The Science Based Targets initiative (SBTi) has revealed further details on how it plans to assess and potentially revise its corporate net-zero standards, a move that could controversially allow companies to make wider use of carbon credits to offset their value chain emissions.
The non-profit organization is currently revising and updating its Corporate Net Zero Standard, which outlines what companies need to do to achieve SBTi validation for their 1.5°C-aligned climate targets. It plans to publish the proposed revisions in July this year.
The planned update takes place as part of SBTi’s regular review cycle, which requires the standard to be revised every two to five years. But the organization sparked a fierce internal row last month after its board publicly announced its intention to relax the rules to allow companies to use more carbon offsets to tackle their supply chain (or Scope 3) emissions.
This followed growing concerns among companies about their ability to fully decarbonize their supply chains, which are widely regarded as the largest and most challenging source of corporate emissions to tackle. Several of the SBTi’s five stakeholders – including the We Mean Business coalition of leading companies – expressed support for adapting the SBTi’s Net Zero Standard to give companies more room to use carbon offsets to improve their Scope 3 emissions.
However, the SBTi board’s initial statement sparked major backlash from several environmental groups and sparked an internal staff revolt at the organization, as employees accused the board of flouting the official process for updating the influential standards.
Opponents of the proposed changes have warned that they risk undermining the integrity of the SBTi-approved targets by allowing companies to increase their reliance on carbon offsets, which critics accuse of routinely failing to deliver promised emissions savings and divert attention from efforts to reduce emissions at source.
The SBTi board insisted there had been a misunderstanding and no changes have yet been made to the Corporate Net Zero Standard, but plans to continue with the review process, with the proposed changes due to be unveiled in July.
Yesterday, the standards-setting body said its review process aims to bring its standards in line with the latest science and best practices, including updates from the Intergovernmental Panel on Climate Change (IPCC) and the UN Secretary-General’s expert group on area of net zero emissions. promises. It also aims to improve integration and interoperability between the SBTi Net Zero Standard and other external climate frameworks and standards.
Crucially, the report also said that another key aim of the review process is to ‘address challenges associated with setting and implementing Scope 3 targets’. But it stressed that any updates would be delivered through the SBTi’s extensive consultation process.
“No decisions have been made regarding the revision of this standard,” it said in a statement. “Any decision on changes to the standard will be made after a rigorous process of research, consultation, pilot testing, Technical Board approval and approval by the SBTi Board of Trustees.”
The SBTi has also launched a call for evidence as part of a consultation on the effectiveness of carbon credits in offsetting companies’ supply chain emissions, which will be included in the report outlining possible proposed changes in July. It also plans to simultaneously publish “an independent third-party systematic review of this topic, based on peer-reviewed literature.”
Following this, a full draft of a new Corporate Net Zero Standard will be released for public consultation in the final quarter of this year, with the SBTi yesterday emphasizing that any feedback received “will be made public and reviewed by SBTi’s technical department to inform development of the standard”.
It remains to be seen how the SBTi plans to bridge the gap between those who argue that carbon credits should play an important role in meeting net zero targets, and those who insist that they cannot be trusted to deliver the promised emissions savings and therefore undermine the credibility of climate policy. net zero targets of companies.
Reuters reported yesterday it had seen an internal SBTi paper, based on a review of evidence in scientific papers and submissions made as part of its current consultation, which concluded that carbon credits are largely ineffective in tackling corporate supply chain emissions.
The assessment’s findings are subject to further analysis and review, including by SBTi’s panel of global climate scientists and experts, but the document could pose a major hurdle to proposals to allow broader use of carbon credits to Address Scope 3 emissions.
The news agency reported that the paper stated that “higher quality empirical and observational evidence suggests that some or most emissions reduction credits are ineffective in achieving emissions reductions.”
A spokesperson for SBTi told the news agency that investigations into this subject had not yet been completed and that there were no interim findings at this stage. “Once we complete the analysis, we will make the results public. Until then, we cannot comment on the evidence submitted,” they said.
Advocates for broader use of carbon offsets acknowledge that there have been issues with the effectiveness of carbon credit projects, but insist that the development of more robust standards and verification processes, as well as the rise of carbon removal engineering projects, will address concerns about carbon credit. integrity.
As such, they argue that high-integrity carbon credits can play a key role in achieving corporate net-zero targets, while also helping to develop a carbon removal sector that will be crucial to achieving economy-wide net-zero targets to achieve.
They also highlighted that the proposed changes are limited to allowing wider use of offsets to address supply chain emissions and that companies with SBTi-approved net zero targets would still be required to reduce direct emissions to reduce it at the source.
However, many environmental groups remain deeply skeptical that the voluntary carbon credit market can deliver high-integrity credits at scale, following numerous scandals surrounding projects that have failed to deliver promised emissions savings.
You can now register at attend the fifth annual Net Zero Festivalwhich is organized by BusinessGreen from 22 to 23 October at the Business Design Center in London.