As global climate action accelerates, the credibility of corporate net-zero strategies is under increasing scrutiny. In high-emission sectors like apparel and food & agriculture, Scope 3 emissions often exceed 80% of total emissions, making their inclusion essential for credible climate commitments. 

The Science Based Targets initiative’s (SBTi) Corporate Net-Zero Standard (CNZS) is the leading benchmark for target-setting. In the recent draft of CNZS Version 2, the SBTi introduces several important updates to improve feasibility and applicability of their standard, and provides practical proposals for ongoing challenges related to setting and meeting targets. The Value Change Initiative (VCI) submitted input to the public consultation focusing on key Scope 3–related proposals, drawing on synthesized feedback from VCI members and the VCI’s body of work. 

This post presents the highlights of VCI’s input, including:

– The importance of setting near- and long-term Scope 3 targets

– The nuance of setting target thresholds and activity-level, supplier engagement and removal targets

– Substantiating progress toward targets through the appropriate use of direct and indirect mitigation

– Key proposals related to BVCM, removals, and claims

Setting Scope 3 targets 

The VCI continues to emphasize that both near- and long-term Scope 3 targets are essential for any credible net-zero strategy.

Near-term targets

VCI supports the draft proposal to introduce more flexibility in setting near-term targets (i.e., near-term targets with a timeframe of up to 7 years instead of the current 2030 milestone year). Near-term targets (as referenced in section CNZS-C13) help establish accountability mechanisms and create momentum with clear direction for planning toward long-term targets.

Long-term targets

The VCI strongly supports making long-term Scope 3 targets mandatory (as referenced in section CNZS-C16.1).  

These targets are key for:

– Ensuring climate integrity: Achieving net zero by 2050 requires addressing Scope 3 emissions with the same urgency and structure as Scope 1 and 2.

– Preventing strategic delays: Long-term targets drive early investment in supplier engagement, technology, and interventions. 

– Enabling systems transformation: Long-term planning supports improvements in Monitoring, Reporting and Verification (MRV), market co-claiming, and impact attribution. 

– Creating continuity: Milestones (e.g., 2025, 2030, 2035) must clearly feed into a long-term Scope 3 decarbonization pathway.

Scope 3 target threshold

SBTi proposes a change of coverage in Scope 3 targets to new thresholds including all emissions sources which meet one of the following criteria (item CZNS-C16.2 and C7.3):

– 5% or more of total Scope 3 emissions

– 10,000 tonnes CO2e contribution to the inventory

– Representing 1% of the company’s total annual revenue

VCI’s position:

– The 5% threshold: A reasonable starting point, but should be combined with materiality, sector context, and mitigation potential.

– 10,000 tCO2e threshold: Appropriate when applied with nuance, considering activity type, sector, and company category. 

– 1% revenue threshold: Useful for managing complex value chains but requires safeguards to avoid underestimating cumulative emissions from smaller sources. The threshold should adapt to sectoral nuances and ensure cumulative exclusions don’t exceed material significance. In fragmented value chains, aggregated small sources can be materially important, and excluding them may hinder co-investment opportunities in innovation.

Activity-level targets

The VCI supports making activity-level targets optional (CNZS-C16.2). Measuring and managing GHG emissions at the activity level can be very resource-intensive, requiring a high level of granularity in data management, which not all companies have yet. The VCI recognizes that sector-specific guidance by the SBTi can already include safeguards to prioritize emissions-intensive activities. This could reduce the need to set activity-specific targets separate from scope-level targets, reducing complexity in implementation, tracking, and reporting progress from overlapping targets. Still, further alignment between Forest, Land and Agriculture (FLAG) targets and net-zero targets would enhance effectiveness. 

Supplier engagement targets

The VCI supports making supplier engagement targets optional (CNZS-C16.7). These imply favoring engagement of Tier 1 suppliers and might dilute the focus on other tiers with critical emissions hotspots. The VCI supports a more nuanced approach to ensure clear expectations and incentives are set, especially since in many sectors most emissions come from Tier 3 or 4 suppliers. VCI has championed co-claiming in the Scope 3 space precisely to enable inclusive value chains. 

The VCI advocates for context-driven flexibility in supplier alignment metrics, supporting the use of both % emissions and % spend measurement. Together, they offer a flexible approach that balances climate integrity, operational feasibility, and progressive system improvement.

Removal targets

VCI supports the recognition—but not the requirement—of removal targets (CNZS-C18). Given the practical challenges related to removals accounting, flexibility is crucial as companies build capacity. However, recognition is vital to incentivize early investment in removals.  While doing so, it is important that removals can be recognized and leveraged by companies. 

