The CEO of the main body for verifying CO emissions plans2 of businesses around the world “deeply regrets” the confusion that followed a recent update that was interpreted as permission to scale up the use of carbon credits.
The Science Based Targets initiative, which benefits from the support of the United Nations, remains committed to “robust governance and does not shy away from debate,” said Luiz Amaral, CEO of the group, in a statement published Friday on its website.
The comments follow a turbulent period in which the SBTi was criticized by environmental advocates – including within its own ranks – for saying businesses should have greater leeway in using the credits carbon, in order to offset their so-called scope 3 emissions, that is to say those which come from their value chain. For some sectors, these emissions represent up to 90% of total emissions.
What is a value chain?
The value chain refers to five interrelated activities that provide a company with the opportunity to increase its competitive advantage by adding value to its products and services. These five activities are inbound logistics (purchasing, transportation and warehousing), operations (product creation), external logistics (transportation), marketing and service.
Source: Business Development Bank of Canada
“I recognize and deeply regret the concern and distress this situation has caused and I would like to reassure my SBTi colleagues and stakeholders that the SBTi is committed to science-based decarbonization, public consultation and normative governance is unshakeable,” said Mr. Amaral. “The SBTi standards have not changed. »
That said, “we need to recognize that not all Scope 3 emissions are equal,” he added. “Some are more important, others less. Companies have significant control over some emissions, less over others. Some emissions are upstream, others downstream. »
Establishing a framework that recognizes these differences is essential to incentivize more companies to commit to emissions reductions.
BloombergNEF notes that a survey conducted by SBTi in February found that more than half of respondents believed that Scope 3 emissions – both in terms of measurement and reduction – were the main barrier to fixing net zero targets.
“I refuse to avoid a difficult discussion if it has the potential to improve our standards and have a greater impact,” Mr Amaral said.
More necessary than ever
According to Kyle Harrison, head of sustainability research at BloombergNEF, if carbon credits could be used freely to offset all Scope 3 emissions, the market for carbon credits – currently valued at between 2 and 2.5 billion US – would reach more than 1000 billion US per year by 2050.
The SBTi is expected to publish a draft document in July which will contain more details on the changes envisaged to “address the challenges that exist around Scope 3”, including the use of environmental attribute certificates to ensure “the right safeguards and the right limits,” said Mr. Amaral.
The CEO expressed confidence that the SBTi “will have a stronger standard that will have more impact” once this update and a review process has been completed.
“The need for rapid, large-scale decarbonization is greater than ever,” Amaral said. “The growing climate crisis makes it essential that all businesses, particularly those in high-emissions sectors, take urgent action to decarbonize both their own operations and their value chains. »