The Science Based Targets initiative (SBTi) has recently announced revisions to its Net Zero guidance, prompting companies to reassess their climate strategies. At Planet FWD, we're hearing from customers who are working to understand and adapt to these changes. This latest update, following modifications to FLAG guidance and coming just two years after the original Net Zero standard publication, has sustainability professionals carefully considering the implications for their long-term climate goals.

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Our customers are expressing a mix of reactions. While many appreciate SBTi's efforts to refine standards based on the latest climate science, there's also concern about the frequency of these updates. Companies that have already revised their net zero targets are now evaluating how to balance the need for current, science-aligned goals with the practical challenges of implementation and reporting.

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As we explore the details of SBTi's latest guidance, it's important to consider not just the changes themselves, but how they fit into the broader context of corporate climate action. Let's examine the key elements of this update and what it means for businesses committed to meaningful climate initiatives.

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Expert Insight: Planet FWD's Perspective

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To provide further context on these developments, we turn to Charlie Quann, Head of Corporate Reporting and Decarbonization at Planet FWD. With a decade of experience guiding companies through their decarbonization journeys, Charlie offers valuable insights into the implications of SBTi's latest guidance.

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The Net Zero Guidance Overhaul: What's on the Table

Based on the latest information from SBTi, here are some key points about the upcoming guidance:

• Scope 3 Focus: SBTi is exploring new frameworks to encourage companies to focus on critical emission sources through transition-specific alignment targets.
• Carbon Credits: The use of carbon credits is still being evaluated, after a controversial statement from the SBTi’s Board in April 2024 sparked an intense debate over the possibility of offsetting for corporate climate targets.
• Alignment Targets: Companies may need to set specific 'alignment targets' and 'policies' for prioritized emission sources and transitions, alongside or instead of aggregated interim GHG emission reduction targets.
• Timeline: SBTi expects to release a draft of the revised Corporate Net-Zero Standard for public consultation by the end of 2024, with the final version coming into effect in 2025.
• Stakeholder Engagement: SBTi is actively seeking feedback from stakeholders throughout the revision process, including a public consultation period of at least 60 days.

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Frequent Changes: A Double-Edged Sword

While these frequent updates demonstrate SBTi's commitment to aligning with the latest climate science, they're causing concern among companies. Many organizations find themselves repeatedly revising their net zero targets to keep up with the evolving criteria.

This rapid pace of change raises a valid question: Should companies wait for the dust to settle before fully committing to SBTi's Net Zero guidance? While staying current is crucial, the frequent revisions risk diverting resources from actual decarbonization efforts to compliance activities.

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The Urgency of Climate Action

These changes come at a critical time when immediate climate action is paramount. There's a risk that the focus on updating targets and complying with new criteria could detract from implementing real decarbonization measures. It's essential to remember that while robust targets are important, they shouldn't overshadow or delay tangible actions to reduce emissions.

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The Role of Environmental Attribute Certificates

Interestingly, the SBTi's revision maintains a focus on environmental attribute certificates, despite their own data suggesting that carbon credits may not be the most effective strategy for corporate decarbonization. This approach raises questions about the most efficient pathways to achieve meaningful emissions reductions.

However, it's crucial to recognize the value of nature-based solutions and the ecosystem services they provide in the fight against climate change. Moreover, carbon offsets can serve as a valuable price signal, encouraging business units to decarbonize their operations by internalizing the cost of carbon.

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H&M Takes a Stand: A Call for Stronger Climate Action

In a bold move that has sent ripples through the corporate sustainability world, H&M Group has publicly challenged the Science Based Targets initiative's recent stance on carbon offsetting. In a letter to SBTi's Board of Trustees, H&M's Head of Sustainability, Leyla Ertur, expressed deep concern over the potential use of environmental attribute certificates for abatement purposes in Scope 3 emissions.

H&M's main arguments include:

1. Weakening Climate Pledges: The decision could make real decarbonization efforts within value chains less attractive, potentially deterring crucial investments and innovation.
2. Undermining Scientific Foundations: Moving away from robust, science-based standards could compromise the principles fundamental to real climate action.
3. Missed Opportunities: While criticizing the current approach, H&M suggests that there's potential for "robust market-based mechanisms within corporate value chains" that could accelerate actual decarbonization.

This public stance by a major global retailer highlights the growing tension between the need for flexibility in achieving climate targets and the imperative for genuine, science-based action within corporate value chains.

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Looking Ahead: Your Voice Matters

As the SBTi opens its new guidance for public comment, it's an opportunity for businesses to shape the future of corporate climate action. Planet FWD will be responding to this call for input, and we encourage you to share your thoughts and experiences.

Whether you're grappling with the challenges of frequent target revisions or have insights on effective decarbonization strategies, your perspective is valuable. By collectively engaging in this dialogue, we can help ensure that future guidance strikes the right balance between scientific rigor and practical implementation.

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Take Action

1. Share your thoughts: Reach out to us or comment on this post with your perspectives on the SBTi changes.
2. Stay informed: Subscribe to our newsletter or follow us on LinkedIn for updates on this topic and other sustainability news.
3. Prepare for change: Start considering how these updates might affect your company's climate strategy and be ready to adapt.

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