ICVCM responds to SBTi’s Scope 3 papers: Every minute, every day, every tonne counts

Every day that companies wait for clarity on what to do about their scope 3 emissions, we lose the opportunity to reduce and remove thousands of tonnes of greenhouse gas emissions that are warming our planet to a level that ecosystems and people cannot survive.

SBTi’s recent papers are important contributions to the discussion on scope 3 emissions, but they do not yet provide any clarity on the fundamental questions of whether and how companies should use carbon credits as part of their decarbonisation strategies. We cannot wait until late 2025 to resolve these questions – every minute, every day, every tonne counts.

We share the SBTi position that investment in carbon credits should not be a replacement for internal emissions reductions. And we recognise the fact that the historical quality of carbon credits on the market has been mixed. But there are two key points to add to this picture.

The first is that the voluntary carbon market is currently going through a process of significant reform, including ICVCM’s work to increase the supply of high-quality credits. Calyx Global’s data shows that this is already having an impact, with the proportion of E-rated credits in new issuances dropping by almost 50% from January to July 2024. This virtuous cycle will accelerate as our assessment decisions are rolled out and market actors respond.

The second is that the evidence suggests that carbon credits are already helping to supplement, not substitute for, internal emissions reductions. Companies that use carbon credits are investing three times more in emission reduction efforts within their value chain and decarbonising at twice the rate of companies that do not.

However, given current technological limits, some emissions cannot be eliminated immediately. The question, then, is what to do about those emissions. Ruling out carbon credits effectively tells companies to do nothing. That cannot be right.

The enemy of climate action is inaction. The role of corporate climate governance is therefore to provide on-ramps that can move companies from doing nothing to doing something today, as VCMI is doing with its Claims Code of Practice. Carbon credits are one such on-ramp that can help to reduce and remove emissions, while simultaneously providing economic incentives for companies to accelerate their internal emissions reductions.

SBTi has sought input in relation to its scope 3 Scenarios, including input about the role of carbon credits for different use cases, by 12 September.¹ We encourage academia, research organisations and others to submit their experiences and evidence of pragmatic, science-aligned approaches to scope 3 decarbonisation, including paywalled data, case studies and internal reviews. Give the SBTi and others that evidence, information, and experience.

Secondly, we invite the SBTi to complement its synthesis of past evidence with an examination of the impacts of current transformational initiatives to develop a more holistic view of the market’s future potential – and to accelerate its process to give companies the clarity and incentives needed to move from inaction to action. Every minute, every day, every tonne counts.

[1] Science Based Targets initiative (SBTi). (2024). Aligning corporate value chains to global climate goals. SBTi Research: Scope 3 Discussion Paper: Scenario 3: Use of carbon credits from mitigation activities within the value chain to substantiate value chain.