The world’s most prominent verification program for corporate climate pledges is allegedly in turmoil following its board of trustees’ unilateral decision this week to allow carbon offsets to count toward companies’ supply chain emissions reduction targets.
In a letter to the board seen by Grist, dozens of staff members and program managers at the Science-Based Targets Initiative, or SBTi, said the decision caused “severe reputational damage” and implied it was at risk of putting their organization in ‘ to change a “greenwashing platform”. .”
The letter called for the resignation of Luiz Amaral, CEO of SBTi, and board members who supported the change, as well as the withdrawal of the new policy.
“The actions of the CEO and the board have resulted in significant damage to our organization’s reputation and viability,” the letter states.
The SBTi is a non-profit organization that sets standards for corporate emission reduction targets. It evaluates hundreds of companies’ targets each year and certifies those it deems legitimate. Companies in turn advertise the SBTi’s certification as proof that their promises are meaningful.
Among the staff’s main concerns is that access to carbon credits will encourage companies to offset rather than reduce greenhouse gas emissions from transporting and manufacturing materials they buy and products they sell to consumers. Scientists say companies should do everything they can to limit these emissions, known as “scope 3” emissions, before trying to cancel them out with credits.
Carbon credits are supposed to represent a measure of carbon emissions avoided or removed from the atmosphere – through projects such as planting trees or installing wind turbines – but experts say they are questionable if they actually work. More than 90 percent of the rainforest-based credits offered by one popular organization last year were shown to be “worthless,” largely because they promised to protect forests that were never threatened. (The issuer of those credits disputed the findings.)
The SBTi staff members also said that the board moved “prematurely” without notifying or adequately consulting with its technical advisors.
“The Technical Council was not informed, consulted or given approval for such a significant decision,” they wrote, calling it a “clear and apparent breach” of the SBTi’s governance structures. At least one of the SBTi’s technical advisory group members — Stephan Singer, a senior adviser at the nonprofit Climate Action Network — said he resigned from the SBTi over the issue. In his letter of resignation obtained by the Financial Timeshe calls carbon credits “scientifically, socially and from a climate perspective a farce.”
Doreen Stabinsky, another SBTi adviser and a professor of global environmental politics at the College of the Atlantic in Maine, told Grist that the move is a “corporate takeover of SBTi that will destroy any ‘science-based’ credibility they have , will undermine.”
Michael Dantas/AFP via Getty Images
The trustees’ sudden decision may have been influenced by external pressure to boost business prospects for the voluntary carbon market. Over the past few years, investigations and public inquiry into “deceitful” offsets have made prospective buyers wary of carbon credits; perhaps out of fear of backlash, companies bought 17 percent fewer carbon credits in 2022 than the previous year.
If the SBTi softens its position on these credits, it could increase demand for them. Carbon credit programs will benefit from a larger pool of interested buyers, and companies will be able to more easily meet their emission reduction targets. Indeed, dozens of companies told the SBTi in a survey published last month that achieving their scope 3 targets “too much of a challenge,” and the overwhelming majority of positive responses to the board’s distaste for carbon credits came from carbon market financiers and participants such as the American Forest Foundation, Climate Impact Partnersand Indigo Ah.
María Mendiluce, CEO of the We Mean Business Coalition – which advocates corporate climate action and is one of the SBTi’s five partner organizations – said in a statement that the move will allow companies to “bring more innovation and investment to reduce emissions from their value chains, while also bringing in much-needed funding for climate projects in the global south.”
Organizations that set standards for the voluntary carbon market to help it grow, including the International Emissions Trading Associationthe Integrity Council for Voluntary Carbon Marketsand the Voluntary Carbon Markets Integrity Initiative, also supported the new policy. The latter recently took a similar stance on carbon credits being used to offset supply chain emissions that have increased similar concerns among experts.
“The flawed business model of offset credits is at risk, and this wild move is an attempt to keep the business model alive,” Sybrig Smit, a policy analyst for the nonprofit NewClimate Institute, told Grist. “This is not an attempt to save the climate.”
Some carbon credit advocates may have directly lobbied the SBTi board for a change in policy. Earlier this week the Financial Times reported that the Bezos Earth Fund, a $10 billion philanthropic organization created by Amazon founder Jeff Bezos and a “core funder” of the SBTi, organized a two-day meeting with SBTi board members in March, at which representatives of the fund urged the SBTi to allow companies to use offsets.
The Bezos Earth Fund is a founding sponsor, along with the Rockefeller Foundation and the US State Department, of a large-scale carbon credit system which was first unveiled at the UN’s annual climate summit in 2022. At the time, a independent analysis suggested that the system would need to attract significant business participation to have more than marginal impact on greenhouse gas emissions and climate finance.
The initiative “basically aims to develop a system that will sell a lot of credits, and they have to find buyers,” said Gilles Dufrasne, head of global carbon markets for the European nonprofit Carbon Market Watch.
The Bezos Fund and its partners reopened their carbon credit system at last year’s UN summit and said they would finalize a framework for the system by Earth Day 2024, less than two weeks after the SBTi board’s announcement. Dufrasne called the timing “curious.”
The Bezos Earth Fund did not respond to Grist’s request for comment, but the philanthropy told the Financial Times it was uninvolved in the SBTi’s new policy on offsets. A spokesperson said the fund is committed to “ensuring that any use of high integrity market mechanisms is subject to strict safeguards, restrictions and rules so that any use of high integrity carbon credits enhances rather than undermines the integrity of corporate climate objectives.”
Neither the US State Department nor the SBTi Board of Trustees responded to Grist’s requests for comment. Amaral, the SBTi’s CEO, did not respond to a message on LinkedIn.
Across academia and the world of advocacy, critics did not hold back in rejecting the SBTi board’s decision. Teresa Anderson, global leader on climate justice for the non-profit organization ActionAid International, said on X that the move “makes the standard for climate action meaningless.” Alison Taylor, a clinical professor at the New York University Stern School of Business, placed that the move was “good news for voluntary carbon markets, bad news for the overwhelming prevalence of BS in this area.”
Other organizations, including Carbon Market Watch, conduct their own efforts to evaluate the private sector decarbonisation plans, but none of them do so on the same scale as the SBTi. In 2022, the organization approved more than 1,000 companies’ climate pledges. It hundreds of them removed of a validation process last month over their failure to submit sufficiently ambitious emission reduction targets.
“It’s just sad,” said Peter Riggs, director of environmental nonprofit Pivot Point, describing the niche position the SBTi has occupied as a widely respected arbiter of corporate climate plans, trusted by both business leaders and climate advocacy groups. “We hoped that SBTi would be the example of integrity at a time when other initiatives were still messing around with settlements. And now they are indistinguishable.”
