SBTi Ongoing Emissions Responsibility (OER) Explained
What Companies Need to Know
A short, neutral guide to the OER program in SBTi’s Corporate Net-Zero Standard V2.0: what it is, what it asks of companies, what it costs and when it starts.
Updated September 2026. Reflects the final Corporate Net-Zero Standard V2.0 published 11 June 2026.
Key facts
Standard: SBTi Corporate Net-Zero Standard V2.0, published 11 June 2026; effective for target validation from 1 February 2027. Version 1 closes to new submissions at the end of 2027.
Participation: Optional. From 1 February 2027 every company validating under V2.0 must state whether it intends to take part (criterion CNZS-C38).
Three recognition levels: Engaged (≥1% of ongoing scope 1–3 emissions), Advanced (100% of scope 1+2 plus scope 3 to reach ≥10% of total, US$20/tCO2e), Leadership (100% of scope 1–3, US$80/tCO2e budget plus verified outcomes for the full volume).
Separate from targets: OER contributions are never netted from the inventory or counted toward a science-based target.
From 2035: Category A companies must support eligible carbon removals equal to at least 1% of ongoing emissions, rising to 100% by the net-zero year (CNZS-C45). This is a removals requirement, not a requirement to join the recognition program.
Still to come: SBTi’s process for recognizing eligible instruments (Q4 2026) and its Claims Policy (Q1 2027).
What is SBTi Ongoing Emissions Responsibility (OER)?
Ongoing emissions are the greenhouse gases a company continues to release, across all three scopes, while it works toward its net-zero target. Ongoing Emissions Responsibility (OER) is the optional recognition program in SBTi’s Corporate Net-Zero Standard V2.0 that recognizes companies which take financial responsibility for a defined share of those emissions, on top of, and separately from, cutting them.
SBTi’s framing is that decarbonizing operations and value chains remains the priority, but that reaching global net zero also requires finance to flow to climate action beyond any single company’s value chain. OER gives that beyond-value-chain action a defined structure: recognition levels, coverage rules, integrity criteria, reporting and independent assurance.
Is OER mandatory?
No. The recognition program is optional, but declaring a position is not. From 1 February 2027, companies validating targets under V2.0 must indicate whether they intend to take part. SBTi has indicated that companies opting out will be asked to explain why, and that participation intent will be visible on the SBTi Dashboard alongside the company’s targets.
Two later obligations are often confused with OER and are worth separating:
From 2035, Category A companies (broadly, large companies and companies in high-income countries above SBTi’s size or emissions thresholds) must support eligible carbon removals equal to at least 1% of ongoing scope 1–3 emissions, including a defined and increasing share of long-lived removals, rising toward 100% by the net-zero year. Category B companies (all others) are not subject to this requirement.
At the net-zero target year and after, all companies must reduce emissions to zero or residual levels and neutralize residual emissions with eligible carbon removals.
Put simply: OER is optional now. From 2035, large (Category A) companies will have to pay for carbon removals covering at least 1% of their ongoing emissions, whether or not they want SBTi recognition. Going further than that minimum, at the Engaged, Advanced or Leadership level, stays voluntary. And the direction of travel is clear: the Standard is moving toward removals, and long-lived removals in particular.
How is OER different from BVCM and neutralization?
Beyond Value Chain Mitigation (BVCM) is the general principle of financing mitigation outside a company’s own value chain. It is a category of action, not a program.
OER is SBTi’s structured way of recognizing BVCM during the transition. It sets recognition levels, coverage, integrity criteria, reporting and assurance requirements.
Neutralization applies at and after the net-zero target year, when residual emissions must be counterbalanced with eligible carbon removals.
In short: BVCM is the principle, OER is the recognized framework for the journey, and neutralization is the end-state requirement.
What are the three OER recognition levels?
V2.0 establishes three levels, distinguished by how much of a company’s ongoing emissions are covered and how contributions are delivered. Coverage is assessed over the five-year near-term target cycle using the company’s physical GHG inventory (location-based scope 2).
Level | Emissions covered | How contributions are delivered |
Engaged | At least 1% of total ongoing scope 1, 2 and 3 emissions | Verified mitigation outcomes equal to the covered volume, or a contribution budget. SBTi recommends at least US$20/tCO2e for the budget route but does not mandate a price at this level. |
Advanced | 100% of ongoing scope 1 and 2, plus enough scope 3 to reach at least 10% of total ongoing emissions | Verified mitigation outcomes equal to the covered volume, or a contribution budget of US$20/tCO2e of covered emissions. |
Leadership (Category A) | 100% of total ongoing scope 1, 2 and 3 emissions | Both: a contribution budget of US$80/tCO2e and verified mitigation outcomes equal to the full covered volume. Any remaining budget supports further mitigation or other eligible climate action. |
Leadership (Category B) | 100% of ongoing scope 1 and 2, plus enough scope 3 to reach at least 10% of total ongoing emissions | The same US$80/tCO2e budget and verified-outcome requirements, applied to the smaller covered volume. |
Recognition is assessed and awarded at the end-of-cycle assessment, based on progress against validated targets and delivery of the contributions required by the selected level (CNZS-C39). A company that has not delivered on its required decarbonization targets is not recognized, whatever it has spent.
