The world is vastly off track for meeting essential climate goals, and in a worrying and unexpected plot twist, climate advocates are now careening toward a terrible mistake that could set back climate action by decades.
Of course companies should deliver steep emission reductions in their own operations and supply chains, but to further raise money for climate action in developing nations, companies should also be allowed to count credits toward a portion of their net-zero targets. Currently, these credits cannot be counted toward the targets, including in the newly signed bill in California requiring the emissions reporting of companies operating in the state.
SBTi appears to believe that companies should and will invest in the VCM at scale simply because those companies will be able to show they are contributing to global climate action, even if such contributions do not apply to their own net-zero targets. That is naïve. Appeals for corporate philanthropy will not mobilize the trillions needed for developing nations to decarbonize.
Why? Even voluntary net-zero commitments require companies to create greenhouse gas CL00, -2.67% inventories, set targets, decarbonize their operations and comply with stringent audit and disclosure requirements. In some cases, these companies need access to credits to help meet their targets because internal decarbonization plans have fallen short for any number of legitimate reasons . These are the first movers, and they should be applauded, not punished.