Maintaining Integrity for Scope 3 Targets

The Use of Environmental Attribute Certificates: Science Based Targets Initiative (SBTi) Statement

On Tuesday April 9th, 2024, the Board of Trustees for the SBTi released a statement supporting the use of environmental attribute certificates. The statement includes the use of voluntary carbon markets to address Scope 3 emissions targets. 

This announcement has sent shockwaves through the carbon finance industry, with reactions ranging from applause to condemnation.

While many have applauded the announcement—they argue that without the use of environmental attribute certificates, many corporations will not be able to attain their 2030 SBTi Targets. Meanwhile, key thought leaders have remarked that the inclusion of carbon credits to attain Scope 3 Targets would materially degrade the integrity of the SBTs, putting the momentum toward a true mitigation hierarchy at risk.

Needless to say, the limited information from the announcement has left its consequences wide open for interpretation and scenario-building.

Maintaining Integrity While Accepting Carbon Credits in Scope 3 Emissions Targets

Since 2008, PUR has worked directly with companies to engage in carbon action directly within supply chains at our core, our goal is to help companies with material scope 3 targets to implement actions direction within source communities and supply sheds.

With all this in mind, we at PUR would like to take this opportunity to highlight what we believe could be a constructive pathway forward. The following three elements, as identified by the Voluntary Carbon Market Integrity Initiative are necessary to maintain the integrity of the SBTs and leverage the mitigation hierarchy, while accommodating short-term use of environmental attribute certificates.

1. An approved SBT Target that covers Scope 1, 2 and 3, with clearly demonstrated progress toward such targets;
2. A limitation on the use of credits to 50% of the company’s annual Scope 3 emissions in the year the claim is made;
3. Sunsetting the use of credits where the use of credits must decline year over year and last no longer than 10 years.

Additionally, we recommend:

1. That any ‘environmental attributes certificates’ should be third-party certified, in line with either GHG Protocol or ICVCM requirements;
2. The use of credits should be limited to industries with significant reduction (>40%) of emissions resulting from FLAG activities.

Why PUR Believes this Could be a Constructive Model if Environmental Attribute Credits are Allowed

For companies in the food and beverage, fashion, cosmetics and pharmaceutical industries to attain Scope 3 Targets by 2030, the use of carbon credits may be required. As ~50% of Scope 3 targets in these industries are expected to come from supply chain-linked, nature-based removals; if those investments have not yet resulted in field activities—it is likely they will not alone fulfill annual carbon targets until after 2030, and closer to 2035.

Sustainability Directors face a dilemma:

1. Maintain SBTs that they know are unattainable due to the timeline of carbon delivery constraints from any new and current investments, or
2. Abandon their SBTs.

With the right safeguards, and an appropriate sunset period, providing flexibility for the use of carbon credits, on a limited basis, for a period of 10 years would allow companies to:

1. Maintain their 2030 targets,
2. Drive investment for real near-term carbon interventions in the form of carbon credits;
3. While additionally requiring companies to make material and near-term investments in supply chain-linked assets for carbon delivery ramping up at the time of the credit-use sunset.

It is an intelligent and appropriate solution to a difficult problem.