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KoSIF Issue Brief Vol.05 – SBTi Corporate Net-Zero Standard V2.0: Readiness of Korean Companies and Key Challenges

In June 2026 the Science Based Targets initiative (SBTi) released Version 2.0 of its Corporate Net-Zero Standard (CNZS), the first major revision in about five years. This brief examines the key changes and how capital markets interpret them, and uses 2025 CDP response data to assess Korean companies' readiness.

The revision reshapes the Standard as a whole: a new Category A/B classification, the use of market instruments for scope 2, the scope 3 significance threshold, net-zero governance, transition plan disclosure, third-party assurance, and carbon credits and Ongoing Emissions Responsibility (OER). The brief considers how capital markets and investors interpret each change. Target validation under V2.0 opens in February 2027 and becomes mandatory in February 2028. Since many Korean companies set 2030 as their near-term target end year, target renewal submissions from Korean companies are expected to be concentrated in 2028–2031.

Assessing how far Korean companies meet each requirement, the brief finds that their key weakness lies not in a lack of systems but in the gap between systems and implementation. It then sets out recommendations for both companies and capital markets.

[Contents]

1. Overview of the Corporate Net-Zero Standard V2.0 Revision

2. In-depth Analysis of the Key Changes in V2.0

① New Category A/B Classification

② Reform of How Market Instruments Are Used for Scope 2

③ Scope 3 Significance Threshold and Target Boundary

④ Net-Zero Governance: New Board-Level Responsibility

⑤ Mandatory Disclosure of Transition Plans

⑥ Mandatory Third-Party Assurance

⑦ Carbon Credits and Ongoing Emissions Responsibility (OER)

3. Summary by Key Change: Capital-Market Interpretation and Status of Korean Companies

4. Conclusions and Recommendations

[Key Findings]

-          Of the 292 Korean companies responding to CDP, 96% (281) would fall into Category A, under which scope 1, 2 and 3 targets, third-party assurance, transition plan disclosure and the End-of-cycle Assessment are mandatory. Yet only 47 (16%) participate in the SBTi. With validation under V2.0 opening in February 2027, mandatory application from February 2028 and five-year target renewal, Korean submissions are expected to be concentrated in 2028–2031.

-          Capital-market interpretation of the key changes: proxy advisors are moving toward requiring companies to formalize board-level climate oversight in documents such as committee charters, and Glass Lewis examines these documents directly. Investors also use the Climate Action 100+ Net Zero Company Benchmark, which assesses the categories covered by scope 3 targets, to prioritize corporate engagement. In addition, the brief reviews the finding that applying all three restrictions proposed in the GHG Protocol revision debate would cut the share of companies ahead of their scope 2 reduction pathway from 72% to 50% (Bjørn et al., 2025).

-          The key weakness is not a lack of systems but the gap between systems and implementation. Although 91% of companies have board-level climate oversight and 93% and 94% have their scope 1 and scope 2 emissions verified, respectively, only 64% publicly disclose a transition plan, 55% have their scope 3 emissions verified and 8% assess all of their significant Tier 1 suppliers. Renewable electricity procurement is also concentrated in REC purchases and the Green Premium, at 88%.

-          For companies, the brief recommends confirming their category and working backward from target renewal dates; reviewing the contractual structure of market instruments, scope 3 supply chain visibility, documentation of the board's role and the scope of assurance; and forecasting residual emissions and planning carbon-removal procurement early. For capital markets, it recommends aligning engagement timing with the target renewal schedule and evaluating the scope and implementation framework of targets, not merely their existence.

Read the related press release →

Inquiry: Hyunjung Kim, Senior Researcher (hyunjung.kim@kosif.org