By Simon Jessop
LONDON (Reuters) – A leading judge of corporate climate action plans said it will allow companies to use carbon credits to offset their supply chain pollution despite concerns it could see emissions rise.
Late Tuesday, the non-profit Science-based Targets initiative (SBTi), seen as the gold standard arbiter of company plans, said it would allow the so-called Scope 3 emissions to be offset subject to as yet undefined “guardrails and thresholds”.
SBTi had previously not allowed offsets in case it dissuaded boards from actually cutting emissions, but many have struggled to align their plans with the world’s climate goal amid weak government action, still nascent technical fixes and high costs.
By allowing companies to use offsets, it is hoped they will be able to secure market and investor support for more ambitious action, helping reduce their cost of capital and driving more money into climate-friendly projects.
Over time, as the policy and technical hurdles dissipate, the hope is the offsets are not needed, or can at least be reduced.
“Considering the scope and the complexity of this topic, the SBTi will consult and strive to reach the necessary cooperation agreements with other relevant initiatives as well as a broader set of stakeholders on the revision of the scope 3 framework, including the responsible use of environmental attribute certificates in target setting,” a statement from the SBTi board of trustees said.
The decision is in line with a move by the Voluntary Carbon Markets Initiative to expand the use of high-quality carbon credits, yet a source with direct knowledge of the matter said the decision could result in zero emissions reductions by 2035.
(Editing by Mark Potter)
