{"id":50575,"date":"2024-04-11T17:42:05","date_gmt":"2024-04-11T16:42:05","guid":{"rendered":"https:\/\/www.climatechangenews.com\/?p=50575"},"modified":"2024-04-15T14:34:57","modified_gmt":"2024-04-15T13:34:57","slug":"sbti-needs-tighter-rules-on-companies-indirect-emissions","status":"publish","type":"post","link":"https:\/\/www.climatechangenews.com\/2024\/04\/11\/sbti-needs-tighter-rules-on-companies-indirect-emissions\/","title":{"rendered":"SBTi needs tighter rules on companies&#8217; indirect emissions"},"content":{"rendered":"<p><em>Silke Mooldijk works at the NewClimate Institute and is part of the core team behind the Corporate Climate Responsibility Monitor.<\/em><\/p>\n<p><strong>A decade ago, the Science Based Targets initiative (SBTi) was launched with the goal of mobilising the private sector for climate action. <\/strong><\/p>\n<p>Today, it stands as the largest and most influential validator of corporate climate targets, having confirmed the 2030 goals of around 5,000 companies.<\/p>\n<p><span data-contrast=\"none\">Yet new analysis reveals a leniency within the initiative. According to the <\/span><a href=\"https:\/\/newclimate.org\/resources\/publications\/corporate-climate-responsibility-monitor-2024\"><span data-contrast=\"none\">2024 Corporate Climate Responsibility Monitor (CCRM)<\/span><\/a><span data-contrast=\"none\">, the emissions reduction commitments of 51 major global corporates are falling short of what&#8217;s needed at the global level. <\/span><\/p>\n<p><span data-contrast=\"none\">Surprisingly, most of these companies received SBTi validation for their targets to be aligned with the 1.5\u00baC warming limit backed by governments in the Paris climate agreement.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:0,&quot;335559731&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:288}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">What explains this discrepancy?\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:0,&quot;335559731&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:288}\">\u00a0<\/span><\/p>\n<blockquote><p><a href=\"https:\/\/www.climatechangenews.com\/2024\/04\/10\/un-climate-chief-calls-for-quantum-leap-in-climate-finance\/\" target=\"_blank\" rel=\"noopener\"><strong>UN climate chief<\/strong> calls for \u201cquantum leap in climate finance\u201d<\/a><\/p><\/blockquote>\n<p><span data-contrast=\"none\">Currently, the SBTi\u2019s 2030 target validations often overlook substantial shares of companies\u2019 full value chain emissions by excluding upstream and downstream value chain emissions, known as \u201cscope 3\u201d. Scope 3 emissions account for the majority of corporate greenhouse gas footprints, sometimes exceeding 95%.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:0,&quot;335559731&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:288}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">The SBTi requires companies to set a near-term target for scope 3 emissions, but only when those emissions account for more than 40% of their greenhouse gas footprint. However, these targets do not have to cover all scope 3 emissions and only need to be aligned with global warming of 2\u00baC or well below 2\u00baC, not 1.5\u00baC.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:0,&quot;335559731&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:288}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">While the SBTi checks whether companies have set a scope 3 target, the initiative does not provide a temperature classification for these scope 3 targets &#8211; only for companies\u2019 scope 1 and 2 targets, which apply to direct operations and their energy use.<\/span><\/p>\n<blockquote><p><a href=\"https:\/\/www.climatechangenews.com\/2024\/04\/10\/spring-meetings-can-jump-start-financial-reform-for-food-and-climate\/\" target=\"_blank\" rel=\"noopener\"><strong>Spring Meetings<\/strong> can jump-start financial reform for food and climate<\/a><\/p><\/blockquote>\n<p><span data-contrast=\"none\"> This important nuance is often missed by the public, as many companies nonetheless prominently advertise their scope 3 climate targets as science-based.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:0,&quot;335559731&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:288}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">Take Fast Retailing, owner of clothing chain Uniqlo, for example. The company pledges to reduce its operational emissions (scope 1 and 2) by 90% by 2030, which represent just 5% of its total emissions.<\/span><\/p>\n<p><span data-contrast=\"none\">It also commits to reduce its emissions from procured goods and materials (scope 3) by 20% by the end of this decade. However, upstream emissions in the fashion sector need to be reduced by around 40% to be aligned with global warming of 1.5\u00baC. <\/span><\/p>\n<p><span data-contrast=\"none\">Whereas the SBTi validated the target for operational emissions as \u201c1.5\u00baC temperature aligned\u201d, the initiative did not provide a temperature classification for the scope 3 target.<\/span><\/p>\n<blockquote><p><a href=\"https:\/\/www.climatechangenews.com\/2024\/04\/09\/european-court-rules-climate-inaction-by-states-breaches-human-rights\/\" target=\"_blank\" rel=\"noopener\"><strong>European court rules<\/strong> climate inaction by states breaches human rights<\/a><\/p><\/blockquote>\n<p><span data-contrast=\"none\">Yet Fast Retailing also <\/span><a href=\"https:\/\/www.fastretailing.com\/eng\/sustainability\/news\/2109171300.html\"><span data-contrast=\"none\">describes this target as \u201cscience-based\u201d<\/span><\/a><span data-contrast=\"none\">. This pattern is not unique to Fast Retailing but common across companies validated by the SBTi.