SBTi's nature lane opens a transition-finance book

The Science Based Targets initiative's updated Corporate Net-Zero Standard landed earlier this summer, and most commentary has asked what it demands of companies; the narrower question for transition finance is what it opens up for investment in nature-based climate solutions, today and after 2035. Trellis's analysis gives a direct answer: the door is open through mid-century, and the structure of the standard makes clear that nature-based mitigation is no longer a bolt-on to a reduction strategy but a scheduled, governed line item.

The mechanism is what SBTi calls ongoing emissions responsibility, or OER, a second track that sits alongside the reductions-first foundation. Under the standard, companies are not responsible for ongoing emissions until 2035, but declaring a position is not optional, and voluntary uptake is available now across three tiers: engaged at 1 percent of ongoing emissions, advanced at 10 percent, leadership at 100 percent. Trellis's practical warning is that waiting is a mistake: the governance, procurement relationships, supplier contracts and internal carbon-pricing capability OER will eventually require take years to build, and most companies do not yet have them at the scale the standard will demand. Starting now is how a company arrives at 2035 ready rather than scrambling.

That front-loading matters for finance: if even a meaningful fraction of SBTi-aligned companies begin procuring verified mitigation in 2026 and 2027, the demand curve for nature-based credits is building early rather than flat until 2035, and the companies that get procurement relationships in place first will set the terms. The leadership tier, at 100 percent of ongoing emissions, is the number to watch because voluntary corporate carbon buying has until now been episodic and price-sensitive; the OER framework converts it into a recurring, quantified obligation for any company that wants to be seen as leading.

Nature's place in the standard is explicit: nature is an eligible, recognized activity under SBTi's definition of verified mitigation, which means high-integrity nature-based credits can sit on the OER side of the ledger. It also means the standard avoids the old fallacy that offsets can substitute for direct reduction, a misconception that has plagued voluntary carbon markets for years. In the OER structure, verified mitigation supports the ongoing-responsibility track while deep reductions carry the core emissions trajectory, and the credibility of the whole system depends on the integrity of those credits, exactly where transition finance has been building verification rails.

The reductions-first foundation is unchanged, and that is the right call: OER works alongside deep reductions, never instead of them, with high-integrity credits supporting the ongoing-responsibility track rather than substituting for the core decarbonization trajectory. For finance, a credit market built on substitution logic collapses the moment scrutiny arrives, whereas one built on a separate, explicitly residual obligation is easier to diligence, price, and defend to a regulator. None of this prevents NGOs and progressive companies from setting a higher bar now; the standard is meant to be complemented.

The post-2035 picture holds a footnote Trellis says deserves far more attention: the standard's construction allows verified nature-based mitigation to remain a tool through mid-century, which is more than a narrow detail for project developers. A credit market that has already been through an anchor-buyer shock now has a second, structurally different source of demand—corporate OER budgets with a timetable—and that is the kind of diversified buyer pool the young carbon-removal market has lacked, one that turns the long, uncertain wait for compliance markets into a shorter, more predictable one.

Transition finance has been moving from labeled bonds to hard-to-abate borrowers and verification rails, and the next leg is standardized credit pricing rather than new green labels; the SBTi framework hands the market exactly that—a standardized, time-bound demand signal for a defined category of verified mitigation. The banks, carbon funds and project developers that build forward pricing and procurement products around OER rather than selling spot credits one contract at a time are the ones that will own the next cycle. The standard's tiers give them a ready-made ladder at 1 percent, 10 percent, 100 percent, engagement levels that are the basis for a term structure.