The Science Based Targets initiative (SBTi) may soon open the door for companies to use carbon credits to meet their voluntary climate goals, according to Guy Turner, head of ESG ratings at MSCI. Speaking at Climate Week NYC 2024, Turner hinted that SBTi will eventually allow the use of carbon credits to cover Scope 3 (value chain) emissions, a shift from the current policy. Turner emphasised that internal emission reductions alone cannot meet corporate environmental targets.
Aerial view of a lush forest captured from a supply plane. AI generated picture.
SBTi, a leading standard-setter in corporate environmental action, currently restricts companies from using carbon removal credits for near-term Scope 3 targets. While no immediate changes are expected, Turner suggested that updates could come after SBTi finalises its revised Corporate Net-Zero Standard by late 2025.
Read more: SBTi eyes early carbon removal in revised net-zero standard
Despite uncertainty around carbon credits, companies are increasingly adopting SBTi-validated climate targets. MSCI reported that in the second quarter of 2024, nearly 1,000 firms with a combined carbon footprint of 3 billion tonnes embraced SBTi goals, while only a small number withdrew.
Turner acknowledged concerns about the integrity of carbon credits, noting that unresolved quality issues have slowed demand. However, he highlighted that corporate confidence in carbon markets could grow if these issues are addressed. A promising step occurred in December when SBTi committed to collaborating with key voluntary carbon market (VCM) bodies to create a framework ensuring market integrity.
Read more: The Science Based Targets initiative and carbon offsetting: striking the right balance
Turner remains optimistic about the VCM’s growth, predicting that demand will surge by 2030, driven not just by corporate goals but also by sovereign and compliance market buyers.
Carbon offsets must be part of a broader approach that integrates sustainable practices and restoration efforts. By combining immediate carbon compensation solutions with long-term strategies, we can make a significant impact. At DGB Group, we are committed to supporting these efforts through our high-quality, verified carbon units that help companies achieve their sustainability goals and contribute to a healthier, more sustainable future.
