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Science-Based Targets initiative lays out options for

credits

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Cautious stance backs critics concerned about abuse

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Proposes ideas to help companies manage Scope 3 emissions

By Simon Jessop

LONDON, July 30 (Reuters) - The Science-Based Targets

initiative (SBTi) said in a research paper on Tuesday there was

not enough scientific support for the influential corporate

climate watchdog to lift restrictions on companies using carbon

credits to offset their emissions.

The paper's findings are in line with a preliminary draft

Reuters reported on in May and make it more likely that the SBTi

will continue to resist pressure from carbon offset advocates to

allow their broad use in the accounting of climate targets.

The board of the group, which audits the emission reduction

plans of companies, prompted a revolt among its staff in April

by declaring its intention to allow broader use of carbon

credits prior to concluding its research on them.

SBTi's trustees subsequently issued a clarification saying

it had not yet changed its policy and that any decisions would

be "informed by the evidence". SBTi CEO Luiz Amaral announced

earlier this month that he would step down, citing personal

reasons.

Selling credits from projects such as wind farms and

reforestation schemes to a company so it can offset its carbon

emissions is seen as a way to help move money to

climate-friendly projects. Critics argue that they will result

in companies doing less to reduce their own emissions, and worry

about the quality of many offsets on the market.

The SBTi's current policy allows the use of carbon offsets

for a small portion of emissions only once companies have done

everything they can to stop polluting. Additional ways companies

could be helped was by broadening the use of environmental

attribute certificates, although these would not be classed as

offsetting.

Examples the paper mentioned include where a company has

helped a supplier reduce its emissions, or where it has reduced

emissions by purchasing bulk commodities from a more

climate-friendly supplier.

CONCERN OVER QUALITY OF OFFSETS

At stake is the growth of the still nascent market for

voluntary carbon offsets. While they are used by some of the

world's biggest companies, including Microsoft ( MSFT ),

Salesforce ( CRM ) and Amazon ( AMZN ), the size of the market

is small at around $2 billion, in part because of concerns about

the quality of many offsets.

SBTi chief technical officer Alberto Carrillo Pineda called

the research report a critical step in helping the group develop

"a more sophisticated approach to Scope 3 to help more

businesses set targets". Scope 3 are emissions generated from a

company's supply chain or its customers.

Pineda added that cutting emissions directly "must remain

the priority for corporate climate action".

Thomas Day, an analyst of corporate climate action at

non-profit climate research group NewClimate Institute, welcomed

the report.

"We have often criticised the SBTi for drifting too far from

its science-based mantra. But the papers published today stick

to the science in ruling out offsets and exploring improvements

to the standard, putting the SBTi back on track to remain

relevant for company transformation," Day said.

The SBTi said some of the ideas in the research report would

require more work and discussion before being put before the

group's technical advisors and eventually its board.

A draft Corporate Net-Zero Standard with updated criteria

will be released for public consultation towards the end of the

fourth quarter of 2024, the SBTi said. The updated policies are

expected to be in place by the end of 2025.