Green Strategies, Inc.’s Post

This is a key unlock for #climatefinance! 🗝💰 TLDR: SBTI fixing a major roadblock to corporate #decarbonization investments! Currently, corporations set #netzero targets -> find #Scope3 impossible to tackle -> cannot credibly claim emission reductions from many investments because of current guidance and poor data visibility. 💡 Good for Science Based Targets initiative to acknowledge that industry wants to go further, faster. I was blown away during the consultation period to learn how many corporate dollars are sitting on the sideline waiting on credible guidance on treatment of value chain investments. Corporates know that value chain emission reductions (insets) are more impactful than beyond value chain mitigation (offsets). Yet current guidance from SBTI prohibits use of environmental attributes to abate Scope 3 related emissions. Many will argue that SBTi is bending to the will of industry in allowing "questionable carbon credits" to be used to achieve Scope 3 emission targets. I fully agree. Cheap, avoidance-based carbon offsets should not be permitted to compensate for missed reduction targets. The next step will be the hardest: to draft "basic rules, thresholds, and guardrails for the potential use of environmental attribute certificates." As always, data is key. As are strong, independent, third-party verifications of life cycle impact analyses. I'm confident that NGO's and industry will align on credible, impactful solutions (like #eNG from TES) that can be demonstrably proven to reduce supply chain emissions. What are your thoughts on this shift from SBTi? Will this have the intended effect of accelerating decarbonization? What are the primary concerns? https://lnkd.in/e952SD5U

This is a very significant announcement by the Board of Trustees of the Science Based Targets initiative (SBTi). At Energy Law Unlimited LLP we have always believed that the voluntary carbon credit market will be a critical tool in achieving our collective climate ambitions. The challenge has always been a lack of trust and credibility.  Nobody wants to be accused of “greenwashing”.   However, advancements in the Voluntary Carbon Market Integrity Initiative (VCMI) framework announced last year has seen a significant shift in attitudes: by setting clearer guidelines and standards, VCMI helps ensure that carbon credits are both credible and effective in contributing to real environmental benefits. The is reflected in the SBTi’s endorsement of offsets for Scope 3 emissions.  The implications of this could be very significant for our sector. The SBTi has been a cornerstone for corporate climate action, with over 3,000 companies currently committed to setting science-based emissions reduction targets. These companies span a diverse range of industries and geographies, underscoring the global commitment to climate stewardship. Scope 3 emissions, which include all indirect emissions in a company’s value chain, often represent the majority of a company's carbon footprint. Addressing these emissions is complex due to their diffuse nature across numerous activities and partners. SBTi’s announcement not only provides companies with additional tools to meet ambitious climate goals but will also stimulate the demand for high-quality carbon credits. If even a fraction of these companies—say 10%—choose to offset just 10% of their Scope 3 emissions, this could translate into millions of tons of CO2 offsets annually. This demand could exponentially increase the size and scope of the carbon credit market. So why are we excited about this at Energy Law Unlimited LLP: > A buoyant carbon credit market provides vital income streams for projects not previously available; > This will unlock investment in our sector that can really move the needle on the “hard to do” projects; and > With investment comes innovation and an acceleration towards achieving our collective ambitions on achieving Net Zero. In light of these changes, there is an opportunity for companies to understand and strategically integrate carbon offsets into their broader sustainability strategies and for developers to unlock hard to get investment. If you need help navigating this new and exciting landscape do get in touch. #Sustainability #RenewableEnergy #CarbonCredits #ClimateAction #SBTi #VCMI https://lnkd.in/ehSrDepq

📓 Summary of the Evidence Synthesis Report: The #SBTi Corporate Net-Zero Standard, initially launched in October 2021, is currently under revision as part of the #Corporate #Net-Zero #Standard V2.0 project. This revision adheres to the Standard Operating Procedure for the Development of SBTi Standards. 💭 The terms of reference for Corporate Net-Zero Standard V2.0 outline several deliverables. 💭 On July 30, 2024, the SBTi unveiled 4 technical outputs, with 2 papers being of particular significance. 💭 Notably, these included the #Scope 3 discussion paper and the #Evidence #Synthesis #Report on the effectiveness of Environmental Attribute Certificates in corporate climate targets - Part 1: Carbon Credits, also called Emissions Reduction Credits. 💭 The report summarizes the body of evidence submitted to the SBTi during the Call for Evidence period related to carbon credits representing emissions reductions or avoidance. 💭 The report on Carbon Credits is the 1st of the 4 distinct reports related to EACs notably, energy attribute certificates for electricity, other energy carrier certificates, and commodity certificates conveying a specific emission factor. 🧠 What are #Environmental #Attribute #Certificates? EACs encompass a wide range of instruments that certify and communicate specific environmental or sustainability attributes of a given activity or commodity. These certificates enable companies to substantiate their environmental claims, support compliance with voluntary or regulatory schemes, and enhance transparency within the value chain. 🧠 What are #Carbon #Credits? EAC instruments that convey the mitigation outcomes of an intervention are referred to as carbon credits. Carbon credits are a specific type of EAC that quantifies the reduction or removal of one metric ton of CO2 eq emissions. They are used in carbon offsetting to compensate for emissions that cannot be eliminated directly. 🧠 #Compliance Carbon Credits: Used in regulated markets under cap-and-trade systems. eg: European Union Emissions Trading System (EU ETS) PS: More information about the report will be shared in the next post. https://lnkd.in/ed5BYC4x https://lnkd.in/eZCSMS9K #SBTi #NetZero #CarbonCredits #EnvironmentalSustainability #EACs #ClimateAction #Scope3 #CorporateResponsibility #CapAndTrade #CarbonOffsetting #ClimateChange #Sustainability #RenewableEnergy #EnvironmentalImpact #GreenEconomy

