Credit: iStock
Letter to SBTi from group of NGOs, including Conservation International and the Environmental Defense Fund, backs controversial plans to reform net zero standard to unlock more investment in carbon credits
Several leading US environmental groups have waded into the ongoing row over the use of carbon offsets to tackle supply chain emissions, after publishing an open letter to the Science Based Targets initiative (SBTi) which backs proposals that would give corporates more scope to invest in carbon credits.
Conservation International, the Environmental Defense Fund, and The Nature Conservancy are among five leading green NGOs to have voiced their support for proposals to reform the SBTi's net zero standard to allow "limited and near-term use of high quality carbon credits" to offset corporate value chain emissions.
The group - which also includes The American Forest Foundation and the Wildlife Conservation Society (WCS) - wrote to the SBTi this week to "express our joint support" for the proposed rule changes, which they argue would help boost investment in climate and environmental action.
The letter emphasises that "the private sector will be key to reach our global climate goals" and that "SBTi's role has been pivotal" in establishing a widely-recognised, independently validated process for businesses to set net zero targets. It adds that carbon credits should be allowed to play a greater role in delivering on those targets.
"We need every effective lever available when it comes to tackling climate change and we firmly believe that, under a science- and evidence-based approach and when clear guardrails are in place, nature-based carbon credits can provide an opportunity to maximise climate impact while unlocking benefits for people and nature," the letter states.
"The science is clear that natural climate solutions represent at least one third of the solution to climate change mitigation, and carbon markets are the best proven mechanism available to date to scale financial investment."
The letter stresses that clear, robust standards must be put in place governing the use of credible carbon offsets to guard against 'greenwashing' or unintended negative consequences for the environment, the climate, or communities impacted by carbon offset projects.
But it argues that "establishing the guardrails to ensure that carbon credits and other environmental attribution certificates speed, rather than hinder, climate progress at a global scale is a solvable problem and is the essence of what it means to be science-based".
Initially sent to the SBTi on Tuesday, but only publicly released by the green groups yesterday, the letter suggests a number of principles that any revision to the current corporate net zero standard rulebook should follow, and offers to "extend our assistance to SBTi in developing guardrails to ensure these tools deliver much-needed additional climate action".
The groups stress that "only high quality" carbon credits should be permitted for supporting SBTi-validated net zero goals, and that each individual credit must "truly" represent one tonne of reduce or removed emissions.
It also states that firms looking to use carbon credits to offset their value chain emissions should "rigorously" adhere to principles ensuring they prioritise direct reduction of internal and supply chain emissions, "only using credits for emissions that are not readily abatable".
Carbon credits used by firms should also finance efforts that drive climate and environmental progress "now, not in 2050", and a company's use of carbon credits should reduce over time, according to the letter.
In addition, companies should be "strongly encouraged" to use a beyond value chain mitigation (BVCM) approach whereby firms can address any emissions that remain each year after they have met their annual progress towards net zero targets, it adds.
Moreover, it emphasises that the appropriate use of carbon credits should be defined in close coordination with the Voluntary Carbon Markets Integrity Initiative (VCMI), and align with the Integrity Council for the Voluntary Carbon Market's Core Carbon Principles.
"When created with integrity, carbon credits can deliver real, science-based emissions reductions and removals," the letter states. "And when used correctly, as part of corporate strategies that also prioritise value chain mitigation, carbon credits result in more, faster decarbonization at a global scale.
"In addition, high-quality, nature-based credits in particular support an essential climate solution while promoting global biodiversity and sustainable development goals, particularly in the Global South, that few other climate solutions can offer."
The move sees the NGOs take a different stance to a number of other green campaign groups, and some of SBTi's own staff, who have expressed serious reservations about the plan to allow carbon credits to play a bigger role in meeting corporate net zero targets. Critics remain unconvinced that strengthened standards across the carbon credit sector have adequately addressed concerns that some offset projects have consistently failed to deliver promised emissions savings.
The letter comes as the SBTI prepares to next month publish its proposed revisions to its Corporate Net Zero Standard, which sets out what companies need to do to achieve SBTi validation for their 1.5C-aligned climate targets.
Responding to the letter from green NGOs this week, the SBTi said in a statement that it welcomed feedback from all stakeholders, but emphasised the Corporate Net Zero Standard "has not been changed, and it cannot and will not change" until the revision process is completed.
"We are currently in the research phase of this revision," SBTi's statement added. "The research findings will feed into the drafting of the revised Standard. After drafting, there will be a public call for consultation.
"We encourage all companies, stakeholders, duty bearers and interested parties to feed into this consultation process. All feedback received will be considered as part of the consultation inputs into the Standard draft."
The planned update is taking place as part of SBTi's regular review cycle, which requires the standard to be revised every two to five years.
The organisation sparked a fierce internal row in April, after its board publicly announced its intention to relax rules to allow firms to use more carbon offsets to tackle their supply chain - or Scope 3 - emissions.
The move prompted a major backlash from several environmental groups, and led to an internal staff revolt at the organisation as employees accused the board of running roughshod over the official process for updating the influential standards.
Opponents of the proposed changes have warned they risk undermining the integrity of the SBTi approved targets by allowing firms to increase their reliance on carbon offsets that critics accuse of routinely failing to deliver promised emissions savings and distracting from efforts to cut emissions at source.
A number of environmental groups remain deeply sceptical the voluntary carbon credit market can deliver high integrity credits at scale, following numerous scandals involving projects that failed to deliver promised emissions savings.
Some businesses are also opposed to SBTi allowing companies' wider use of offsets to tackle their supply chain emissions. Last month, global fashion retailer H&M's head of sustainability Leyla Ertur wrote to the SBTi to warn that such a move would weaken corporate climate pledges "and make real decarbonisation efforts within value chains less attractive".
However, a number of major business groups and governments have signalled their support for the proposed reforms, arguing they provide a mechanism for boosting funding for carbon removal and nature projects that are likely to be critical to meeting long term climate goals.
You can now sign up to attend the fifth annual Net Zero Festival, which will be hosted by BusinessGreen on October 22-23 at the Business Design Centre in London.
