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Business News/ News / CEO of Climate Group Tries to Calm Critics After Backlash
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CEO of Climate Group Tries to Calm Critics After Backlash

The chief executive officer of the world’s main verifier of corporate emissions plans says he “deeply regrets” the confusion that followed a recent update that was widely interpreted as permission to ratchet up the use of carbon credits.

CEO of Climate Group Tries to Calm Critics After BacklashPremium
CEO of Climate Group Tries to Calm Critics After Backlash

(Bloomberg) -- The chief executive officer of the world’s main verifier of corporate emissions plans says he “deeply regrets" the confusion that followed a recent update that was widely interpreted as permission to ratchet up the use of carbon credits.

The Science Based Targets initiative, which is backed by the United Nations, remains committed to “robust governance and won’t shy away from debate," Luiz Amaral, the group’s CEO, said in a statement on its website on Friday.

The comments follow a turbulent period during which SBTi was criticized by climate experts — including from within SBTi’s own ranks — for stating that companies should have greater leeway to use carbon credits to offset their so-called Scope 3 emissions, or those stemming from their value chains. For some sectors, these represent as much as 90% of total emissions.

“I acknowledge and deeply regret the concern and distress this situation has caused and want to reassure my SBTi colleagues and stakeholders that the SBTi’s dedication to science-based decarbonization, public consultation and standard-setting governance is unwavering," Amaral said. “The SBTi standards haven’t changed."

That said, “we must recognize that not all Scope 3 emissions are created equal," he said. “Some are more material, some less so. Companies have significant control over some emissions, less over others. Some emissions are upstream, others are downstream."

Coming up with a framework that acknowledges these differences is key to getting more companies to sign up to emissions reductions. BloombergNEF notes that a survey conducted by SBTi in February found that more than half of the respondents felt that Scope 3 emissions — both in terms of measuring and reducing — were the biggest barrier to setting net zero targets. 

“I refuse to avoid a difficult discussion if it could potentially improve our standards to deliver a bigger impact," Amaral said.

If carbon credits could be freely used to offset all Scope 3 emissions, it would help boost the market for carbon credits — currently valued at somewhere between $2 billion and $2.5 billion — to more than $1 trillion a year by 2050, according to Kyle Harrison, head of sustainability research at BloombergNEF.

Read More: Shell Was Largest Buyer of Carbon Offsets in 2023 by Far: BNEF

SBTi is due to publish a draft paper in July that will contain more details on changes being explored to “tackle the challenges that exist around Scope 3," including the use of so-called environmental attribute certificates to ensure “the right guardrails and limits," Amaral said.

After Amaral put out his statement, SBTi’s board separately said it’s also committed to a process that includes “consultation with all relevant stakeholders."

Amaral said he’s confident SBTi will “have a more robust standard that will deliver greater impact" once that update and a revision process have been allowed to run their course.

“The need for rapid, large-scale decarbonization is greater than ever," Amaral said. “The growing climate crisis makes it critical that all businesses, especially those in high-emitting sectors, take urgent steps to decarbonize both their own operations and their value chains."

(Adds comment from SBTi’s board in 10th paragraph.)

More stories like this are available on bloomberg.com

©2024 Bloomberg L.P.

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Published: 20 Apr 2024, 01:10 AM IST
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