The Science Based Targets initiative (SBTi) recently announced a change in its policy regarding carbon credits (also called offsets) for setting science-based targets. Here's what I understood: * Companies can now use carbon credits to address some Scope 3 emissions. Previously, credits weren't allowed for this purpose. Scope 3 emissions are those that occur in a company's value chain but are not directly controlled by them (e.g., emissions from suppliers or customer use of products). * This is intended as an additional tool alongside efforts to directly reduce emissions. Companies should still prioritize reducing their own footprint before using credits. * The SBTi is still developing specific rules and guidelines for how companies can use carbon credits. These are expected by July 2024. There are mixed views on this change: * Supporters say it allows companies to accelerate emission reductions in their value chain while they develop long-term solutions. * Critics worry that companies might rely too heavily on credits instead of making real reductions in their own emissions. They also express concerns about the quality and verification of some carbon credits. What is your stake on it? https://lnkd.in/g6vnMf7N

Offsets unlikely to be allowed: SBTi confirms priority remains direct decarbonization for Scope 3 emissions  Earlier this year, the Science Based Targets initiative announced it would be reviewing its Corporate Net-Zero Standard to provide additional guidance on addressing #Scope3 emissions. The SBTi Board indicated it planned to extend the use of environmental attribute certificates (EACs), such as carbon credits, to abate Scope 3 emissions, which was met with backlash within and outside SBTi.      Last week, SBTi released several outputs, including a discussion paper exploring scenarios on how EACs, including carbon credits, may be used in science-based target-setting contexts.  The scenarios it outlines do not include offsetting emissions, with SBTi stating that priority remains the direct #decarbonization of the value chain.     SBTi plans to release a draft Corporate Net-Zero Standard for consultation towards the end of this year.    Scope 3 emissions include indirect emissions within a company’s #valuechain and represent 70% or more of the total #greenhousegas emissions for many companies. This means managing these emissions will be critical to achieving decarbonization targets.    Does your business have, or is it planning to set, a Scope 3 Target? givvable.com helps organizations SCREEN existing suppliers + VET potential suppliers to identify which businesses are taking action that would contribute to, or support, your targets (and which suppliers are not!). Our flexible toolkit also provides suppliers pathways to improve via ENGAGE, our supplier engagement tool, which builds their awareness and helps them to start taking steps to measure and reduce emissions. *CONTACT US TO LEARN MORE* >> https://lnkd.in/gQAjgBAZ https://lnkd.in/eg5Cw6zB #scope3emissions #suppliervetting #supplierscreening #esgdata #sustainabilitytech #supplychains #suppliersustainability #emissions #netzero #sustainablesourcing Megan Pepper Monica Rivera Jatin W.  

💥 The Science Based Targets initiative (SBTi) recognizes the use of carbon credits to mitigate scope 3 emissions. 🌍 A date to remember in the history of the Voluntary Carbon Market (VCM).   The decision follows the VCMI recommendations on using carbon credits for scope 3 claims, alongside the announcement  to create  the European Union Carbon Removal certification standard. 👉 Let’s not misinterpret this major development. Carbon offsetting strategy is a solution to mitigate unabated emissions only as part of a long-term GHG reduction plan. A high-integrity science-based reduction journey  remains the priority. The consensus is clear: VCM, and offsetting practices are essential to reach Paris Agreement global net zero objectives. 👈 In practice, companies are encouraged to include an offsetting strategy via the retirement of carbon credits in their net zero emission trajectory to tackle scope 3 emissions: a lower-cost mitigation alternative beyond their value chain. In fact, businesses have much to profit from a decarbonization strategy that is complemented by compensation solutions. MSCI Carbon Markets last year’s research showed that companies that engage with compensation solutions, on average, reduce their emissions faster than those that do not. MSCI Carbon Markets "Corporate emission performance and the use of carbon credits": https://lnkd.in/eiQcZYFb 📍 With growing public and regulation scrutiny on environmental claims (e.g. EU Green Claims Directive), companies need to ensure the robustness and credibility of their ‘green’ communication and marketing strategy. They should rely on independent certifications aligned with best practices and regulations’ requirements that ban misleading claims like ‘green’, and ‘carbon neutral’ (when based on offsetting), among others. Carbon Offset Certification is a Swiss-based and independent global label developed in partnership with Bureau Veritas Group. COC certification label guarantees the credibility and transparency of environmental claims based on the strictest regulations and standards for carbon footprint accounting, offsetting, and third-party independent verification. SBTi Statement: https://lnkd.in/eg5Cw6zB #CarbonCredits #Scope3 #SBTi #NetZero #CarbonOffsetCertification #CarbonMarkets #Offset #BureauVeritas

