Part I: The SBTi Controversy and Voluntary Action

By Dr Jennifer Jenkins , Chief Science Officer, Rubicon Carbon

If you’ve followed corporate sustainability or the carbon market for any length of time you’ve undoubtedly heard a lot about the ongoing controversy over at SBTi(1). In October 2021, SBTi released the first version of its Corporate Net Zero Standard, and at the same time, SBTi rendered carbon credits off-limits as a tool for helping companies meet their targets. That guidance on credits stood for over two years, though it was controversial and had the adverse effect of limiting corporate investment in climate action through the voluntary carbon market (VCM).?

Then, in April 2024, the SBTi Board of Trustees released a statement encouraging the limited use of carbon credits to help meet Scope 3 emissions targets(2) — this was essentially a reversal of SBTi’s earlier anti-offset position.?

According to reports that followed the announcement, the SBTi technical staff disagreed with the Board, and there has been much debate and discussion inside and outside the organization about how to proceed. Amid this controversy, SBTi’s CEO resigned.?

In July 2024, SBTi delivered more discouraging news about the evolution of its view on incorporating the carbon market into the corporate net zero journey. While still calling for a review of its Corporate Net Zero Standard, SBTi continues to discredit carbon credits as a tool for companies to help reach their Scope 3 emissions targets.?

SBTi has promised more guidance in 2025, thereby leaving corporations with a lack of clarity at a critical juncture. Many net zero-committed companies, including Amazon and, most recently, Air New Zealand, have abandoned or been kicked out of SBTi. According to Accenture, only 18% of global companies are cutting emissions fast enough to meet net zero goals, which begs the question: what good is SBTi’s guidance if companies can’t follow it??

Here’s the thing: we are relying on the corporate sector to provide the vast majority of the $130 trillion required for the energy transition by 2050. If we expect companies to help fund the solution, we need to create incentives that get them interested, not barriers to action that limit their options.?

And if there is no support for even limited use of the voluntary carbon market to help meet emissions targets, many corporate actors will simply abandon their voluntary net zero plans because the acceptable path to meeting their targets is too stringent and inflexible.?

SBTi is at a crossroads: it can either reconsider its Corporate Net Zero Standard to build a more resilient roadmap to net zero or pursue its current course while losing relevance, time, and influence. SBTi may earn applause from some for maintaining rigid and impractical net zero guidance, but it will miss the opportunity to lead the world through its most difficult challenge to date.?

Click through for the next installment in this series: Why Companies Need Options.

(1)?The Science-based Targets Initiative (SBTi) is a UN-sponsored organization that helps companies set and validate ambitious climate goals based on the latest climate science to reduce greenhouse gas emissions and mitigate global warming.?

(2)Scope 1 emissions are direct greenhouse gas emissions from company-owned or controlled sources, Scope 2 emissions are indirect emissions from the generation of purchased electricity, steam, heating, and cooling consumed by the company, and Scope 3 emissions encompass all other indirect emissions that occur in the company’s value chain.