Business Express is an online portal that covers the latest developments in the world of business and finance. From startups and entrepreneurship to mergers and acquisitions, Business Express provides reporting on the stories that matter most to business leaders and decision-makers.The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.
2024 04 10T135744Z 2 LYNXNPEK390NE RTROPTP 4 CLIMATE CHANGE COMPANIES TARGETS - Business Express

Companies get green light to use offsets for supply chain emissions


Companies get green light to use offsets for supply chain emissions

By Simon Jessop

LONDON (Reuters) -A leading judge of corporate climate action plans said it will allow companies to use carbon credits to offset their supply chain pollution, a win for the growing offsets market despite criticism the move could see emissions rise.

Selling credits from wind farms and other activities to a company so it can offset pollution is seen as a way to help move money to climate-friendly projects, although some are concerned it could lead to companies carrying on business as usual.

Late Tuesday, the non-profit Science-based Targets initiative (SBTi), seen as the gold standard arbiter of company plans, said it would allow the so-called Scope 3 emissions to be offset subject to as yet undefined “guardrails and thresholds”.

SBTi had previously not allowed offsets in case it dissuaded boards from actually cutting emissions, but many have struggled to align their plans with the world’s climate goal amid weak government action, still nascent technical fixes and high costs.

By allowing companies to use offsets, it is hoped they will be able to secure market and investor support for more ambitious action, helping reduce their cost of capital and driving more money into climate-friendly projects.

Over time, as the policy and technical hurdles dissipate, the hope is the offsets are not needed, or can at least be reduced.

“The voice of business on this issue is clear,” said María Mendiluce, chief executive of the We Mean Business Coalition and a board trustee of SBTi, which by end-2022 had validated 2,079 company targets. A further 2,151 had committed to set targets.

“Companies value SBTi and are committed to delivering on their emissions reductions targets, but need greater clarity and flexibility in how to navigate Scope 3 emissions. This change empowers companies to bring more innovation and investment into cutting emissions from their value chains.”

Don't miss out on any breaking news or insightful opinions!
Subscribe to our free newsletter and stay updated on the go!


By submitting this form, you are consenting to receive marketing emails from: Global Banking & Finance Review. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email.

The move drew sharp criticism from non-profit Carbon Market Watch, however, which called it “a blow to the SBTI’s credibility” adding “targets cannot be science-based if they are not associated with deep internal emission reductions”.

A source with direct knowledge of the matter said that, given the way emissions are calculated, for some companies it could even result in zero emissions reductions by 2035.

SBTi said it acknowledged the complexity of the issue and would “consult and strive to reach the necessary cooperation agreements with other relevant initiatives as well as a broader set of stakeholders”.

The decision by SBTi brings it into line with a move by the Voluntary Carbon Markets Initiative to expand the use of high-quality carbon credits, and carbon trading association IETA, which plans to launch new guidelines on quality credits.

It follows a slide in demand for credits from companies during 2023 – down 6% in the first half, data from BloombergNEF showed – after several cut credit purchases amid concern about the quality of certain projects.

Worth around $2 billion in 2021, the market could pass $50 billion by 2030, Boston Consulting Group has said.

Teresa Hartmann, chief ratings officer at BeZero Carbon, which rates carbon credits, said SBTi’s move was “a significant step forward in scaling carbon markets and climate action… within the critical next decade”.

(Editing by Mark Potter)

Recent Post: