Why is it in the News?

A contentious recent decision by the Science Based Targets Initiative (SBTi), permitting carbon offsetting for Scope 3 emissions of businesses with SBTi-based climate targets, has stirred controversy and skepticism.

About Science Based Targets Initiative (SBTi):

• The Science-based Targets Initiative (SBTi) is a global movement launched post the 2015 Paris Climate Agreement to mobilize companies in combating climate change.
• SBTi supports businesses in their decarbonization projects, ensuring compatibility with limiting global temperature rise to 1.5C° and achieving carbon neutrality by 2050.
• Backed by a scientific method, SBTi verifies company objectives are aligned with COP21 goals.
• SBTi was initiated by four international organizations:
  • United Nations Global Compact (UNGC)
  • World Wildlife Fund (WWF)
  • Carbon Disclosure Project (CDP)
  • World Resource Institute (WRI)
• The primary objective of SBTi is to guide businesses in setting greenhouse gas (GHG) emission reduction targets that align with the Paris Agreement, are scientifically valid, and contribute significantly to reducing global emissions.

To determine a 1.5C° trajectory compatibility, SBTi uses science-based targets that account for the following factors:

• • A carbon budget focused on achieving the 1.5C° global warming limit.
  • GHG emission scenarios from the IPCC or the IEA.
  • Emission allocation method: emission intensity reduction, absolute emission reduction, or emission intensity convergence toward a sector-specific reference level
• Through this methodology, companies can establish clear and science-based GHG reduction targets, effectively contributing to global emission reduction efforts.

SBTi's Net Zero objective:

• In October 2021, SBTi introduced its "Net Zero" benchmark, challenging committed companies to achieve long-term reduction targets up to carbon neutrality.

The Net Zero goal builds upon the initial SBT approach and focuses on four essential components:

• • Short-term targets: To align with the 1.5°C objective, companies must set targets for reducing their total emissions (Scopes 1, 2, and 3) within a maximum of 5 to 10 years.
  • Long-term objectives: Alongside short-term targets, Net Zero requires companies to define long-term goals compatible with limiting global warming to 1.5°C and achieve them by 2050 (or 2040 for the energy sector).
  • Carbon finance for short-term contributions: Companies are encouraged to invest in external carbon sequestration or avoidance projects by purchasing carbon credits, complementing their GHG reduction efforts. SBTi prioritizes sequestered emissions over avoided emissions, considering the latter's carbon credits less reliable.
  • Neutralization: As the final stage in reaching carbon neutrality, companies must minimize residual emissions and then offset them through carbon sequestration actions.
• The SBTi movement has rapidly gained international recognition for its rigor, reliability, and the credibility of the people behind it.
• Several thousand companies of all sizes have rapidly adopted the scientific approach it promotes. To date, nearly 6,800 companies worldwide have signed up to the SBTi.