As momentum for corporate climate action accelerates, companies face critical decisions: how to drive near-term emissions reductions while building credible, long-term pathways to net zero.
The latest draft of the Science Based Targets initiative (SBTi) Corporate Net-Zero Standard V2 introduces meaningful updates that could reshape how companies plan, invest and report on decarbonisation. Among the proposed changes: interim targets for carbon dioxide removals (CDR) and formal recognition for Beyond Value Chain Mitigation (BVCM).
To unpack what this means for companies and why it matters, Climate Impact X (CIX) co-hosted a webinar with Climeworks. Moderated by Yering Ngan, Head of Corporate Development & Strategy at CIX, the session featured speakers Molly Tinker and Richard Probst of Climeworks.
Here are five strategic takeaways for corporate leaders:
1. Start early: Build CDR capacity now for future demands
SBTi’s draft introduces interim CDR targets beginning in 2030, with a focus on Scope 1 residual emissions. This represents a pivotal shift, signalling that companies must begin scaling durable carbon removal capacity now, rather than deferring action until 2049.
CDR projects—especially high-durability solutions like direct air capture (DAC), bioenergy with carbon capture and storage (BECCS) and enhanced rock weathering—take years to develop and scale. Interim targets are designed to avoid a last-minute scramble by encouraging companies to build capacity gradually. Even modest early investments—such as pilot projects or small carbon credit purchases—can play a meaningful role when embedded into long-term net-zero roadmaps.
2. Diversify your carbon credit portfolio
A robust CDR strategy requires a dynamic portfolio-based approach—balancing near-term feasibility with long-term durability. Both the SBTi and the Oxford Principles for Net Zero Aligned Carbon Offsetting stress the importance of ramping up durable removals over time.
To manage cost, risk and impact effectively, companies should invest in a mix of solutions—pairing readily available nature-based solutions and cost-effective options with higher-cost, high-durability technologies (e.g. DAC, BECCS). This approach is especially relevant in Asia, where carbon policies and market maturity vary across jurisdictions.
Another key recommendation from the session: seek synergies. Where possible, choose credits that can meet both compliance and voluntary needs. However, companies should navigate local regulations carefully, as some markets may not allow for such overlap.
3. Leverage BVCM as to demonstrate leadership
BVCM, once considered optional, is now formally recognised in the latest SBTi draft—reflecting a broader push for companies to address emissions beyond their direct operations. BVCM refers to climate actions taken outside a company’s value chain, such as investing in innovative CDR technologies or forest protection projects. It provides flexibility to support high-impact solutions aligned with broader ESG goals.
There are two common ways to approach BVCM:
- Total fund: Allocate a budget for carbon credit investments based on an internal carbon price.
- Tonne-for-tonne: Match investments to the volume of hard-to-abate emissions.
While SBTi may set a minimum bar, true leadership means going further—selecting high-integrity projects and communicating strategies, progress and outcomes transparently. The technology sector, with Microsoft as a prime example, illustrates how early, ambitious action can shape policy and market expectations.
4. Make the internal case: Tie climate action to business value
A key theme that emerged was the challenge of securing internal buy-in for more ambitious climate action. Even the most well-crafted CDR strategies can face resistance without clear links to business value. The most persuasive arguments frame CDR and BVCM investments not as compliance costs, but as strategic levers—for risk management, cost efficiency, investor confidence and competitive differentiation.
To build support, sustainability teams should align climate actions with core business goals and stakeholder expectations. Tools like internal carbon pricing and sustainability-linked KPIs can further reinforce the business case. Ultimately, climate leadership should be viewed not as an obligation, but as a strategic investment in long-term resilience, reputation and growth.
5. Prepare for accountability: overshoot compensation may be required
Under the updated SBTi draft, companies that miss near-term emissions reduction targets—especially for Scope 1—may be required to compensate for the overshoot using durable removals. This shift underscores rising accountability and scrutiny. To stay ahead, companies should:
- Conduct scenario planning to anticipate potential shortfalls
- Secure access to high-integrity removal credits as a contingency
- Disclose challenges and corrective measures transparently in sustainability reports
As standards tighten, credible and verifiable action will be critical to maintaining stakeholder trust and avoiding reputational risk.
Shaping the future of Net-Zero
The evolving SBTi guidance signals a new chapter in corporate climate action. For years, carbon removals and offsetting were seen as voluntary extras. Now, SBTi is making it clear that such actions are an essential part of credible, science-aligned net-zero strategies. Companies that act early and decisively won’t just keep pace with expectations—they’ll help define what climate leadership looks like in the years ahead.
Want to explore how CIX can support your emissions reduction and carbon procurement strategy?
Connect with us at contact.us@climateimpactx.com to get started.
