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The Science Based Targets initiative (SBTi) has seen exponential growth since its launch in 2015. To date, more than 3,800 companies have joined it, including many of the largest in the world. Its aim was and is still clear: Provide a framework for companies to decarbonize in line with the Intergovernmental Panel on Climate Change’s (IPCC) pathway for limiting temperature increase to 1.5 degrees Celsius. As it has grown, it has faced the challenge of keeping the methodology simple enough for companies to implement, while providing flexibility and guidance across a range of sectors and business activities.
Seven years on, is it still delivering on its promise? It is evident that it has gained the scale it set out to achieve, with prominent companies such as Walmart, Apple, CVS Health and Volkswagen all using the SBTi’s framework. Having an approved target has come to be seen as synonymous with climate leadership.
But setting targets only goes so far. We are getting closer to 2030 — the year by which the IPCC has stated global emissions must be halved — and climate action is becoming ever more urgent. While considerable progress has been made already, there is much more to do. As an ever-growing number of companies sign up, there are clear improvements that could be made to the SBTi’s framework to embrace complementary climate solutions that help to accelerate action at the pace we need to meet 1.5C.
The Voluntary Carbon Market (VCM) is essential for global decarbonization. It is where any individual, company or organization seeking to, and otherwise not obliged to, can offset their emissions by purchasing credits. Alongside mitigation and reduction, purchasing credits should form a key part of a company’s net zero strategy. Carbon offsetting does not take the place of reduction within a company’s own value chain.
There are clear improvements that could be made to the SBTi’s framework to embrace complementary climate solutions that help to accelerate action at the pace we need to meet 1.5C.
However, the SBTi does not currently allow for carbon credits to be used as a core part of a company’s net zero strategy. This is a major obstacle to climate action. It simultaneously holds companies back from accelerating their decarbonization agendas, and holds the carbon markets back from scaling effectively.
While it is essential that the VCM does its own work in building integrity and demonstrating that carbon credits are a credible mechanism for decarbonization, the SBTi has an equally important role to play in helping to drive demand and buyer confidence in the carbon market. In order to unlock the potential of this market and accelerate the transition to net zero, the SBTi could consider three improvements to its current framework:
We are already seeing some of the consequences of following the existing framework to the letter. Just a few weeks ago, EasyJet announced that in order to comply with the SBTi’s target criteria, it plans to stop its investment in voluntary carbon credits and focus instead on investing in future decarbonization technologies.
Investment in decarbonizing aviation is essential. However, the pathways do not need to be either/or. Focusing entirely on decarbonization solutions overlooks the impact that the VCM can also have on global decarbonization. Carbon credits are complementary to a decarbonization pathway, as both activities have their place in reaching net zero.
It is clear that companies around the world are looking to the SBTi to help them decarbonize and lead on climate. As we get closer to 2030, having an effective methodology that incorporates multiple climate solutions is essential. The SBTi has the potential to create significant change, but it needs to evolve. Embracing high-quality carbon credits as part of an updated framework is at the core of this evolution — and one that can create lasting impact.