Climate group SBTi proposes new rules, holds line on carbon offsets

By Virginia Furness and Simon Jessop

LONDON (Reuters) - A leading assessor of company climate goals on Tuesday proposed new rules to better help companies set high-quality emissions-reduction plans, but said it had no plans to further loosen its rules around the use of carbon credits.

The Science-Based Targets initiative was last year at the centre of a row over the issue, with opponents saying its stance was holding back billions of dollars of investment in projects that remove and store carbon.

The latest proposal maintains an ability for companies to offset their 'residual' emissions, the small slice left after the company has made best efforts to cut them, but stops short of endorsing their more widespread use. 

It does, however, encourage companies to buy carbon credits not directly linked to their supply chains to contribute to broader climate efforts.

Supporters of carbon credits argue they are essential to fund projects like tree-planting that lock emissions away, while critics say the impact of the projects is difficult to measure and in many cases inaccurate, meaning some do not deliver the environmental benefits they claim.

Other proposed changes include new options for tackling Scope 3, or supply chain, emissions by allowing companies to factor in their procurement strategy; by focusing on the most carbon-intensive activities; and by making targets optional for smaller companies.

The changes by the SBTi come amid signs of waning climate ambition from many companies, led by those in the United States, where businesses are facing political and legal pressure to drop climate-friendly policies and activities.

SBTi, though, said it has seen exceptional growth in the number of companies setting science-based targets and the proposed rule changes would help more smaller companies and those from emerging markets join the nearly half of organisations listed on G7 stock markets that had their targets validated by the end of 2024.

(Reporting by Virginia Furness. Editing by Mark Potter)