Businesses have gotten the go-ahead by the nonprofit Science-based Targets initiative (SBTi), a leading judge of corporate climate action plans, to use carbon credits to offset supply chain pollution. Although the growing offsets market is cheering the decision, there’s also criticism that it could cause a rise in emissions.
Companies fund emission-reducing projects outside of the business by purchasing credits from windmills and other activities, which then offsets the emissions they don’t reduce from their own activities. It’s often seen as a way to provide money for climate-friendly initiatives, but there’s concern that businesses won’t make any moves to reduce their own supply chain pollution.
SBTi, which previously did not permit offsets in an effort to ward off boards from avoiding cutting emissions, said it would approve Scope 3 emissions to be offset, though it would be subject to “guardrails and thresholds” yet to be defined. The nonprofit’s aim is to gain support from investors and the overall market for more aggressive action.
The nonprofit Carbon Market Watch denounced the decision, saying it was “a blow to the SBTi’s credibility” and that “targets cannot be science-based if they aer not associated with deep internal emission reductions.”
