On April 14, 2026, SBTi Services released version 1.7 of its Criteria Assessment Indicators (CAI), i.e. the document governing how corporate targets are validated. Two weeks later, the SBTi published an official blog post explaining the rationale.
The change is technical, targeted, and consequential. Here's what you need to know.
What changed, exactly?
The update revises two criteria:
C16.1: minimum ambition for absolute Scope 1 and 2 targets
C18.1: minimum ambition for absolute Scope 3 targets
Both rely on the Absolute Contraction Approach (ACA) introduced in CNZS v1.3, which calculates the total emission reduction target based on the time remaining between a company's target year and 2020. The further the base year from 2020, the steeper the required trajectory (for a given target year).
The problem is that, applied to companies setting targets from 2025 and 2026 onwards, the formula produced increasingly prohibitive annual reduction rates. A company with a 2023 or 2024 base year could face minimum required reductions of 8%, 10%, or more per year, which is well beyond what most business models can achieve given the time needed to implement decarbonization actions in the real world.
What the new formula does
The revised method recalibrates reduction rates by factoring in both a company's base year, most recent year and target year, rather than only the time between the target year and 2020. Reductions are distributed more evenly across the full pathway, rather than being front-loaded for companies setting targets later.
Key numbers that remain unchanged:
4.2% minimum annual reduction rate for Scope 1+2 (C16.1, 1.5°C trajectory)
2.5% minimum annual reduction rate for Scope 3 (C18.1, WB2C trajectory)
These floors apply for all couples target year/base year. What changes is the formula used to calculate required ambition above those floors for each company's specific situation. In addition, the ambition has been increased for Scope 2 emissions, as the SBTi now considers that residual emissions level for electricity consumption shall be reached by 2040, 10 years before Scope 1 and Scope 3 emissions. In practice, the annual reduction rate for Scope 2 will always be higher than 4.2%, and varies with the base year (around 6% for base year between 2024 and 2026).
It must be noted that the intensity targets for Scope 3 have not been modified. The ambition level is still calculated from 2020 and not the base year.
The asymmetry that matters most
Like in the previous version of the framework, the new method incorporates a company's progress since its base year, called forward-looking ambition, and this cuts both ways:
Emissions have fallen since base year: Progress is recognized. The required near-term trajectory may be less steep, depending on the company past performance
Emissions have risen since the base year: The minimum annual reduction rate is applied.
This is not a blanket reduction in required ambition. It rewards early action and penalizes backsliding.
Who does this affect?
The SBTi specifies this update is relevant for companies setting targets in 2026 and 2027, including:
First-time submitters: particularly those with recent base years who previously found the required rates unworkable.
Companies renewing targets: whether as part of the mandatory five-year review or otherwise; the updated calculation will apply automatically in the Validation Portal.
Companies that previously ruled out SBTi validation: the recalibration may make the process viable where it wasn't before.
Investors assessing portfolio companies' commitments: the direction of impact is company-specific and depends on each company's emissions trajectory since their base year; "validated under v1.7" does not automatically mean "less ambitious".
The update does not affect previously validated targets. They remain valid and aligned with SBTi requirements. The update does not affect SMEs, as Scope 1 & 2 targets are still calculated using the previous version of the ACA.
Why now?
Two reasons, both stated explicitly by the SBTi:
Alignment with CNZS v2.0. The revised ACA is closely aligned with the methodology being developed for the forthcoming Corporate Net-Zero Standard v2.0, currently under finalisation. Updating now creates continuity and supports a smoother transition.
The old method was becoming unworkable. Designed for the early 2020s, the previous formula was increasingly incompatible with the realities of companies setting targets later in the decade.
The revision was treated as an urgent update and approved by the SBTi's independent Technical Council. No other criteria of the Standard have changed.
Want to go deeper?
We're hosting a dedicated CarbonTalk webinar on June 3rd, 2026 to walk through the methodology change, model the implications across different company situations, and answer your questions directly.
Sources: SBTi Services Criteria Assessment Indicators v1.7 (April 14, 2026); SBTi Corporate Net-Zero Standard v1.3.1 Method Appendix (April 2026); SBTi — "The SBTi updates the Absolute Contraction Approach to improve consistency and implementation, while maintaining net-zero ambition" (April 29, 2026).