SBTi ‘will not shy away from debate’ over corporate carbon credit use

The SBTi stated earlier this month that it will soon publish updated guidance on how companies can use ‘environmental attribute certificates’ including carbon credits to account for the delivery of their climate goals, specifically those relating to Scope 3 (indirect) emissions.

This approach has been fiercely debated within the corporate sustainability space and has reportedly caused a rift within the SBTi itself. Following a statement from the SBTi, more than 30 of the technical and scientific advisory groups urged it to immediately retract a statement indicating that it could allow businesses to use carbon offsetting to a greater extent.

In a new letter published late last week, the SBTi’s chief executive Luiz Amaral regretted the “concern and distress this situation has caused” and that no standards had been changed, and wouldn’t be without public consultation.

Potential changes are set to come about through work to update the Net-Zero Standard, which first launched in late 2021 and requires companies to pledge to reduce their absolute emissions across all scopes by 90% by 2050 at the latest. Credits are currently permitted to be used to address no more than 10% of Scope 3 emissions.

Surveys revealed that accurately measuring – and properly planning to reduce – Scope 3 emissions was a common barrier to alignment with the SBTi Net-Zero Standard for large businesses in various industries.

In response to conversations from the SBTi that updates may relax guidelines on the use of offsets, Amaral stated the SBTi would not be afraid to “discuss, revisit and rethink our approach”.

“ The mitigation hierarchy shall always apply: companies cannot buy their way out of acting,” Amaral wrote. “Also, the battle on climate change will be won or lost on scope 3, as it is an engine to promote change. One actor in a supply chain influences the next – creating the global movement that we need.

“But we also must recognise that not all Scope 3 emissions are created equal. Some are more material, some less so. It’s perhaps a sign of our maturity as an organization that we do not shy away from even the most challenging debates – and I for one am not afraid to discuss, revisit and rethink our approach based on scientific evidence and following pre-established processes.”

Amaral added that the SBTi would continue to adhere to the Standard Operating Procedures for Development of SBTi Standards, which must be followed before making changes to any of our standards.

The SBTi has stated that it will consult on changes to Scope 3 guidance before publishing new advice.

Read more: Why are businesses struggling to verify their science-based net-zero targets?