At Seismic, we aim to cut through the noise to provide our clients and community with understanding of the ever-evolving sustainability landscape.
In the last couple of weeks, there has been developments at the Science Based Target Initiative (SBTi). The SBTi is a non-profit organisation formed a few years ago initially as a collaborative initiative between CDP, the United Nations Global Compact, the We Mean Business Coalition, the World Resources Institute (WRI), and the World Wide Fund for Nature (WWF).
In order to achieve SBTi status, companies need to measure their Greenhouse Gas (GHG) emissions, have a plan to manage and reduce their emissions on a trajectory aligned with climate science, set a quantitative reduction target and report progress against their goal annually.
While not perfect and without critics, the SBTi has been considered by many to be the gold standard for climate target-setting, reporting and implementation. This reputation has led to a rapidly increasing uptake of companies setting targets.
Recently, the SBTi issued a statement which alluded to a change in their approach to an often contentious topic in the world of sustainability – carbon credits. The SBTi’s view to date has been that companies should focus all of their resources towards organisational reduction instead of offsetting. This statement represents a potential significant shift in their stance. The SBTi issued an update to the statement to provide clarity. While the statement pointed towards a potential change in the future (July 2024 timeframe indicated), at present there have been no changes made to the current SBTi standards or process.
The statement was met with much debate online. Those active in the carbon credits markets largely welcomed it. Others, including staff at SBTi, contested it.
The latest statement made from the SBTi Board regrets the misinterpretation of the update, whilst Luiz Amaral, SBTi CEO stated, “I refuse to avoid a difficult discussion if it could potentially improve our standards to deliver a bigger impact. This deliberation is underway and advancing. The SBTi is operating at the very edge of knowledge, and that is why a periodic review of our corporate Net-Zero Standard must follow the approved procedure and be led by evidence.”
Navigating the changes in your business
We regularly help our clients measure their GHG emissions, come up with credible reduction plans that align with business growth plans and climate science, and help our clients achieve SBTi status. As a result, we have been watching this development closely and will continue to do so.
Our advice to our community is generally to focus on 4 core activities:
- Make sure to measure your Scope 1 to 3 emissions
- Develop a credible plan to reduce emissions in-line with climate science supported by an action plan
- Set a credible emission reduction target
- Measure and report your Scope 1 to 3 emissions annually to provide transparency on progress or challenges
Sometimes we know that a business may have a particular stakeholder, like a customer or investor, who wants to also see the company investing in carbon credits. Our advice is, typically, this is okay to do if:
- You are doing all of the steps above
- You are making sure you are investing your company’s resources in credible projects and solutions
Failing to do any of the above puts your company at risk of being perceived by your stakeholders or the market as participating in greenwashing. We were pleased to see the statement by WWF, one of the founding partners of SBTi, which largely aligns with our view and the advice we give our clients.
We will keep monitoring these developments and aiming to keep our community informed as more information becomes available.
Your Carbon & Net Zero Partner
If you have set or are considering setting a Science Based Target and have questions or concerns about these recent development, don’t hesitate to reach out to our carbon team, who would be happy to discuss what these changes might mean for your business.
