Net zero standards are changing: what the GHG Protocol, SBTi v2.0 and ISO 14060 mean for businesses

Emissions reporting, target-setting, and net zero claims are all changing at once. Whether or not an organisation has a decarbonisation target, its climate performance is likely to become more visible, and that visibility has financial consequences.

Most organisations are already asking what decarbonisation actions to take, what they will cost, and how they will be financed. But a new question is also emerging:

Is the progress being reported real, and can other organisations see when it is not?

This is becoming more difficult to navigate because several of the main standards and emissions rulebooks are changing at the same time:

The GHG Protocol, which most organisations use to measure and report emissions, is being rebuilt.
The Science Based Targets initiative, or SBTi, is moving towards version 2.0 of its net zero standard.
ISO is developing its first net zero standard, ISO 14060.

Together, these initiatives point towards greater scrutiny of the data behind climate claims. This matters even for organisations without a net zero target, as these standards increasingly shape the questions asked by lenders, buyers, customers and regulators.

How do the GHG Protocol, SBTi v2.0 and ISO 14060 differ?

One way to understand the three initiatives is to consider the different questions they ask about the same tonne of carbon:

The GHG Protocol asks how it should be reported.
SBTi asks whether it counts towards a target.
ISO asks whether the claim can stand up to independent scrutiny.

Multi-statement GHG reporting is coming

Today, organisations can report GHG emissions in a way that combines what they physically emitted with market-based reporting for energy.

The GHG Protocol’s proposed multi-statement reporting structure is expected to separate these elements and expand the market-based accounting to cover Scope 1 and Scope 3 as well.

The physical emissions inventory would remain, with up to three additional statements presented alongside it.

The four proposed GHG reporting statements

1. Physical GHG inventory

The physical GHG inventory would show Scope 1, Scope 2 and Scope 3 emissions as they actually occur across an organisation’s operations and value chain, before certificates or other contractual instruments are applied.

2. Market-based GHG inventory

The market-based GHG inventory would show emissions after accounting for contracts and certificates, such as:

power purchase agreements;
renewable electricity certificates;
certificates relating to green commodities, such as green steel, concrete, and low carbon fuels.

3. GHG impact statement

The GHG impact statement would report the real-world emissions impact of actions taken inside or outside the value chain.

For example, the key question would change from whether or not a purchase was made to whether that action drove additional decarbonisation.

4. Non-GHG indicators

Non-GHG indicators would cover other transition metrics not expressed in tonnes of carbon. These could include investment in, or procurement from, low-carbon sources.

Why is the GHG Protocol proposing multiple statements?

The logic is similar to financial reporting. Profit alone reveals only part of a company’s position. The income statement, balance sheet, and cash flow statement provide the information sitting beneath the headline figure.

The proposed GHG reporting approach would do something similar for emissions.

A business could purchase renewable electricity certificates and report a reduction in its market-based emissions, while its boilers, vehicles, or suppliers continued to produce the same level of physical emissions. Placing these figures alongside one another would make that distinction much easier to see.

What could multi-statement reporting mean financially?

With multi-statement reporting, a lender, buyer, or customer would be better able to determine whether emissions reductions were physically happening or largely contractual.

Weak emissions performance would therefore become harder to treat as a purely reputational issue. It could also affect:

financing;
valuation; and
commercial relationships.

These changes are still at the proposal stage. The GHG Protocol’s request for information closed in June 2026 and received responses from more than 400 organisations. Of those respondents, 84% supported the proposed structure.

Support was strongest for the market-based and impact statements, while opinions were mixed on non-GHG indicators. It has not yet been decided whether the new statements will be mandatory or optional.

How are the GHG Protocol and ISO working together?

The GHG Protocol and ISO are working towards consolidating their corporate accounting standards. A joint consultation is planned for Q2 2027, with publication targeted for Q4 2028.

More reporting statements mean more data, but AI can help by automating data collection, identifying gaps, and highlighting where effort would have the greatest effect.

What’s changing under SBTi v2.0?

The SBTi's new version puts more emphasis on companies dealing with their own emissions first and taking action elsewhere when they cannot address emissions directly.

Three changes are particularly relevant from a cost perspective:

1. Direct emissions have their own target

Scope 1 and Scope 2 are treated separately, so buying renewable electricity cannot compensate for limited progress on fuel use.

Emissions from boilers, furnaces, vehicles, and refrigerants need to come down in their own right. This shifts the emphasis away from certificates and towards:

physical change; and
expenditure on assets and infrastructure.

2. Supply chain targets offer more routes, but not necessarily easier ones

Every company now has a route towards a credible Scope 3 target, but some options require specialist knowledge, and 'best efforts' need to be evidenced.