Demonstrating progress toward targets 

As corporates mature in their net-zero strategies, transparent progress tracking is increasingly important. The SBTi draft CNZS V2 introduces new requirements to strengthen accountability related to both direct and indirect mitigation.

The VCI recognizes that the proposed requirements represent progress toward more consistent and science-based data practices. They provide transparency and overall structure aligned with the GHG Protocol’s draft Land Sector and Removals Guidance (LSRG). However, implementation details are needed, especially on the quality of Scope 3 data and traceability, how to handle uncertainty (particularly in land-use and Scope 3 emissions estimation), as well as verification mechanisms. Clarity is also required regarding the implications of not reporting on progress, missing targets, or failure to follow recalculation rules (i.e., underperformance metrics). The following outlines VCI’s position on some key proposals under substantiating progress towards targets. 

Direct mitigation and Activity Pools (CNZS-C16.5) 

In SBTi’s framework, direct mitigation refers to actions that are directly linked to specific activities in a company’s value chain and traced through a credible system.

The VCI supports recognizing activity pool-level tracing (aligned with GHG Protocol) as a valid form of direct mitigation when physical traceability is limited. Leveraging its work with sectors like Food & Agriculture and Apparel & Footwear, the VCI welcomes explicit references to its Supply Shed framework in the CNZS V2 as a proposal or exemplary operational framework for activity pools. This includes the relevant operational considerations and safeguards presented in VCI’s publication Accounting and reporting Scope 3 Interventions in the Food and Agriculture Sector (2025). The VCI welcomes collaboration with the SBTi to advance the definition and application of activity pools, including their role in indirect mitigation.

Indirect mitigation (CNZS-C16.5) 

The CNZS V2 introduces the concept of indirect mitigation, which refers to the use of energy and commodity certificates when a company cannot directly trace emissions, or when insurmountable barriers prevent them from mitigating emissions. The VCI strongly supports the proposal to allow indirect mitigation to count toward Scope 3 targets. This is under the condition that it is used only as an interim measure where direct mitigation is not feasible, especially in fragmented value chains or among Tier 3 and 4 suppliers. Indirect mitigation should still deliver measurable and comparable outcomes and be reported separately from direct mitigation outcomes. 

The VCI recognizes the need for clarity on the definition of the “interim” period in the draft standard, as well as on the technical requirements of Chain of Custody (CoC) models for using MBMs toward indirect mitigation and the requirements to operationalize commodity certificates (i.e., Environmental Attribute Certificates [EACs]). 

Beyond Value Chain Mitigation (BVCM) 

The draft CNZS V2 introduces a foundational BVCM framework, where VCI recommends clarity on:

– What qualifies as a reportable action

– Minimum data requirements

– Disclosure frequency

– Assurance requirements 

Removals durability

The CNZS V2 discusses the concept of durability for removals aimed at addressing residual emissions. TheVCI recognizes that removals accounting and implementation is still limited, and companies may need to phase in higher-quality removals over time. The VCI supports “Option 1b” proposed in the consultation in the gradual transition approach as the most balanced and operationally viable method for setting durability thresholds for eligible removals. A gradual transition approach allows for early adoption and investment in removal strategies, while setting a clear trajectory toward long-durability, high-integrity removals in line with net zero by 2050. As removals accounting, traceability systems, and technologies mature and scale up, aligning with a like-for-like approach would then be possible. 

Claims (CNZS-C28 – CNZS-C32) 

The VCI recommends a structured approach to climate action claims that balances ambition with accountability:

– Application claims can signal intent but must not imply verified statuses.

– Ambition claims signal alignment with e.g. the 1.5°C pathway through the setting of science-based targets and help contextualize corporate action within a net-zero trajectory.

– Conformance claims, if verified, provide a high-integrity endorsement of validated targets. To uphold credibility, these claims should be accompanied by specific disclosures on the scope and components assessed in the verification process (e.g., Scope 1–3, FLAG, removals).

– Renewal claims demonstrate ongoing alignment and progress.  

Conclusion 

The VCI welcomes the progress made with the draft CNZS V2. As a leading voice for promoting Scope 3 solutions, VCI emphasizes the importance of sector-informed input and practical implementation tools. While CNZS aims for broad applicability, sector-specific tools—like the Supply Shed model, market-based mechanisms (e.g., EACs), and robust reporting frameworks—are essential to bridge guidance and action.

The VCI stands ready to support implementation efforts across diverse value chains. 

Learn more about VCI’s Scope 3 guidance below.