NGOs call on ‘flawed’ SBTi to increase standards for corporate climate targets

The NGOs are calling on the SBTi to align their methodologies with the workings of the UN’s High Level Expert Group.

The High Level Expert Group on Net Zero Emissions Commitments of Non-State Entities was set up by UN Secretary-General António Guterres in March 2022 in order to develop stronger standards and scrutiny of net-zero pledges from non-state entities such as businesses, investors, cities and regions.

At COP27, the High Level Expert Group outlined a new set of key recommendations to help these entities develop and deliver net-zero targets credibly, avoiding common greenwashing pitfalls. The report was welcomed at the time by the SBTi.

The NGOs refer to analysis by Changing Markets which claims that the SBTi is a “flawed” scheme and is well off track from the UN’s recommendations.

Changing Markets claims that SBTi guidance requires companies to report only 67% of their estimated supply chain emissions, compared to 100% under the UN’s proposals. The initiative also makes it optional for methane targets, but the UN High Level Expert Group recommends companies setting net-zero targets should have specific targets for all material GHGs.

Additionally, the charities have criticised that the SBTi continues to host corporate targets aligned to both 2C and “well below” 2C, despite promoting that the baseline for validated companies must be in line with international agreement of 1.5C temperature increase at the least.

Changing Markets Foundation’s chief executive Nusa Urbanic said: “The SBTi is widely regarded as the gold standard for setting net-zero targets, but as it currently stands it is out of step with the latest science and with the UN recommendations. Allowing companies to ignore methane and to only report two thirds of their emissions in a climate emergency makes no sense.

“This allows some of the world’s biggest polluters to simply greenwash their climate commitments and puts any hope of staying within 1.5C of global warming at risk.”

The SBTi has grown exponentially to become the world’s biggest verifier of corporate climate targets. Currently, more than 4,700 companies have pledged to set SBTi-aligned goals to reduce emissions from their operations and value chains, with around 2,400 of them having had these goals officially verified.

Last month, the SBTi published new guidance to outline how larger companies can engage with the supply chains and get suppliers to set their own science-based targets.

It recommends that businesses analyse their supply chain to outline which suppliers should be included under an engagement initiative, based on the total number, type, and size of suppliers. Other factors corporates need to consider include how to leverage change over suppliers, what sourcing and procurement trends need to be considered and categorising supply chain climate and environmental risk levels to uncover hotspots.

Greenwash concerns

However, the NGOs believe that some companies are using the SBTi as a means to greenwash.

The world’s largest meat company, JBS committed to a net-zero target with SBTi in June 2021, but does not yet have those plans verified. SBTi guidance gives companies 24 months to submit plans, after which the original target should “expire”. The charities argue that JBS is still claiming to target net-zero despite that window to submit plans passing. The company has faced accusations in the past regarding massive spikes in emissions since setting the net-zero goal.

JBS recently lost its appeal against The National Advertising Divisions (NAD) ruling to discontinue its claims to be net-zero by 2040.

The NGOs are calling for clarity from the SBTi about the expiration of net-zero targets from certain corporates.