Other options, including low-carbon commodity certificates and sector-level action, come with a cost. Where products or services create significant emissions when used, downstream emissions must also be addressed.

3. Residual emissions are becoming a longer-term cost

From 2035, larger organisations in developed economies will be expected to start paying to remove a share of the emissions they produce. That requirement will increase over time. Therefore, the earlier emissions are reduced, the less a business will pay to reduce them.

How do the GHG Protocol and SBTi v2.0 intersect?

Let’s say, for example, that a company helps one of its suppliers switch to lower-carbon steel.

This may not immediately change the company’s own physical emissions inventory. However, the action could appear in its GHG impact statement, while SBTi v2.0 may recognise the action as counting towards the achievement of a SBTi-validated decarbonisation target.

Reporting an action and receiving credit for it against a target are not necessarily the same thing.

ISO 14060: Can the claim stand up to independent scrutiny?

ISO’s draft net zero standard takes a different approach to the GHG Protocol and SBTi v2.0. It does not change the way emissions are counted.

Instead, ISO 14060 sets out what an independent party would need to see before concluding that an organisation is genuinely aligned with net zero at four different stages of maturity: aspiration, planning, progressing towards targets, and finally achieving net zero status.

The draft focuses on real, physical emissions reduction in the near term. It also places a limit on cumulative emissions across the whole transition period. This means a slow start can’t simply be offset by making deeper cuts later.

Under the draft:

missed targets would need to be made good; and
anything used to address final residual emissions would require a 100-year lifespan.

The draft did not receive enough support in ISO's September 2026 vote and is now being revised, with no new timetable announced.

The final standard may look different, but the underlying message is unlikely to change dramatically: a net zero plan that depends on cheap credits, delayed action, and no consequences for missed targets carries costs that will eventually have to be accounted for.

The awkward timing issue

The changes explained above mean that companies are facing an awkward timing issue. Those setting targets for the first time can use SBTi v2.0 from early 2027 and will have to use it from early 2028. However, the revised GHG Protocol is not expected until the end of 2028, and ISO’s standard is still at draft stage.

Interim guidance will continue to emerge. Companies with approved targets are not being asked to restart the process immediately.

For organisations reaching revalidation during this period, there is a practical choice:

revalidate under the existing approach and run the target for its term; or
build towards SBTi v2.0 and potentially avoid repeating the exercise later.

Neither option is a reason to wait before taking action.

What do the changing net zero standards mean for capital?

Though the changes mentioned are highly influential, none of them tell an investor, lender, or CFO exactly where to allocate capital.

Instead, they change:

the information available when financing decisions are made; and
the price attached to different levels of transition risk.

Therefore, a credible transition plan will increasingly require more than a target and a pathway diagram. It will need to show:

which decarbonisation levers are being used;
where those levers are being applied;
what they will cost; and
over what period action will take place.

By 2028, a lender or buyer may ask whether:

a target was set using the appropriate methodology;
reductions appear in physical emissions rather than certificates; and
residual emissions rely on acceptable removals.

For investors, the issue is compounded across a portfolio. Gaps in investee-company data can become gaps in the fund’s own reporting.

What should organisations do now?

The practical message is simple:

Keep what you actually emitted separate from what you bought.
That distinction is becoming central to how emissions performance will be reported.

Reduce emissions at source where you can and evidence the impact where you can't.

Scope 1 and 2 reductions should show up in the physical inventory, not just in certificates. Scope 3 is harder: limited data, traceability and influence over suppliers mean the effect of an action often won't appear in the inventory. SBTi v2.0 allows for this by giving companies more ways to meet a Scope 3 target, such as sector-level action or low-carbon commodity certificates. What matters is showing that the action drove real-world decarbonisation.

Build the evidence once.
Good data, a clear audit trail, and a costed transition plan should be able to serve the GHG Protocol, SBTi, and ISO rather than creating three separate systems.

The companies that get ahead of this will be those that can show, in numbers and evidence, what is changing, what it costs, and what still needs to happen.

How can BIP.Verco help you get ahead of these changing standards?

We work with sponsors, investors, companies, and assets to set decarbonisation targets that hold up across the GHG Protocol, SBTi, and ISO. We help our clients collect evidence that makes progress and value visible throughout the investment lifecycle.

Our Rapid Costed Decarbonisation and paid-on-performance implementation services give boards and investment committees the evidence required to:

deliver the strongest decarbonisation projects early;
drop weak options quickly; and
bank the greatest value possible.

Find out more about Rapid Costed Decarbonisation

Find out more about the implementation partnership service

If you’re interested in the topics discussed in this article and would like to talk them through with an expert, please don’t hesitate to get in touch.