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:0,&quot;335559731&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:288}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">As a voluntary organisation primarily funded by third parties, the SBTi relies on the voluntary participation of companies. Its methodologies need to accommodate the perspectives of various stakeholders.<\/span><\/p>\n<p><span data-contrast=\"none\"> This may explain why the SBTi\u2019s methodologies for 2030 targets are not necessarily always aligned with the scientific consensus on limiting global warming to 1.5\u00baC. <\/span><\/p>\n<p><span data-contrast=\"none\">However, addressing the lack of stringency in scope 3 targets is key to ensuring that the SBTi can effectively drive corporate climate ambition.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:0,&quot;335559731&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:288}\">\u00a0<\/span><\/p>\n<h3><b><span data-contrast=\"none\">Offsetting controversy<\/span><\/b><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:0,&quot;335559731&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:288}\">\u00a0<\/span><\/h3>\n<p><span data-contrast=\"none\">Despite the large degree of leniency that already exists in scope 3 standards today, there is a significant risk that the rules will be loosened even further. <\/span><\/p>\n<p><span data-contrast=\"none\">Just this week, the SBTi Board of Trustees <a href=\"https:\/\/sciencebasedtargets.org\/news\/statement-from-the-sbti-board-of-trustees-on-use-of-environmental-attribute-certificates-including-but-not-limited-to-voluntary-carbon-markets-for-abatement-purposes-limited-to-scope-3\" target=\"_blank\" rel=\"noopener\">issued<\/a> a unilateral and possibly illegitimate decision to <\/span><span data-contrast=\"none\">revise scope 3 standards to allow for carbon offsetting. <\/span><\/p>\n<p><span data-contrast=\"none\">This decision is not based on scientific insights but comes after a lot of pressure on the SBTi from supporters of carbon markets. SBTi staff have already <\/span><a href=\"https:\/\/www.dropbox.com\/scl\/fi\/gvjkqr4k4cdtt57qit9s6\/SBTi-Staff-Response-to-the-Board-of-Trustees-April-9-Statement.pdf?rlkey=o38yubknqezjqzim44wjtk5fb&amp;dl=0\" target=\"_blank\" rel=\"noopener\"><span data-contrast=\"none\">reacted strongly<\/span><\/a><span data-contrast=\"none\">\u00a0to voice their discontent with the decision and the process.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:0,&quot;335559731&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:288}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">Introducing offsetting in the SBTi scope 3 standards could effectively nullify already insufficient targets, <\/span><span data-contrast=\"none\">reversing years of incremental progress that SBTi and its member companies have fought so hard to achieve.\u202f<\/span><\/p>\n<blockquote><p><a href=\"https:\/\/www.climatechangenews.com\/2024\/04\/08\/forest-carbon-accounting-allows-guyana-to-stay-net-zero-while-pumping-oil\/\" target=\"_blank\" rel=\"noopener\"><strong>Forest carbon accounting<\/strong> allows Guyana to stay net zero while pumping oil<\/a><\/p><\/blockquote>\n<p><span data-contrast=\"none\">Allowing companies to offset their emissions<\/span><span data-contrast=\"none\"> could also deprive their suppliers &#8211; who are often located in the Global South &#8211; of much needed financial and technical support for their own emissions reduction efforts.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:0,&quot;335559731&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:288}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">Climate target-setting has become standard practice in the corporate world &#8211; progress the SBTi helped foster over the past decade. <\/span><span data-contrast=\"none\">But the recent decision by the SBTi Board of Trustees on offsetting could bring any further advances to a halt. <\/span><\/p>\n<p><span data-contrast=\"none\">Reversing this decision and tightening the rules for scope 3 targets would be the next step to propel corporate climate ambition forward.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559685&quot;:0,&quot;335559731&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:288}\">\u00a0<\/span><\/p>\n<p><em>This article argues that the SBTI&#8217;s rules are too lax. We have also published <a href=\"https:\/\/www.climatechangenews.com\/2024\/04\/12\/science-based-targets-emissions-rules-dont-reflect-business-reality\/\" target=\"_blank\" rel=\"noopener\">a comment piece<\/a> arguing they are too stringent.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"Businesses are not required to cut all their value chain emissions in line with a 1.5C warming limit &#8211; and allowing offsetting could weaken efforts further","protected":false},"author":72,"featured_media":45812,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[607,2443,3861,3859],"tags":[4,107,4863,4673],"coauthors":[4724],"class_list":["post-50575","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-carbon-markets","category-comments","category-comment","category-world","tag-business","tag-carbon-emissions","tag-net-zero","tag-science-based-targets-initiative","type-comment"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>SBTi needs tighter rules on companies&#039; 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