Consultation response to SBTi's Net Zero Standard

Ensuring the continued relevance of the Science-Based Targets initiative 

We refer to the Corporate Net-Zero Standard Version 2.0 Consultation Draft published by the Science Based Targets initiative (SBTi). We appreciate the opportunity to provide input and are writing to share our perspectives to emphasise the strategic importance of ensuring that the standards of the SBTi remain both ambitious and achievable.  

Norges Bank Investment Management is the investment management division of the Norwegian Central Bank and manages the Norwegian Government Pension Fund Global. We work to safeguard and build financial wealth for future generations. As of year-end 2024, we managed USD 1,739 billion in assets and hold on average 1.5% of all listed companies globally.  

As a long-term and financial investor, we expect companies in our portfolio to commit to net zero by 2050 or sooner and align their activities with the goals of the Paris Agreement. We also expect them to set science based interim emission reduction targets. We value SBTi’s role in providing a credible framework for assessing corporate climate ambition and have for many years encouraged companies to submit their targets for validation by SBTi.  

However, we have through our company dialogues observed growing challenges with the implementation and verification of science-based targets that we believe merit consideration as SBTi revises its standards. While scientific integrity remains essential, the effectiveness of SBTi's standards ultimately depends on their widespread adoption. Standards that are perceived as overly complex or difficult to implement may over time limit participation to a small subset of companies, rather than driving the broader market transformation necessary to achieve global climate goals.  

Key recommendations for standard development 

Focus on target verification: We are concerned that SBTi is now expanding its scope beyond verifying targets. The draft standard includes elements such as requirements for transition plans, public commitment mandates, fossil fuel policies and supplier engagement. SBTi is also moving towards an enforcement role with a suggested validation model that requires regular progress assessment against fixed five-year cycles, with consequences for underperformance. Some of these new elements could introduce complexity and will be difficult for many companies to implement. While we appreciate the intention to provide a comprehensive framework, we encourage SBTi to first ensure wide-spread adoption and excellence in its core function of target verification before expanding its scope. Furthermore, SBTi should take a more considered approach to what role it seeks to play in assessing and following up corporate actions on climate change, versus that of other stakeholders. For instance, auditors, investors, regulators, and civil society may be better suited to assess performance and hold companies accountable to the targets they set.  

Align with Paris Agreement, not 1.5 degrees: The requirement for alignment with 1.5°C pathways may create barriers to adoption for many companies. The Paris Agreement encompasses a range of temperature outcomes, allowing for different transition pathways. We recognise that every additional fraction of a degree of warming may have severe consequences, but ultimately believe that unrealistic ambitions foster less action, not more. We therefore encourage SBTi to consider a more flexible approach that recognises different levels of ambition. This would allow companies to begin their decarbonisation journey with achievable targets while providing recognition for those able to align with more ambitious pathways. Such an approach would maintain the connection to climate science while potentially increasing participation across sectors, particularly those facing significant technological or economic challenges.  

Simplify and clarify the framework: The current consultation draft contains prescriptive and detailed requirements across more than 100 pages, creating a significant barrier for adoption. We encourage SBTi to simplify the standard, developing a concise core document that focuses on essential requirements. Sector-specific standards and supplementary, technical methodologies should be structured as modular extensions accessed only when relevant. This approach would make the standard more approachable for all companies, especially those with limited sustainability resources. 

Recognise real-world constraints in sector methodologies: We support SBTi's acknowledgment of sector-specific differences, and the varying decarbonisation challenges they present. However, the current framework has seen limited adoption in some critical sectors where methodologies are still under development. Additionally, we increasingly hear that companies in other sectors are moving away from SBTi verification, citing complexity and feasibility concerns. As these sectoral approaches continue to be developed, they should be grounded in the experiences companies have made through multiple strategy cycles and capital allocation decisions based on available technology, regulatory developments, and market conditions. We therefore encourage SBTi to incorporate practical implementation factors that reflect the genuine pace at which transformation can occur across different industries, while maintaining scientific integrity and long-term climate ambition. This would encourage broader participation from hard-to-abate sectors without compromising the standard's credibility. 

Balancing scientific rigour with achievability 

We value SBTi’s role in verifying corporate climate targets and believe the organisation can maintain its central role by evolving into a more inclusive framework that prioritises validating targets, aligns pragmatically with technological and market realities, and presents requirements in clear, concise language. 

We believe that the ultimate measure of success is driving widespread, meaningful action across high-emission sectors - not technical perfectionism. Success should be measured by the volume of global emissions covered by verified targets, rather than just the number of companies participating. If the standard remains overly complex and unrealistic, companies will inevitably seek alternative frameworks or abandon formal verification.  

The consultation presents a timely opportunity to evaluate the current approach, and we urge SBTi to strengthen its position by balancing scientific rigor with practical implementation. We appreciate receptiveness to stakeholder feedback at this important juncture and look forward to contributing our perspectives and collaborating with you to ensure the continued relevance of the Science-Based Targets initiative. 

Sincerely, 

Carine Smith Ihenacho
Chief Governance and Compliance Officer

Eivind Fliflet
Head of Environmental Team, Active Ownership