Press Releases

SBTi's new Corporate Net-Zero Standard becomes mandatory in 2028
— Korean companies urged to review their readiness now

• 96% of the 292 Korean companies responding to CDP would fall into Category A and be held to the SBTi's strengthened requirements

• Areas to review range from electricity procurement dominated by REC purchases and the Green Premium to supply chain emissions, transition plan disclosure and third-party assurance

The Science Based Targets initiative (SBTi), which validates corporate emissions reduction targets, will make its new, strengthened Corporate Net-Zero Standard (CNZS) V2.0 mandatory from 2028. Not only companies setting targets for the first time but also those renewing existing SBTi targets are being advised to review in detail how they procure electricity, how they manage supply chain emissions, and whether they disclose transition plans and obtain third-party assurance.

An analysis by the Korea Sustainability Investing Forum (KoSIF) of the 292 Korean companies that responded to the full 2025 CDP climate change questionnaire and made their data public estimates that 96% (281) would fall into Category A (large companies), to which the SBTi's more stringent requirements apply. Category A companies are required, among other things, to set greenhouse gas reduction targets that include supply chain (scope 3) emissions, to disclose transition plans and to obtain third-party assurance.

KoSIF has published the findings in an issue brief, "SBTi Corporate Net-Zero Standard V2.0: Readiness of Korean Companies and Key Challenges". The SBTi Corporate Net-Zero Standard is the framework under which companies set science-based net-zero targets and have them validated; it was revised in June 2026, its first major revision in about five years.

ㅣThe basics are in place — but V2.0 calls for a detailed review

Korean companies were found to have much of the basic architecture of climate response in place, including board-level oversight of climate issues and the calculation and verification of emissions from their own operations (scope 1) and purchased electricity (scope 2). Under V2.0, however, the SBTi looks beyond whether such systems exist to how a company procures its electricity, how it manages supply chain emissions, and whether it discloses a transition plan and obtains third-party assurance.

According to the brief, from February 2028 V2.0 becomes mandatory for new entrants and companies renewing their targets alike. "Before the new Standard takes full effect, companies need to check whether their current reduction systems and implementation practices meet the requirements of V2.0, and fill any gaps in advance," said Hyunjung Kim, Senior Researcher at KoSIF.

A prime area for review is scope 2 — the indirect emissions from purchased electricity. Under V2.0, renewable energy certificates (RECs) and power purchase agreements (PPAs) remain valid instruments for implementing targets. But simply having used RECs or PPAs is no longer enough. The SBTi also checks whether the company has prioritized activity-level actions that reduce emissions at source (such as replacing equipment), and whether the electricity meets three criteria the SBTi frames as near, new and now: deliverability (near), meaning it can actually reach the grid the company uses; a generator age limit (new), meaning it comes from generators commissioned or re-powered within fifteen years; and hourly matching (now), meaning the timing of renewable generation matches the timing of consumption.

This is a particularly important change for Korean companies. KoSIF's analysis found that REC purchases and the Green Premium together account for about 88% of Korean companies' renewable electricity procurement. Because neither is tied to a specific generation project through a long-term contract, both are generally seen as lower in additionality than PPAs and are likely to be the focus of the tightening procurement quality criteria. Companies preparing to set new targets or renew existing ones should review in advance their current renewable procurement methods, contract terms and renewal dates.

ㅣSupply chains, transition plan disclosure and assurance also need review

Supply chain emissions management, transition plan disclosure and scope 3 assurance also need to be brought into line with V2.0. The brief advises companies to work back from their target renewal dates and check in advance their electricity procurement contracts, key supply chain data, transition plan disclosure and the scope of assurance, including scope 3. Investors, too, are advised to look beyond whether a company holds an SBTi target and to examine the implementation framework behind it — what emissions the target actually covers, what the disclosed transition plan contains, and how far assurance extends.

"This revision shows that the Standard is evolving to demand far greater rigor on the scope of targets, the implementation pathway, and the data and assurance systems that back them up — rather than on the declaration of a net-zero target itself," said Karl Chun-Seung Yang, Executive Director of KoSIF. "Companies should proactively check whether their existing climate response systems meet V2.0, and investors should evaluate companies on actual reduction performance and the credibility of their implementation frameworks rather than on declared targets."

The issue brief examines the key changes in the SBTi Corporate Net-Zero Standard V2.0 and how capital markets read them, and analyzes the readiness and challenges of Korean companies using 2025 CDP response data. The full brief is available on the KoSIF website.

Read the Issue Brief →

Contacts

ESG Management  |  Hyunjung Kim, Senior Researcher  |  hyunjung.kim@kosif.org

Media  |  Dajeong Kim, Senior Researcher  |  kimdj@kosif.org