Stockholm (NordSIP) – The Science Based Targets initiative (SBTi) has been widely considered a bedrock for credible corporate climate action since its establishment in 2015. However, the organisation’s role in verifying companies’ alignment with the goals of the Paris climate agreement was called into question last week as it faced a staff rebellion over proposed changes to its methodology.
The SBTi had been reportedly considering endorsing the use of environmental or energy attribute certificates (EACs) including carbon credits for the abatement of Scope 3 emissions. In a statement dated 9 April 2024, the SBTi Board of Trustees had declared: “While recognising that there is an ongoing healthy debate on the subject matter, SBTi recognises that, when properly supported by policies, standards and procedures based on scientific evidence, the use of environmental attribute certificates for abatement purposes on Scope 3 emissions could function as an additional tool to tackle climate change.”
SBTi staff, particularly those working within the organisation’s Scientific Advisory Group (SAG) and Technical Advisory Group (TAG) were apparently taken by surprise by the Trustee Board’s statement and complained that not only were they not consulted, but that this was also a breach of SBTi governance guidelines. In a jointly signed letter to the Board of Trustees, 46 staff members called on the 9 April statement to be withdrawn, as well as the resignation of CEO Luiz Fernando do Amaral and those board members that had supported the move.
The voluntary carbon markets have been beset by controversy over the past year, with providers and standard setters being accused of lax methodology, double counting and other poor practices effectively supporting the greenwashing of corporate emissions. The staff letter states: “We have not been presented with any specific analysis of the evidence received by SBTi following its call for evidence on the effectiveness of environmental attribute certificates, launched last year. The decision to allow the use of such environmental attribute certificates as a legitimate way to deliver ‘abatement’ of scope 3 emissions as part of the SBTi framework is premature and not supported by any TAG or SAG recommendation.”
While it remains to be seen whether permanent damage has been done to the relations between the SBTi staff and the board of trustees, the latter did issue a clarification to the original statement on 12 April, which read: “No change has been made to SBTi current standards. Any use of EACs for Scope 3 will be informed by evidence. Any change to SBTi standards, including use of EACs for Scope 3, will be conducted according to previously approved SBTi Standard Operating Procedure for developing standards.”
Although the full incorporation of EACs no longer seems imminent, the unusually public dispute within the SBTi may have undermined confidence in what is meant to be a United Nations-approved global standard setter. Nevertheless, some observers have sought to underplay the incident. Speaking to the Guardian newspaper, Potsdam Institute for Climate Impact Research Director Johan Rockström said he understood how offsets might be used as an incentive for companies to begin accounting for their Scope 3 emissions, providing rigorous standards were used and genuine decarbonisation remained the priority. According to sustainable finance journalist Sophie Robinson-Tillett, the internal storm at the SBTi may be symptomatic of a broader issue with the myriad non-profit initiatives that govern the sustainable investment industry. Should the funding structures and accountability obligations of these non-governmental organisations (NGOs) be revisited as they potentially outgrow their initial remits?
