News
August 11, 2026
After more than a decade of helping companies set ambitious climate targets, the Science Based Targets initiative (SBTi) has reached a conclusion: setting a target is one thing, achieving it is another.
That thinking is reflected in the Corporate Net-Zero Standard Version 2.0 (CNZS V2.0), released in June 2026. It is the biggest update to the framework since 2021, and marks a shift from focusing primarily on target-setting to placing greater emphasis on implementation and progress. For dairy and beef companies, the changes go well beyond compliance or reporting requirements.
Key takeaway: SBTi's Corporate Net-Zero Standard V2.0 puts more focus on how companies deliver emissions reductions, not just the targets they commit to. For the first time, it gives food companies structured ways to share Scope 3 responsibilities across their value chain, count on-farm reductions toward their targets, and use market-based instruments where direct action is not sufficient. For dairy and beef companies investing in on-farm methane reduction through Bovaer®, these changes create a recognized, auditable pathway to turn that investment into verified Scope 3 progress.
The original framework asked companies to set science-based Scope 3 targets covering their direct supply chain and follow through. For businesses operating in complex agricultural supply chains where direct traceability is limited, that has often been easier said than done. Scope 3 emissions account for 70–90% of a food company's footprint, yet those emissions are tied to thousands of farmers and suppliers, each progressing at a different pace, most serving fragmented downstream customer chains.
The result was a gap between climate commitments and the practical ability to deliver them. V2.0 is designed to close that gap. It gives companies more flexibility, a stronger implementation focus, and new pathways for value chain decarbonization.
V2.0 reorganizes the standard into six chapters, covering everything from governance and base year assessment to implementation, progress reporting, and ongoing emissions responsibility. Two updates are most relevant to dairy and beef supply chains: a new implementation hierarchy for Scope 3 (Chapter 4: Target Implementation), and the formal recognition of market-based instruments.
V2.0 changes Scope 3 in two distinct ways. First, target-setting itself becomes more flexible: companies can choose overarching emissions reduction targets, overarching supplier/customer alignment targets, or category- and activity-specific targets. Under V1, companies could combine emissions reduction and supplier engagement targets to meet a coverage threshold, but had fewer structured target types to choose from. Second, and separately, one of the most significant changes in V2.0 is that it formally defines how companies should pursue whichever target they set, in a specific order, through an implementation hierarchy that V1 did not require.
Companies must now start with the most direct action available and move to broader approaches only when direct action is not sufficient:
Activity level: direct actions within company operations and value chains. A dairy processor that incentivizes its supplying farmers to use Bovaer® is acting at this level. The reduction happens at the emission source and is directly traceable to the company's Scope 3 inventory.
Activity-pool level: actions across the broader supply shed a company sources from, including farms that are not direct suppliers. A supply shed, in this context, is the geographic or operational area from which a company sources a commodity — for example, all farms whose milk enters the same collection network, whether or not they are directly contracted. A processor funding Bovaer® adoption across farms in that shared network, beyond its own direct suppliers, is acting at this level.
Sector level: broader actions that support decarbonization of the wider industry, such as co-funding a national dairy methane reduction initiative or a sector-wide methane fund.
Under V2.0, farm-level methane reduction counts toward a company's Scope 3 target. That was contested under the previous version. It is now clearly established, and it is where the standard expects companies to begin.
Scope 3 in SBTi CNZS V2 — implementation hierarchy. Source: dsm-firmenich, July 2026.
In most dairy supply chains, milk from hundreds of farms flows into shared collection tankers. A processor cannot physically separate milk from farms using Bovaer® from milk produced conventionally. Under V1, that left Scope 3 progress on reductions across the wider supply shed in a grey zone, without a sanctioned way to claim it. V2.0 addresses that with commodity certificates.
A commodity certificate — the tool that applies at the activity-pool level, using for example a book-and-claim chain-of-custody model — works as follows:
When farms in a supply shed use Bovaer® and generate verified methane reductions, those reductions are registered in an auditable system. A dairy processor can then purchase a certificate representing those reductions and count them toward its Scope 3 target progress, without needing to physically trace the milk back to individual farms. The certificate is reported as a separate line alongside the physical GHG inventory, not folded into it. The reduction is real and verified at the source. The certificate is how it gets attributed to the buyer.
This connects directly to the implementation hierarchy. Commodity certificates apply at the activity-pool level, not at the activity level. Companies are expected to pursue direct, traceable action with their own suppliers first. Where that is not sufficient to cover the full supply shed, certificates provide a recognized way to account for the remaining reductions.
For a dairy company using Bovaer® across a supply shed, if the verified methane reductions from those farms exceed the milk volume the company itself physically purchases, it can report the additional reductions through a certificate.
To be eligible under V2.0, certificates must meet three requirements: reductions must be matched within a 12-month window, grounded in physical volumes, and registered in a system that prevents double counting. The SBTi plans to publish a Claims Policy in Q1 2027 on how companies can communicate this kind of progress.
Bovaer® is a feed supplement for cattle that reduces the activity of the enzyme responsible for methane production in the rumen. Across more than 140 peer-reviewed publications and 150+ on-farm studies, it has shown an average methane reduction of 30% in dairy cows and 45% in beef feedlot cattle, with no effect on milk quality, herd health, or farm routines.
Under V2.0, a dairy or beef company that works with its supplying farmers to adopt Bovaer® is taking activity-level Scope 3 action, the highest tier in the hierarchy. The verified reductions from those farms are directly attributable to the company's Scope 3 target progress. Where full physical traceability across a supply shed is not possible, those reductions also form the basis for a commodity certificate at the activity-pool level. Bovaer® is therefore relevant at two levels of the V2.0 hierarchy, depending on how a company's supply chain is structured.
Bovaer® is commercially available across 25+ countries and approved in 70+ countries as of 2026. Category A companies under V2.0, those with net turnover above €450 million or more than 1,000 full-time employees, are now required to develop formal transition plans. For any dairy or beef company with significant livestock supply chains, Bovaer® is one of the few Scope 3 solutions that is scientifically verified and commercially available at scale today.
V2.0 validations open on 1 February 2027. Until then, companies setting or renewing targets should continue using V1.3.1. From 1 February 2028, V2.0 is the only route for new submissions.
For dairy and beef companies preparing for that transition:
V2.0 gives dairy and beef companies more structure and more tools to act on Scope 3 emissions across their value chain. Further evidence and guidance are still needed on how activity-pool and sector-level approaches work in practice across different supply chains. This is where Bovaer® is well placed: the reductions behind a commodity certificate are grounded in direct, verified farm-level methane measurement. That is a real advantage for companies weighing where to focus their Scope 3 flexibility under V2.0.
Contact the Bovaer® team to explore how an on-farm methane reduction program fits into your V2.0 transition plan.
