Is a watchdog for corporate climate commitments caving to industry?

The charity that serves as a major watchdog on corporate climate commitments faces allegations that it’s caving to industry pressure to relax standards.

The Science Based Targets initiative (SBTi) assesses companies’ sustainability pledges and develops standards for how companies can set goals to fight climate change that are backed by science. SBTi’s policies are supposed to prevent greenwashing, which is when companies make misleading statements about their environmental impact.

One way SBTi has tried to crack down on greenwashing is by limiting the use of carbon offsets. Offsets are supposed to cancel out some of a company’s carbon footprint, even though that’s often only reflected on paper and not in the real world. SBTi’s tough stance on carbon offsets has provoked the ire of industry bigwigs and some policymakers, who rely on offsets and say that SBTi’s standards are too tough to meet.

The quarrel came to a head last week, when SBTi put out an explosive statement seeming to soften its stance on offsets, giving companies a potentially easier way out of actually reducing their greenhouse gas emissions. The conflict is far from over, and the outcome could influence whether companies’ commitments regarding climate change move them toward using more renewable energy or more offsets instead.

The conflict is far from over, and the outcome could influence whether companies’ commitments regarding climate change move them toward using more renewable energy or more offsets instead

Tellingly, Jeff Bezos and his billions seem to play a role in the debacle. Since 2020, when the e-commerce tycoon launched the $10 billion Earth Fund, Bezos has tried to remake himself as a major climate philanthropist even as Amazon’s greenhouse gas emissions skyrocketed. SBTi has been around since 2015, but the Bezos Earth Fund became one of its major funders in 2021 with an $18 million grant.

At meetings hosted by the Bezos Earth Fund in London in March, lobbying groups peppered representatives from SBTi with “a barrage of implicit and direct requests to relax their position on carbon offsets,” Bloomberg reported over the weekend. Things even got physical during a side conversation, according to Bloomberg, when a “pro-offsets attendee” grabbed an SBTi staff member by the shoulder.

Earlier that month, SBTi had removed more than 200 companies from its list of vetted corporate climate commitments, including companies as well-known as Microsoft, Unilever, and Walmart. In 2023, SBTi also delisted Amazon, whose CO2 emissions have increased by nearly 40 percent since the company pledged in 2019 to cut that pollution down to net zero.

Weeks after the meeting, on April 9th, the SBTi Board of Trustees released a statement that sent such a shock through the organization that at least one of its scientific advisors reportedly resigned. The statement said that certificates representing carbon offsets could be used to address indirect emissions resulting from a company’s supply chain and the use of its products. That’s a big deal since those indirect emissions (aka Scope 3 emissions in technical terms) often make up the largest chunk of a company’s carbon footprint.

Backlash was swift. Staff members penned a letter calling for SBTi’s chief executive and board members backing the recent statement to leave their posts, according to Reuters. The board of trustees hadn’t followed protocol in changing SBTi’s standards, they said.

Days later, the board of trustees put out a “clarification statement” saying that the organization’s policy hadn’t changed after all. Any official shift would have to go through the group’s standard operating procedures, it said, and a draft proposal on “potential changes” to its guidance on indirect emissions would come in July.

SBTi didn’t immediately respond to The Verge’s request for comment. A spokesperson for the Bezos Earth Fund told Bloomberg that it does “not make decisions for [SBTi], we do not sit on their board, and we weren’t involved” in the board of trustees now infamous April 9th statement.

The move to potentially expand the use of carbon offsets did garner some support, Reuters reports. A group of 15 companies and nonprofits reportedly sent the board a letter saying that “this brave shift by the SBTi Board will unlock more climate finance for natural assets and local communities in the Global South, accelerating global climate action.”

A lot of carbon offset projects are based in economically developing countries where governments can make money from efforts to plant trees that trap and store carbon dioxide. A carbon credit represents a metric ton of CO2 sequestered, and companies can then claim those credits as evidence that they have canceled out some of their own pollution.

However, a steady stream of investigations and research has found that many of those credits don’t represent real emissions reductions at all. Oftentimes, projects overestimate the amount of carbon dioxide they can offset. Or trees might not survive long enough to keep CO2 from building up in the atmosphere and heating the planet. In other instances, tree farms might replace native vegetation, doing more ecological harm than good and negatively impacting the livelihoods of communities that depend on those resources.

In light of all that evidence, some companies have started to focus more of their attention on finding less-polluting sources of energy. Airlines, for example, are talking more about developing sustainable aviation fuels after getting called out for purchasing low-quality carbon credits. Whether SBTi continues to move the needle on offsets and in what direction depends on what steps it takes next.

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