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Keeping you in-the-know on environmental, social and governance developments

Just when it seems the climate/carbon offset world can’t get twisted any further… On Tuesday, the SBTi Board of Trustees issued a statement “on use of environmental attribute certificates, including but not limited to voluntary carbon markets, for abatement purposes limited to scope 3”:

“While recognizing that there is an ongoing healthy debate on the subject matter, SBTi recognizes that, when properly supported by policies, standards and procedures based on scientific evidence, the use of environmental attribute certificates for abatement purposes on Scope 3 emissions could function as an additional tool to tackle climate change. Consequently, SBTi has decided to extend their use for the purpose of abatement of Scope 3 related emissions beyond the current limits.”

This is a significant change in philosophy and many observers believed this would send shockwaves through the offset market. SBTi itself stated that it believed this would “accelerate the decarbonization of value chains with compensation logic while companies make their way to eliminate carbon emissions at the root through innovation and technology improvements.”

Within hours of the statement’s issuance, claims surfaced that the organization violated internal governance mechanisms in making and publishing the statement. Then yesterday – around 24 hours later – a bomb went off. Not a literal bomb, but a response published by SBTi staff strongly rebuking the organization’s Board of Trustees:

“By communicating [the April 9 statement] as a decision made by the SBTi rather than a position of the Board, the Board of Trustees undermines ongoing work by SBTi staff to make recommendations around the considered use of Environmental Attribute Certificates (EACs). The SBTi’s Standard Operating Procedure, approved by the Board of Trustees in December 2023, does not give the Board sole decision-making authority to decide that environmental attribute certificates may be used in this way under SBTi standards.

The SBTi Technical Council, which is ‘an independent deliberation and technical decision-making body, with delegated authority from the Board, to review and approve SBTi standards and other normative documentation’, was neither informed nor consulted on the topic, and did not provide approval on such a significant decision. Furthermore, SBTi staff were not informed of the statement before publication, nor were we consulted on its contents.

… we have not completed analysis and synthesis of the evidence submitted as part of the Call for Evidence. The SBTi is currently undertaking a systematic assessment of the evidence, which, along with public consultation, will inform potential revisions to the Corporate Net-Zero Standard. The SBTi’s standards will not change until we have completed the necessary research, consultation, and governance steps -all specified within SBTi procedures.”

Here are the juiciest parts:

“Carbon credits are not permitted for emissions reductions according to the Corporate Net-Zero Standard nor the Financial Institutions Guidance…

We regret that this statement has caused concern, confusion, and damaged the trust of critical stakeholders…

We call upon our partners in the ecosystem to support our efforts in holding those responsible accountable.”

But wait – there’s more…

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Photo credit: Timon –

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The Editor

Lawrence Heim has been practicing in the field of ESG management for almost 40 years. He began his career as a legal assistant in the Environmental Practice of Vinson & Elkins working for a partner who is nationally recognized and an adjunct professor of environmental law at the University of Texas Law School. He moved into technical environmental consulting with ENSR Consulting & Engineering at the height of environmental regulatory development, working across a range of disciplines. He was one… View Profile