The IPCC is very clear that immediate and drastic action is needed in order to limit global warming to the critical threshold of 1.5C, translating to a global emissions reduction of 50% by 2030 as well as reaching net zero in 2050. It is great to see the Science Based Targets initiative (SBTi) embracing the use of carbon offsets for Scope 3 emissions as the voluntary carbon market is a crucial component to achieve these ambitious targets. While there is lively debate whether the use of carbon credits reduces a company's ambition to reduce their own emissions, a number of studies have shown the opposite. Namely, a positive association between companies investing in carbon credits AND reducing their own emissions.

Research update!📚 The SBTi is studying several ways to lift the barriers around scope 3 target-setting and implementation including new metrics, target boundaries and the role of a company’s influence over its value chain. As part of this process, we are considering the potential role of environmental attribute certificates (including carbon credits) and have outlined how this might work in theory. None of the illustrative scenarios outlined in the publication involve offsetting emissions. In each of the scenarios the priority remains the direct decarbonization of the value chain. Credits cannot be used as a substitute for this.  We look forward to the extensive public consultation on the draft Corporate Net-Zero Standard! https://lnkd.in/ezdQreit #Sustainability #NetZero #CorporateResponsibility #Scope3 #SBTi

My perspective on the @SBTi's inclusion of VCS credits, is from the supply side. The total pool of carbon credit based financing is by design meant to be limited. It is to be accessible only for projects whose's environmental and social impact is outsized relative to that same project being developed in a more conducive geography. For example, compared to a 25 MW Coal/Fossil fuel powerplant with cheap but polluting fuel, a solar PV plant of 25 MW being developed in north Malawi is a very expensive proposition for any group of investors, however given the limited infrastructure there, it is of critical importance for Malawi to develop leap frog technologies. The carbon credit based project in Malawi therefore passes several tests of Additionality before being recommended for issuance of credits under the current standards and methodologies. While polluter companies must absolutely limit their emissions at the earliest, and the quality of carbon credits must be extensively scrutinised, Excluding carbon credits or environmental attribute certificates is equivalent to "throwing the baby with the bath water" and misses the trees for the woods. If it were not for the buttress provided by carbon credits, which investor would choose to willingly invest in a solar PV project compared to a much cheaper but damaging coal/fossil fuel power plant? Which entreprenuer would invest in recycling low values plastics with the required imported machinery if it were not for the merest sliver of revenue that plastic credits would help with? How is it that the Shells, BPs and Reliances of the world are not held accountable for the extensive subsidies they recieve from taxpayers for oil and plastics but impact entreprenuers are held to such intensive scrutiny for their claims of additionality? Can the methodologies and standards be more robust? absolutely and it is tremendously encouraging to see the standard bodies pulling up their socks given. There are vast misconceptions about carbon credits that I have had clarified with my current adventures at South Pole, my orient has changed from buyer side to supply side and I understand the immense pressures that entrepreuners undertake with highly complex and risky projects only for the reward of doing good. Debates are welcome and I am sure there are very many things about my current technical field I still do not understand. But from a perspective of getting the right technologies financed at the right geographies for the right reasons, SBTi can set the appropriate standards and benchmarks for the companies choosing to invest in the voluntary carbon markets.

Exciting Developments in the World of Carbon Markets A few days ago the Science Based Targets initiative (SBTi) announced the inclusion of carbon credits for Scope 3 Emissions. As part of its commitment to revising the Corporate Net-Zero Standard in 2024, SBTi is now opening the door to the strategic use of voluntary carbon markets for abatement purposes beyond its previous limitations. Key Takeaways: - Scope 3 Emissions Focus: The revision prioritises tackling Scope 3 emissions, the most challenging and extensive source of corporate carbon footprints. - Guidelines and Cooperation: SBTi is setting specific guardrails, thresholds, and rules for these certificates to ensure they contribute effectively to emission abatement strategies. This strategic update signifies a notable shift in how companies can leverage voluntary carbon markets to complement their decarbonisation efforts, especially in the complex area of Scope 3 emissions. The first draft of the basic rules, thresholds, and guardrails for environmental attribute certificates are expected by July 2024. This development marks an important moment in our collective journey towards a more sustainable low-carbon future. Read the full article here: https://lnkd.in/eg5Cw6zB #CarbonMarkets #Sustainability #SBTi #ClimateAction #Scope3 #Decarbonization #NetZero