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The game-changing SBTI policy shift: Streamlining permanence

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By Bashir Dan

· 6 min read


Imagine standing in a bustling clothing store, mesmerized by a rack of vibrant garments. You pick up a soft cotton T-shirt, and its design catches your eye. But beyond the design and comfort lies a hidden story – a story of unseen environmental impacts stretching far beyond the store's walls. Like most of our daily decisions, this seemingly simple choice contributes to what's known as Scope 3 emissions – the hidden footprint embedded within our everyday lives. For companies, tackling these emissions has long been a challenge, a blind spot hindering progress towards true environmental sustainability.

Demystifying the scopes: A framework for understanding emissions and the SBTI shift

Before diving into the recent game-changing policy shift by the Science Based Targets Initiative (SBTI), let's unpack the different categories of emissions companies grapple with:

  • Scope 1: Direct emissions under your roof – Think of the factory smokestacks spewing smoke or the exhaust fumes trailing from company vehicles. These are direct emissions from sources owned or controlled by a company, making them relatively straightforward to measure and manage.

  • Scope 2: The indirect energy footprint – This category encompasses indirect emissions associated with purchased electricity, heat, or steam. Even though a company might not directly generate these emissions, they contribute to them by consuming energy produced elsewhere. While still within a company's operational boundaries, Scope 2 emissions require tracking and addressing the energy sources powering a company's operations.

  • Scope 3: The elusive value chain impact – Now, we enter the realm of the complex – Scope 3 emissions. Imagine an iceberg, with Scope 1 and 2 representing the visible tip and Scope 3 the vast, hidden underwater portion. These emissions encompass the entire value chain, encompassing everything from a company's suppliers and customers to transportation, product use, and eventual disposal. Think of the cotton grown for your T-shirt, the energy used to manufacture and ship it, and ultimately, how you dispose of it at the end of its life. Since these emissions occur outside a company's direct control, they were previously a significant hurdle in achieving ambitious climate goals.

However, the SBTI's recent policy shift offers a ray of hope. This groundbreaking move allows companies to utilize carbon offsets specifically to address their Scope 3 emissions. This is a significant development, as it empowers companies to finally tackle the previously elusive challenge of Scope 3 and take a holistic approach towards achieving net-zero emissions. The following sections will delve deeper into the details of the SBTI policy shift and explore its potential impact on tackling climate change.

The SBTI policy shift: A game-changer for tackling Scope 3 emissions

The Science Based Targets Initiative (SBTI) recently enacted a groundbreaking policy change that rewrites the rules for businesses in the fight against climate change. Companies can now leverage carbon offsets to address their elusive Scope 3 emissions.

Scope 3 and the power of offsets

Previously, companies grappled with the challenge of effectively addressing Scope 3 emissions. These emissions encompass the entire product lifecycle, from raw material sourcing and manufacturing to transportation, product use, and final disposal. Consider a clothing brand – its Scope 3 emissions might encompass cotton farming in one country, garment production in another, and global shipping before reaching your local store. The new SBTI policy allows companies to purchase carbon offsets to balance the scales on these hard-to-tackle emissions. In our clothing brand example, this could mean offsetting emissions from every stage of the T-shirt's journey, from cotton cultivation to eventual recycling or disposal.

This policy shift represents a significant step forward for several reasons. Here's why it's a game-changer:

  • A holistic approach to climate action: By addressing Scope 3 emissions, companies can now take a more comprehensive approach to climate action. This shift acknowledges the interconnectedness of our world and the crucial role businesses play in mitigating their environmental impact across their entire value chain.

  • Unlocking innovation in emissions reduction: Increased demand for carbon offsets will likely incentivize investment in various emissions reduction projects. These could include advancements in renewable energy technologies, sustainable agricultural practices, or improved energy efficiency throughout supply chains. With a larger market, companies developing these solutions can attract more significant investment, accelerating progress toward more cost-effective and efficient ways to reduce emissions globally.

  • Transparency and market transformation: The SBTI can establish clear criteria and robust verification processes for carbon offsets within their framework. This ensures the environmental integrity of the offsetting process and discourages companies from relying on unreliable or ineffective offsets. By setting higher standards, the SBTI has the potential to transform the entire carbon offset market towards more sustainable and impactful practices.

  • Empowering consumers and businesses: This policy creates a win-win scenario for businesses and consumers. Companies can confidently set ambitious climate goals encompassing their entire value chain, demonstrating leadership and commitment to sustainability. Consumers, empowered to make informed choices, can support brands that prioritize high-quality carbon offsets. This collective action can drive demand for sustainable products and services throughout the global marketplace.

Beyond tradition: streamlining permanence:

The SBTI policy shift is powerful, but climate action thrives on a collective symphony. Businesses have a pivotal role – adopting these new policies and prioritizing high-permanence offsets demonstrates leadership and paves the way for a more sustainable future. Here's how:

1. Confidence and risk mitigation: For companies grappling with Scope 3 emissions, the SBTI's new policy is a game-changer. However, concerns about permanence can linger with traditional offsets. By prioritizing high-permanence CDR credits like direct air capture and mineralization, the SBTI offers companies confidence and risk mitigation previously unavailable. Carbon removal technologies demonstrably remove and store carbon dioxide for millennia, minimizing the chance of future reversals. If able to confidently invest in offsets, companies can contribute to achieving net-zero goals, knowing their environmental impact is secure and long-lasting.

2. Fostering innovation and market efficiency: A streamlined system for high-permanence CDR credits incentivizes investment in these innovative technologies. As companies increasingly seek these credits, a robust market for high-permanence solutions is created. The market spurs investment in research and development, accelerating the advancement of CDR technologies and potentially leading to cost reductions over time. A competitive landscape fosters continuous improvement, with companies striving to offer the most efficient and cost-effective CDR solutions.

3. Environmental integrity and avoiding pitfalls: Streamlining the inclusion of CDR credits doesn't just boost confidence and ensures environmental integrity. The SBTI can work with stakeholders to establish rigorous criteria and verification processes for high-permanence projects. Such processes include methodologies for quantifying the amount of carbon removed, ensuring secure geological storage for captured CO2, and minimizing the risk of leakage or reversals. Furthermore, streamlining discourages companies from relying solely on lower-cost, impermanent offsets. This ensures that offsetting leads to long-term reductions in atmospheric carbon dioxide, maximizing the environmental benefits.

Innovation, collaboration, and a focus on high-permanence solutions are the key instruments in this symphony for change. The SBTI policy shift serves as the conductor, harmonizing these elements to accelerate progress toward a cleaner and more sustainable future. While challenges remain – like ensuring accessibility of high-permanence offsets for smaller companies and robust verification methods – this policy shift is a significant step in the right direction. It offers a powerful tool to tackle Scope 3 emissions, empowering businesses to address their environmental footprint and consumers to advocate for change through purchasing power. Together, we can transform this policy shift into a powerful movement, orchestrating a more sustainable future for all.

Future Thought Leaders is a democratic space presenting the thoughts and opinions of rising Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.

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About the author

Bashir Dan is the CEO of Stack Carbon, a carbon asset developer and management company.

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