SBTi proposes more flexible Scope 3 reporting, relaxed rules for lower-income companies

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🗞️ Driving the news: The Science-Based Targets initiative (SBTi) has released a draft update to its Corporate Net-Zero Standard, proposing more flexible Scope 3 emissions reporting and encouraging the use of clean energy by 2040
• The draft also allows greater clarity on using carbon credits for residual emissions
• It introduces relaxed requirements for companies in lower-income countries

🔭 The context: Scope 3 emissions—indirect emissions across a company’s value chain—are often the most difficult to track and reduce
• SBTi’s updated framework separates Scope 1 and 2 reporting and promotes sector-specific pathways for decarbonisation
• The changes come amid mounting pressure on businesses to balance ambition with feasibility, particularly in developing economies

🌍 Why it matters for the planet: More flexible rules could help increase participation from companies that have previously struggled with stringent Scope 3 expectations
• The emphasis on clean energy and credible offsets supports long-term decarbonisation goals
• A more inclusive approach could catalyse climate action across regions with lower historical emissions

⏭️ What's next: The draft standard is open for public consultation, with final guidelines expected later in 2025
• If adopted, companies will need to submit updated net-zero targets under the revised framework
• These changes may also influence how investors assess climate risk and ESG alignment

💬 One quote: "This updated standard is about enabling ambition while recognising real-world challenges," – Science-Based Targets initiative spokesperson

📈 One stat: Scope 3 emissions typically account for over 70% of a company’s total greenhouse gas emissions, according to the CDP

See here detailed sustainability performance of companies like Unilever, Nestlé, and Procter & Gamble

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