What does OER cost?
Cost depends on the level chosen, the company’s emissions profile and the price paid for outcomes. SBTi’s own modelling during consultation put the Engaged level at roughly 0.1% of annual profit for lighter sectors and about 0.4% for emissions-intensive sectors. The illustration below uses a company with 1,000,000 tCO2e of ongoing emissions a year, of which 150,000 tCO2e is scope 1 and 2.
Level | Volume covered | Price basis | Indicative annual budget |
Engaged | 10,000 tCO2e (1%) | US$20 recommended | US$200,000 |
Advanced | 150,000 tCO2e (scope 1+2 already exceeds 10% of total) | US$20 required | US$3,000,000 |
Leadership (Cat. A) | 1,000,000 tCO2e (100%) | US$80 required, plus outcomes for the full volume | US$80,000,000 |
Illustrative only. Under the outcome route a company can instead retire verified mitigation outcomes for the covered volume at whatever price it pays; contribution budgets should be disbursed across the five-year cycle rather than in a single year.
Can OER contributions count toward an SBTi target?
No. Companies must account for supported mitigation outcomes separately from their inventory and target progress and prevent double claiming (CNZS-C43). OER contributions do not reduce a reported footprint, cannot be used to claim that a reduction target was met, and tonnes used for OER recognition cannot be reused for the 2035 removals requirement or for neutralization at net zero.
What counts as an eligible OER contribution?
During the voluntary phase (2027 to 2035) SBTi does not prescribe a single mitigation type. Contributions must support verified mitigation outcomes and/or other eligible climate actions (CNZS-C41). Per SBTi’s key terms, verified mitigation outcomes are results that are observed, measured and independently assured after the fact, from:
emissions reductions from sources outside the company’s value chain;
the protection, restoration or enhancement of natural carbon sinks; or
carbon removal and storage.
Outcomes must be ex-post and generated within the five years before the reporting year. Under the contribution-budget route, remaining funds can also support other eligible climate action such as advanced market commitments, low-carbon R&D, adaptation and resilience, or loss-and-damage response.
Flexibility on type is not flexibility on quality. Supported activities must meet recognized third-party high-integrity criteria where applicable and SBTi’s minimum integrity criteria (CNZS-C42): conservative quantification, additionality, leakage controls, reversal safeguards, unique claiming and appropriate retirement where credits are used. SBTi will publish its process for formally recognizing instruments in Q4 2026; until then the ICVCM Core Carbon Principles are the most widely used quality benchmark.
For how forest-protection and other nature-based credits fit, see the companion article: REDD+ and Nature-Based Credits Under SBTi OER.
What happens in 2035 and at net zero?
From 2035, Category A companies must support eligible carbon removals equal to at least 1% of ongoing scope 1–3 emissions, with a defined and increasing share of long-lived removals (CNZS-C45). SBTi has signalled that this share rises over time and that the detailed proportions will be set in a future revision of the Standard before 2035. At the net-zero target year, all residual emissions must be neutralized with eligible carbon removals (CNZS-C46).
The practical implication: emissions-reduction credits and natural-sink protection qualify for OER recognition during the voluntary phase, but only removals satisfy the 2035 requirement and neutralization.
Looking further ahead, an important question remains: how should the ongoing climate value of preventing deforestation be recognized alongside removals at net zero? Reaching net zero will not eliminate the need to prevent new emissions or protect the natural carbon sinks on which a stable climate depends. As the science and carbon markets evolve, this may be an important area for future climate frameworks to examine.
What do companies need to do, and when?
Now: decide a position on OER ahead of validation under V2.0, and prepare the rationale if opting out.
Q4 2026: review SBTi’s instrument-recognition process and interim accounting and reporting guidance when published.
1 February 2027: V2.0 opens for validation; intent to participate is declared; OER recognition levels open.
Q1 2027: Claims Policy published, defining what companies may say publicly about OER recognition.
Across the five-year cycle: deliver contributions, keep OER accounting separate from target accounting, report coverage, spending and outcomes, and obtain independent assurance.
End of cycle: recognition assessed and displayed on the SBTi Dashboard.
