Carbon offsetting
Carbon markets
Carbon emissions
SBTi
Scope 3
The Science Based Targets initiative (SBTi) has made a pivotal announcement: the inclusion of Scope 3 emissions in environmental attribute certificates. This means that companies will now be able to compensate for their Scope 3 value-chain emissions using tools like carbon units. This announcement comes after it has prioritised an overhaul of its Corporate Net-Zero Standard throughout 2024, with a special focus on improving the management of Scope 3 emissions. This revision aims to integrate the responsible usage of environmental attribute certificates, including those from voluntary carbon markets, as a viable tool for emissions reduction.
A plane flying among the clouds seen through tree leaves. AI generated picture.
In a recent statement dated 9 April 2024, the SBTi reported significant progress following a six-month consultative period, which included a comprehensive survey to gather evidence on this matter. The initiative acknowledges the ongoing debate but supports the certificates' use when backed by rigorous scientific policies and standards.
Read more: ICVCM certifies major carbon standards, paving the way for transparent carbon markets
According to Kyle Harrison, the head of sustainability research at BloombergNEF, this move could boost the market from its current $2 billion to more than $1 trillion a year by 2050.
The expanded use of these certificates for Scope 3 emissions will involve setting specific criteria, thresholds, and rules by the SBTi. This approach will ensure that the certificates are valid and effective in contributing to environmental restoration.
Furthermore, the SBTi is committed to collaborating with other key initiatives and stakeholders to refine the Scope 3 framework. This includes establishing clear guidelines for the use of these certificates in setting emissions reduction targets.
While SBTi will not validate the quality of carbon units directly, it will provide essential guidance to ensure that validation entities have a thorough understanding of the new requirements.
Read more: Bullish growth projections in the carbon market
By July 2024, the SBTi plans to release the first draft of these new standards, aiming to boost decarbonisation efforts across value chains. This strategic revision underscores the initiative's dedication to fostering substantial environmental action through improved technological and innovative solutions.
The recent endorsement by the SBTi to include Scope 3 emissions in environmental attribute certificates represents a pivotal shift that could significantly enhance the carbon unit (carbon credit) market. The chief executive of Carbon Growth Partners, Rich Gilmore, commented that the decision could be ‘massively consequential’ for carbon prices.
For DGB Group, a provider of high-quality carbon units, this development presents a substantial opportunity. As companies increasingly seek reliable means to compensate for their entire value chain emissions, DGB's carbon units align perfectly with these new requirements. Our verified carbon units are designed not only to meet rigorous standards but also to ensure that our clients achieve their sustainability goals. This alignment with SBTi's updated guidelines ideally positions DGB and its stakeholders to capitalise on the anticipated expansion of the market, driven by growing demands for comprehensive carbon compensation solutions that support real-world environmental goals. The move by the SBTi could transform the landscape of corporate environmental strategies, potentially boosting the market value of carbon units and solidifying the role of high-quality offsets like those provided by DGB in global sustainability efforts.
