SBTi’s carbon credit conundrum

The move of the Science-Based Targets initiative to allow companies to use carbon credits to offset scope 3 supply chain emissions has proved controversial, to say the least. Existing rules for companies to align with the SBTi’s net-zero standard allow for only up to 10% of emissions to be offset by carbon credits. It appears that the decision came as a surprise to many of the organisation’s staff with a number of them calling for SBTi CEO Luiz Amaral and members of the board to resign. Amaral subsequently released a blog post defending the announcement and talking about improving internal procedures. It seems that final proposals are now set to be released later in 2024.  

The ultimate fear is, of course, that companies will see a green light for using credits to offset emissions while not making efforts to make actual cuts. When releasing details of the new plans, SBTi commented that there was ongoing healthy debate about carbon credits and that when properly supported by policies, standards and procedures based on scientific evidence, the use of carbon credits could be an additional tool to tackle climate change. Thus the organisation had decided to extend their use. 

A group of SBTi staff and advisers said that the decision was not based on science and accused the initiative of becoming a platform for greenwashing, with potential for conflicts of interest and undue influence by lobbyists. However, fans of using carbon credits were more welcoming of the move, pointing out that such investments in projects preventing deforestation, for example, are at present among the best methods of getting much-needed funding to indigenous people for economic development that preserves forests. The International Emissions Trading Association said that the revised scope 3 rules would offer a practical route for corporates to engage in climate action. 

UK retailer Waitrose has signed up to partner with Tony's Chocolonely’s Open Chain initiative, which is designed to end exploitation in the cocoa sector. A total of nine different Waitrose chocolate bars will be made from cocoa sourced through the Open Chain model. The retailer has joined the programme as what is termed a “mission ally”, the first UK retailer to do so. This means Waitrose commits to five sourcing principles including robust traceability, paying living income wages and developing long term partnerships with cooperatives to support farmers and their communities. 

Other companies committed to Open Chain include Ben & Jerry’s and Netherlands retailer Albert Heijn, and as it’s a collaborative initiative, mission allies agree to compete on chocolate but collaborate on cocoa. Open Chain cocoa is all Fairtrade certified but Waitrose pays an additional premium on top of the Fairtrade price so that Living Income Reference prices are paid to growers.     

Cotton certified by Better Cotton and supplied to brands has been linked by NGO Earthwatch with degraded land in Brazil’s Cerrado biome. Earthwatch researchers have traced shipments between two cotton producers linked to land grabbing and illegal land use change in the Cerrado and manufacturers in Bangladesh and Indonesia supplying the international brands. Earthwatch says that cotton in these supply chains is certified by the Better Cotton initiative, which strictly forbids land grabbing and clearance. 

Better Cotton describes the allegations as highly concerning and re-stated that any farms that do not comply with the requirements of the Better Cotton standard will have licences revoked, and has commissioned an independent audit of the farms in question. The certifier states that it prioritises enhancing due diligence regarding land conversion, deforestation and local community impact, and that consumers and the brands that supply them must have confidence that the cotton in their clothing is produced responsibly.    

The rise and rise of renewable power continues – the global wind power sector increased capacity by 117 GW in 2023, 50% faster than in 2022, according to the Global Wind Energy Council’s Global Wind Report 2024. Thanks to the 117 GW of new wind power installations, global cumulative wind power capacity passed the 1 TW milestone in 2023, showing year on year total growth of 13%. However, to meet 2023’s COP28 goal of tripling renewable power by 2030 global wind growth needs to rapidly accelerate, with annual wind installations roughly tripling to at least 320 GW over the course of the decade, the Global Wind Energy Council says. 

New research suggests that small and medium sized companies want to do more on climate impacts but are unable to do so because of a perceived lack of support from government and insufficient funding. Nearly 300 SMEs – businesses with fewer than 500 employees – across 44 countries were surveyed by SME Climate Hub and the results show a gap between ambition and action on emissions. Action on climate is a greater priority for 44% of companies. Nearly two-thirds said that reducing climate footprint enhances business reputation and just over half that it is a method of differentiating themselves from competitors. A similar number identified cost savings and return on investment as a motivating factor for action on climate. 

Of the companies in the survey, 52% said that both lack of policies or government-sponsored benefits and lack of funding were the top barriers to taking climate action. Other barriers included lack of data and the required skills and knowledge. The SMEs were asked to rate their knowledge on some specific climate action points. Among those rated high were reducing emissions in office buildings and equipment and lowering transport-related emissions. Establishing strategy and tracking reductions was ranked as moderate, with supplier engagement on scope 3 emissions ranked as poor in terms of knowledge.  

The European court of human rights, that sits in the French city of Strasbourg, has ruled that the Swiss government had violated the rights of a group of 2,400 older Swiss women by not taking sufficient action to counter climate change. In so doing, the court has put judicial pressure on the 46 governments in the Council of Europe to take firmer action on greenhouse gas emissions. 

The detail of the ruling is that the human right of the women to family life have been impacted by the inaction of the Swiss government. Older women are more likely to die in heatwaves, which are becoming more frequent as the planet warms and the court found that the Swiss government was not doing enough at speed to meet international obligations under the Paris climate agreement. Two other similar cases raised by a group in Portugal and the former mayor of a French town were ruled inadmissible. Climate activists and some lawyers welcomed the ECHR’s verdict. Some European governments were unhappy with the ruling, arguing that it was the place of national institutions to protect their citizens.