SBTi vs Net Zero: What's the Difference and Which Should Your Company Pursue?

Two acronyms appear repeatedly in the corporate sustainability conversation: SBTi and Net Zero. They are related but distinct concepts, and the difference matters enormously when your company is deciding what kind of climate commitment to make. A Science Based Target (SBT) is a near-term emission reduction goal aligned with climate science. A Net Zero commitment is a long-term endpoint. Understanding how they fit together is essential for any Indian company building a credible decarbonisation strategy.

What Is the Science Based Targets Initiative (SBTi)?

The SBTi is a collaboration between CDP, UN Global Compact, WRI, and WWF that validates corporate emission reduction targets against the requirements of the Paris Agreement. A company with an SBTi-validated target has committed to reducing its Scope 1 and Scope 2 emissions at a rate consistent with limiting global warming to 1.5°C — typically around 4.2% absolute reduction per year. SBTi near-term targets cover the next 5–10 years and must be achieved through actual emission reductions in operations and supply chains, not primarily through carbon credits. The validation process involves submitting target documentation, having it reviewed by SBTi's technical team, and committing to annual progress reporting.

What Is a Net Zero Commitment?

A Net Zero commitment is a pledge to reduce your company's greenhouse gas emissions to as close to zero as possible and to balance any remaining unavoidable emissions through permanent carbon removal. The SBTi's Corporate Net Zero Standard defines Net Zero as reducing absolute emissions by at least 90% from a base year (for most sectors) before neutralising residual emissions. This is different from the loose use of 'carbon neutral' that many companies have adopted — which often involves purchasing low-permanence carbon offsets to compensate for unchanged emissions. True Net Zero requires deep decarbonisation first, with high-quality removal credits only used for the unavoidable residual.

Which Framework Is Right for Indian Companies?

For Indian companies, the practical starting point is almost always setting a near-term SBTi-aligned reduction target for Scope 1 and Scope 2 emissions, with a roadmap for addressing material Scope 3 categories. Net Zero as a 2040 or 2050 commitment provides the long-term strategic direction. The SBTi validation gives the near-term target credibility with investors and international buyers, while the Net Zero framing communicates the long-term ambition. Csquare works with Indian companies to develop emission reduction pathways, assess carbon credit needs, and structure the disclosure framework that supports credible science-based commitments.