Written by: Jonathan PHILLIP
Verified by: George KIONGSON
A. Introduction to the Revision
The Science Based Targets Initiative (SBTi) has initiated a critical revision of its Corporate Net-Zero Standard, a key framework that supports companies in aligning their climate commitments with scientific imperatives. This ongoing revision aims to refine and enhance the guidelines that drive companies toward achieving meaningful reductions in their carbon footprints, particularly focusing on Scope 3 emissions and the effectiveness of Environmental Attribute Certificates (EACs).
As the impacts of climate change intensify, the SBTi acknowledges the urgent need to update its Corporate Net-Zero Standard to ensure it remains a robust and effective tool. The Standard, which assists companies in setting scientifically aligned net-zero targets, must evolve to integrate the latest research and address new challenges and opportunities in corporate sustainability.
B. Focusing on Scope 3 Emission
A central aspect of the SBTi’s revision is an enhanced focus on Scope 3 emissions, which encompass all indirect emissions throughout a company’s value chain. These emissions often represent the largest portion of a company's carbon footprint, accounting for approximately 75% on average. The complexity and vast scale of Scope 3 emissions make them a critical focus for any meaningful climate strategy, yet they are also the most challenging to manage due to their spread across various indirect operational areas, including upstream and downstream activities.
One potential area of change discussed in the paper is the introduction of more granular and sector-specific guidance for setting Scope 3 targets. This could enable companies to tailor their strategies to the unique challenges within their industries, thereby improving the effectiveness of their emissions reduction efforts.
Source: WRI/WBCSD Corporate Value Chain (Scope 3) Accounting and Reporting Standard
C. Aim of the revision
The aim of the SBTi’s revision is multifaceted: to align the Net-Zero Standard with the latest climate science, to enhance its practical applicability across diverse industries, and to increase the accountability and effectiveness of corporate climate commitments. By refining the standard, the SBTi aims to ensure that it not only drives meaningful emissions reductions but also helps companies navigate the complexities of Scope 3 emissions more effectively. This involves providing clearer guidance and more tailored strategies that companies can implement to achieve genuine, impactful environmental outcomes.
D. Newly released technical outputs
To support these aims, the SBTi has released four key technical outputs that collectively address both the methodological foundations and the practical implications of the standard’s application:
Scope 3 Discussion Paper: This paper outlines potential changes to how Scope 3 emissions could be managed and accounted for, opening up a dialogue on refining target-setting practices.
Evidence Received on Effectiveness of EACs: This compilation includes feedback and data collected from various stakeholders about the role and impact of EACs, such as renewable energy certificates and carbon credits, in meeting corporate climate targets.
Synthesis Report on the Effectiveness of EACs – Part 1: Carbon Credits: The first of three reports that synthesizes evidence on how carbon credits are being used by companies to offset their emissions and the effectiveness of these credits in real climate action.
Findings of Independent Systematic Review of Carbon Credits: This document presents the results of an independent systematic review on the use of carbon credits and other EACs, assessing their effectiveness as tools for direct emission reductions.
E. What’s Next?
As the SBTi moves forward with this comprehensive review, the involvement of stakeholders from across the corporate spectrum will be crucial. The feedback and insights gained during the public consultation phase, scheduled for late 2024, will play a critical role in shaping the final version of the Standard. It’s essential that companies, environmental groups, and policymakers contribute actively to this discussion.
Looking forward, it's essential that the revised standard not only tightens the requirements around Scope 3 emissions but also critically evaluates the role and criteria for the use of EACs in net-zero strategies. The outcome of this revision should encourage companies to stay informed and engaged in this evolving process.
This shift is expected to catalyze more ambitious and sustainable climate actions across the corporate world, driving progress toward global climate goals with increased precision and accountability. For tailored support on your company’s decarbonization journey, don’t hesitate to contact Mt. Stonegate. We offer comprehensive, one-stop solution services and hold a prominent position in the Asian market, guiding businesses toward a better, sustainable future.
References:
Comments