Updated Apr 12, 2024 - Energy & Environment

Emissions standards group roiled by carbon controversy

Illustration of a fist grasping a sprout with a few leaves

Illustration: Natalie Peeples/Axios

A top arbiter of corporate climate plans faces an internal revolt over a decision by its leadership to endorse tapping the carbon markets, and using carbon offsets, as an emissions-cutting tool.

Why it matters: The Science-Based Targets Initiative is viewed as one of the most stringent, science-based groups. Companies strive to meet its targets and methodology to claim their climate action bona fides.

The latest: The staff's opposition yielded action from the board, which issued a "clarification" Friday noting that no standards have yet been changed, and normal group procedures would be followed before they are.

Yes, but: The statement indicates the group is moving toward allowing some form of carbon markets' involvement for counting company scope 3 emissions cuts.

  • "In July, a discussion paper with a draft proposal from SBTi about potential changes to Scope 3 will be published which will feed into the standard draft," the clarification states.

Zoom in: On April 9, allegedly acting on its own, SBTi's board announced that it would allow companies to use environmental attribute certificates (EACs) — including carbon markets — to reduce the emissions that come from their supply chains and users of their products.

Staff and advisors to SBTi rejected the move, writing to demand the ouster of the organization's CEO and board members who supported the new policy, and to get the move reversed.

What they're saying: "This statement suggests it is written on behalf of all SBTi, which is not true — it was developed and issued solely by the Board of Trustees without consulting staff or the Technical Council," according to the letter, which Axios obtained.

Context: SBTi is a charity, and a subsidiary operates its climate target validation work. The group's partners include CDP, the U.N. Global Compact, the We Mean Business Coalition, World Resources Institute and the World Wildlife Fund.

  • Its funders include the Bezos Earth Fund and Bloomberg Philanthropies.

The intrigue: The board's announcement made clear that the group views them as "a way to accelerate the decarbonization of value chains" while companies work to slash emissions via other routes.

  • In July, the organization is set to issue "guardrails" and other details for what credits will be acceptable.
  • Mathilde Mignot of EcoAct, who specializes in setting standards for voluntary carbon markets, told Axios in an interview that the pressure on SBTi increases the likelihood that the group will issue stringent guidance for what will, and won't, be permissible for companies to count.
  • "We expect by July, that they will obviously under the pressure that they are receiving now, that they will put a lot on credibility on data," she said.

The other side: In the corporate world, opening Scope 3 to offsets is viewed optimistically, since many companies were finding it exceedingly difficult to tackle such emissions without using them.

  • Prior to the move, some firms were exploring leaving the SBTi altogether, and chart their own path.
  • "We've done a lot of research, and there's a lot of evidence that suggests that companies are way off, many companies — 60% I think — people are saying are off track to meeting their Scope 3 targets," said Mark Kenber, who leads the Voluntary Carbon Markets Integrity Initiative.
  • Kenber told Axios in an interview that the SBTi's ultimate guidance is "going to be pretty limited.
  • "It is saying 'OK, if a company's made its best efforts to meet its target and it's missing it by a small amount, then under certain circumstances, you could use carbon credits to bridge the gap,' and that's the way I would imagine SBTi is thinking about it and how it would frame it," he adds.

Our thought bubble: This situation involves the possibility of a board gone rogue, and deciding how to approach one of the most controversial topics in carbon management.

The bottom line: "The entire premise of being science-based lies in what must be done to meet our planetary climate goals," said John Willard, a sustainability expert at Quantis Consulting.

  • "Opening up Scope 3 to carbon offsets opens a very wide arena of implications that will have to be narrowed down to maintain a scientific basis."

Editor's note: This story has been updated to incorporate SBTi's April 12 clarification.

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