Dive Brief:
- The Science Based Targets initiative said this week it will allow for expanded use of carbon credits as part of corporations’ goals to tackle scope 3 emissions when it issues a first draft of its guidance on the topic in July.
- SBTi, a global organization advocating for corporations to set net-zero goals aligned with climate science, said in a statement Tuesday that while there is “ongoing healthy debate” on the efficacy of carbon offsetting, it “will not embark in validating carbon credits quality.”
- The announcement was received positively by some experts within the corporate sustainability space. However, staff at SBTi has called for the resignation of its CEO and expressed concerns the move could lead to additional greenwashing, according to a letter to management seen by The Guardian.
Dive Insight:
SBTi — a global charity partnered with the Carbon Disclosure Project, the United Nations Global Compact and World Resources Institute, among others — said it recently completed a six-month “wide consultative effort” on how to revise its Corporate Net-Zero Standard to include additional guidance on scope 3 emissions abatement.
The organization said it will define specific guardrails and thresholds, in addition to rules, for carbon offset certifications to be considered valid. However, it won’t evaluate the quality of those certifications because it believes other organizations are “better positioned” for that process.
“SBTi recognizes that, when properly supported by policies, standards and procedures based on scientific evidence, the use of environmental attribute certificates for abatement purposes on scope 3 emissions could function as an additional tool to tackle climate change,” the statement said.
The organization said it will conduct consultations with a broader set of stakeholders for its scope 3 guidance revision, which will include “the responsible use of environmental attribute certificates in target setting.” SBTi said it believes allowing for the broader use of carbon offsets will accelerate supply chain decarbonization “with compensation logic,” while companies use innovation and technological advances to eliminate emissions “at the root.”
Scrutiny on the validity of the emissions abated by carbon or other environmental offsets ramped up in 2023.
The European Parliament initiated a probe in June into whether companies who claimed they were “carbon neutral” through the use of carbon offsets were engaging in greenwashing. Separate studies revealed that carbon offsets used by corporations like Shell and Disney could potentially make global warming worse, and others linked to more than 60 million purchased carbon credits had barely reduced deforestation. This led some to question whether the use of carbon credits is a valuable tool to abate emissions or could constitute greenwashing.
Zander Dale, a senior consultant for climate business consultancy EcoAct, called the revised strategy a “forward-thinking move” by SBTi that expands corporations’ net-zero toolkit. EcoAct consults on corporations’ climate transition goals, including Daimler, Etsy and financial services company Legal & General.
“This marks a pivotal moment for companies committed to genuine climate action,” Dale said in an emailed statement to ESG Dive. “It highlights the immediate necessity of strategically incorporating carbon credits, among other tools, into our climate and sustainability strategies, responding to the urgent call for collective action amidst the escalating climate emergency and nature loss.”
SBTi’s staff, however, responded to the move by calling for CEO Luiz Fernando do Amaral and “any board members who supported the decision” to resign Thursday, The Guardian reported. Staff and advisers at the organization were upset because they said they were not consulted prior to the announcement, and the strategy is not based in science, according to the report.
“We stand ready to support any efforts aimed at ensuring that the SBTi does not become a greenwashing platform where decisions are unduly influenced by lobbyists, driven by potential conflicts of interest and poor adherence to existing governance procedures,” the Guardian reported the statement read. “In the event that our concerns are not addressed, SBTi staff will have no choice but to take further action.”
SBTi did not respond to requests for comment or to confirm the existence of the staff letter in time for publication.
