Chris Hocknell is the director of London-based sustainability consultancy Eight Versa.
Tech giant Intel said in its 2023 Climate Transition Action Plan that it faces challenges in setting targets for cutting its greenhouse gas emissions in line with the Science Based Targets Initiative (SBTi). The chip-maker is likely to be the first in a long list of companies to slowly break cover and admit that the SBTi is unfit for purpose.
As a professional sustainability advisor, I know that of the 5,000 or so companies that have signed up for the initiative, only a startling minority have robust and realistic plans for fulfilling their emissions-cutting commitments.
These ambitious yet under-interrogated targets are really just counterproductive “green-wishing”. When it comes to emission reductions, a bird in the hand is worth two in the bush. In other words, the perfect often becomes the enemy of the good.
The SBTi has been endorsed by the United Nations as a global decarbonisation framework. It requires companies to commit to an ‘absolute contraction’ of Scope 1 and 2 emissions of 90%, and for some organisations to make cuts to their Scope 3 emissions as well, by no later than 2050. Absolute contraction is essentially a carbon budget, set from year one.
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We must first consider the implications that SBTi has for climate innovation and a company’s business model. Here we run into a major obstacle because currently, SBTi does not take into account abated emissions – the environmental benefit that technology provides.
Take Tesla. Tesla’s plan to scale production could never be SBTi-aligned But according to the EV maker’s impact report, the company helped to abate 2.3 million metric tons of CO2 in 2022, which is more than the entire CO2 emissions of Malta.
Oxford PV is another example. It has succeeded in developing a breakthrough clean technology that makes solar photovoltaic panels 30% more efficient than average panels. Yet, despite the huge emission abatement potential of this technology, there’s no feasible way the company could scale, while being SBTi-aligned on its own emissions.
This points to a fundamental issue with the current limited and simplistic ‘territorial’ approach to carbon accounting. Instead, we must embrace more comprehensive strategies that can achieve meaningful and lasting reductions in carbon emissions.
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Can SBTi, dreamt up in air-conditioned offices in the West, really tell innovative companies in emerging economies that they must make drastic emission cuts in their operations? For example, it would not be possible for South African clean energy start-up BioTherm Energy, or Nigerian solar company Lumos, to slash their emissions by 90%, all while delivering cleaner energy and pulling in tax revenue for their developing economies. After all, sea walls, flood barriers and drought-resistant crops need to be financed somehow.
The idea that we can contract our emissions with the technologies available today, by 90%, without triggering large-scale human and economic upheaval is a view rooted in dogma, not science or economics.
Anybody who has made New Year’s resolutions will know that a crash-diet that cuts your calorie intake by 90% is a pipe dream, especially if we don’t count calories burned. Instead, a gradual downsizing of snacking, along with a feasible, sustained increase in the intensity of exercise is far more likely to deliver the results you want.
Beyond the ‘green-wishing’, the SBTi’s design is fundamentally flawed because it allows businesses with over 250 employees to reduce their Scope 3 emissions on an intensity metrics basis (reduced energy per unit of production), but not smaller firms. For example, for an air travel company, this could be energy used per flight, or for a garment manufacturer, energy used per item of clothing produced.
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SMEs make up 99% of businesses. To subject smaller, less well-resourced companies to a more stringent emissions-reduction requirement than larger firms seems bizarre.
So what’s the alternative? Every company should use an intensity metrics measurement, and set a transparent emissions target that is relative to an economic or operational variable, like emissions per unit of goods sold.
We know we need to carry on eating healthily – we now need to learn what exercise regime works best for us. Ultimately, we should be sceptical of any one-size-fits all plan pushed by those with no skin in the game.
An ‘intensity metrics’ basis for emissions reductions provides us with a far more attainable and universal decarbonisation framework. The need for a fair global system is clear. The SBTi, with its unrealistic and reductive approach, is simply not it.
This article argues that the SBTI’s rules are too stringent. We have also published a comment piece arguing they are too lax.