In the last few days, a huge row has emerged about the Science Based Targets initiative and the organisation that runs it.
We’ve written many times about carbon credits and the whole offsetting industry which enables organisations to claim they are “reducing emissions” or heading towards net zero when they are doing nothing of the kind. They are basically paying a fee so that they don’t need to take real action in terms of reducing emissions. Now some offsetting schemes may be genuinely beneficial; some proponents including John Kerry claim they are essential to drive funding into important sustainability projects. But many offsets and carbon credit schemes have proved to be dubious or even criminal, so arguably we cannot rely on this to address climate change. And the fundamental problem remains that they help organisations which don’t want to take real action.
So the general view from most experts and campaigning groups is that firms should not be allowed to count carbon credits towards their net zero-type statements and claims. But this issue has now caused a huge row in the SBTi organisation.
SBTi is a not for profit – a “corporate climate action organization that enables companies and financial institutions worldwide to play their part in combating the climate crisis”. It is a verification body backed by a coalition of non-profit groups that sets the standards, develops tools and guidance to help organisations set emissions reduction targets that are in line with the 2050 net-zero target. Now even before this latest crisis, some observers have pointed out that having the same organisation setting the standards, acting as the arbiter on whether organisations are meeting those standards, and charging for the process of evaluation, looks like an inherent conflict of interest. Indeed, some suggest the targets verified by SBTi are not really “science-based” at all.
In any case, until now, SBTi has not been keen on organisations counting carbon credits and offsets as part of their carbon reduction plans. But last week (the 9th) the Board of Trustees of SBTi issued a statement saying that organisations would now be allowed to include carbon credits in their calculations. “SBTi has decided to extend their use for the purpose of abatement of Scope 3 related emissions beyond the current limits … This will entail the definition by SBTi of specific guardrails and thresholds as well as the rules to be applied for these certificates to be considered valid for Scope 3 emissions abatement purposes respecting the principles of mitigation hierarchy”.
But many SBTi staff immediately revolted, saying they did not agree with this, and published an extraordinary open letter. It doesn’t just say “we don’t agree with this move”, it basically says the Trustees have no authority to change the rules in this way and that stakeholders should ignore this new proclamation. They point out that SBTi has acted outside its own stated governance processes. Its technical committee is already doing a serious analysis of carbon credits, but has not yet reported.
“The SBTi’s standards will not change until we have completed the necessary research, consultation, and governance steps — all specified within SBTi procedures. Carbon credits are not permitted for emissions reductions according to the Corporate Net-Zero Standard nor the Financial Institutions Guidance”.
One of the biggest financial supporters of the SBTi organisation is the Bezos Earth Fund, and some observers are suspicious because there were recent meetings between SBTi leadership and the fund. SBTi has also come under pressure from large firms and proponents of carbon credits to allow their use at least as an interim step on the way to net zero. So did this external pressure push the SBTi Trustees to act in this way, and seemingly undermine their own processes and governance?
But then on the 12th, the Board of Trustees issued a “clarification statement”, as an footnote to the previous announcement, saying, “no change has been made to SBTi current standards. Any use of EACs for Scope 3 will be informed by evidence. Any change to SBTi standards, including use of EACs for Scope 3, will be conducted according to previously approved SBTi Standard Operating Procedure for developing standards …”
A discussion paper will be published in July. So why issue the first statement? It just looks like a huge own goal for SBTi and has got people questioning more widely whether the organisation is actually fit for purpose, or whether it is being “corrupted” by its corporate paymasters.
More to come on this no doubt. But if your organisation was thinking about signing up for the SBTi, I might just put that on hold for the moment.