional sourcing, and hourly reporting demand. The Emissions Management and ESG Reporting solutions are designed to work together, and a demo can be arranged against a company’s own target and reporting obligations.

FAQ

When does SBTi Version 2.0 become mandatory?

Targets may be submitted under either the current version or Version 2.0 from the first quarter of 2027. Version 2.0 becomes mandatory for all new submissions after 31 January 2028. Targets validated under an earlier version remain valid through their existing cycle.

Does Version 2.0 change the definition of net zero?

Not in principle. Net zero still requires reducing emissions across all scopes along a 1.5°C-aligned pathway and neutralising only a limited residual. Version 2.0 changes how targets are structured and raises the standard of evidence for delivery, particularly for Scope 1 and Scope 2.

Why is the Scope 2 change significant for the GCC?

Because Gulf grids remain dominated by gas and oil, purchased electricity represents a large share of most regional footprints. Version 2.0 tightens the criteria for renewable certificates and requires them to be sourced from the same region in which the electricity is used, which removes the option of buying certificates from distant markets. Large consumers must also report how much of their electricity was matched to consumption on an hourly rather than an annual basis. Together these changes require Gulf companies to substantiate clean-energy claims with more precise, time-stamped data than an annual average allows.

Must existing SBTi targets be revised?

No. Existing validated targets remain valid until the end of their timeframe or the next mandatory five-year review, whichever occurs first. That review point is the appropriate moment to move to Version 2.0.