This blog post was first published by Business Green 24 April 2024 (link below)
by Benet Northcote, Partner, FOUR32 & Trustee, Green Alliance,
(former CSO, John Lewis Partnership, Chief Policy Advisor, Greenpeace UK)
The recent row engulfing the Science Based Targets Initiative around the use of corporate offsets in Scope 3 emissions has exposed some of the tensions at the heart of the environmental movement. It’s yet another headache for boardrooms, keen to do the right thing, but who are left shaking their heads, not knowing what to do. And, depending on your sector, the reputational risks have just gone up, again.
The environment movement has always relished complexity. We’ve all sat in meetings listening to passionate people argue with each other about the best way to solve any random challenge, completely forgetting to communicate to lay audiences about what they must to do. Put two or more sustainability experts in a room together, and they will immediately find something to disagree on.
But the row of offsetting goes deeper than most. To illustrate, allow me to indulge in stereotyping each side of the debate.
On one side are the purists. These are campaigners who understand that the fundamental problems of climate change are caused by burning unabated fossil fuels, chopping down ancient forests and destroying nature, and our “take, make, dispose” consumption culture. They realise that, unless we change how we do things, fundamentally, then any chance of avoiding complete climate breakdown has gone for good. They believe that giving companies an excuse to carry on any sort of business-as-usual activity in return for “offsets” is giving up. Of course, the purists are right.
On the other side are the realists, who are equally passionate about the importance of urgent, rapid decarbonisation, but also understand that carbon markets are going to be vital to unlock the private capital needed for the investment in nature-based solutions we need to restore our damaged ecosystems, and to help rapidly growing economies in the global south develop as cleanly as possible, as opposed to simply following the broken, dirty growth strategies that have left the planet and humanity in the mess we find ourselves. Of course, the realists are right.
What to make of it all?
Well, firstly, it was an unforced error for the SBTI to become the lightning rod for this debate. SBTI has a great reputation and is generally understood by boardrooms to add credibility. Several companies I know proudly state their SBTI validated targets as proof of their commitment. The brand has taken a real hit over the past few days. The standards that the SBTI have created are bigger, I think, than many realise.
It’s time for the SBTI to consider becoming part of the International Standards Organisation system, and all the various global national standards bodies supporting them. Changes would then be agreed through an open process. This would have the additional advantage of allowing the global assurance industry to support companies in validating their targets and their performance. Global businesses understand ISO standards and there are questions about the global scale that a private standard writer and assurer can achieve.
Secondly, real-economy companies should still commit to the current SBTI standard and set suitably ambitious 2030 and 2050 targets. And their plans should not – in nearly every case – include plans for offsetting, even for Scope 3. There might well be a role for offsets eventually, but now is not the time for them for most companies. This is not to rule out the importance of experimenting with carbon removal solutions. What’s not to like about Business Green Editor in Chief, James Murray’s favourite band, The 1975, experimenting with Carbon Removals for their recent concerts at the O2? Some companies can look at how they might use them, but only as part of an authentic leadership position underpinned by driving out fossil fuel use and other climate destructive activities. In other words, once you’ve done everything else, then carbon markets might have a role to play. But how you nuance this conversation with your stakeholders can be the difference between looking like a leader or a lazy laggard.
There is one sector that should be actively involved in the debate, however. Financial services hold significant financed Scope 3 emissions (Category 15) and are key participants in unlocking private sector capital. I am not saying that a dash for generally discredited carbon offsets is a good idea, but how they might use them is, I think, a responsible debate to lean into. There’s obviously lots of complexity here, but we are going to need a lot of money.
Navigating this complexity is hard and at FOUR32 we spend a lot of time helping companies find the right path. With commonsense and a commitment to driving out fossil fuels, it is possible for companies to do the right thing and to tell people about it.
Comments