The SBTi released a statement in April confirming that it would produce updated guidance on ow 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 update is expected to relax guidelines on the use of offsets. At present, companies wishing to align with the SBTi’s Net-Zero Standard can only use offsets to address 10% of their absolute emissions across all scopes. Many firms have aired concerns that they will not be able to deliver such significant emissions cuts.
Little information was provided in the initial statement, with the SBTi promising full details in July. Heated debate immediately broke out once the statement was out, including a reported rift within the SBTi’s own staff. Fears were widespread that the initiative could undermine widely-accepted scientific evidence on the need for deep decarbonisation.
Some NGOs including WWF and Greenpeace have already told the SBTi not to relax offsetting guidelines.
Now, six others have waded into the debate, coming out in favour of the use of additional offsetting – provided certain criteria are met.
A letter sent by the NGOs to the SBTi last week states that businesses need to “deploy every valid tool at our disposal to accelerate climate progress”. It argues that “few other climate solutions” can offer the potential co-benefits to biodiversity and sustainable development, particularly in low-income nations, that can arise from the use of “high-quality nature-based credits”.
The letter is supported by one UK-based NGO, Fauna & Flora, plus five headquartered in the USA: WCS, The Nature Conservancy, Conservation International, the Environmental Defense Fund and the American Forest Foundation.
These NGOs would support the SBTi in enabling businesses to use carbon credits to a greater extent to meet their science-based targets, provided that:
- Only high-quality credits are used, as defined by the Integrity Council for the Voluntary Carbon Market
- Companies prioritise the direct abatement of operational and value chain emissions
- Credits used to ‘net’ Scope 3 emissions should result in climate benefits in the near-term
- Companies should reduce the use of credits over time as technology and capacity improvements are made
- Definitions of the appropriate use of offsets are drawn up “in close coordination” with the Voluntary Carbon Market Integrity Initiative (VCMI), taking note of its beta guidance on Scope 3 emissions accounting
Additionally, the letter emphasises that the SBTi should continue to urge businesses to finance environmental attribute certificate schemes, then not use the resulted certificates in accounting towards their own climate goals. This is known as beyond value chain mitigation.
Credibility fears
A recent edie survey of more than 180 sustainable business experts found that six in ten feel that carbon credit markets are “too risky” to invest in at the moment.
Similar research by the We Mean Business Coalition put the proportion closer to eight in ten for firms not already purchasing carbon offsets or planning to do so.
The most common concern is that offsetting projects would not deliver the carbon benefits promised, thus exposing business buyers of credits to reputational risk and the risk of missing their commitments. There is also the longer-term and more wide-reaching risk of a global failure to tackle the climate crisis.
The climate benefits of nature-based offsetting schemes were claimed to be widely overstated in an investigation led by The Guardian last year. Another similar expose was recently broadcast on the BBC’s Panorama.
Panorama additionally raised concerns about the ethical and human rights implications of poorly-governed projects. Journalists spoke with residents in Kenya forced to move from their homes for a large-scale forest project run by Wildlife Works. Workers on the project also accused bosses of failing to address sexual harassment.
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