SBTi removes 200+ companies from their net zero commitments

Sumday Team
March 18, 2024
5 Minutes
The Science Based Targets Initiative (SBTi) has recently updated the status of 239 companies on its target dashboard as "commitment removed". The list included industry giants like Microsoft, Procter & Gamble, Unilever, and Walmart.

What’s SBTi?

It’s a not for profit organisation that is a collaboration between CDP, the United Nations Global Compact, World Resources Institute (WRI), We Mean Business Coalition, and the World Wide Fund for Nature (WWF), that ‘approves’ emission reduction targets as being in line with climate science.

Learn more in What is ‘Net Zero’ and ‘SBTi’? 🎓

What’s happening?

The move came from SBTi’s policy that gave companies 24 months to submit science-based targets for validation once a "commitment" is made. The companies who had their commitments removed recently had until the end of January this year to meet that requirement for their previously declared net zero commitments. It’s not 100% clear whether they actively chose not to be involved with SBTi anymore or couldn’t back up their commitments with a credible target and a pathway to get there - not surprising.  

These companies, together with over 1,000 others, participated in the Business Ambition for 1.5°C (BA1.5°C) campaign, which was launched in 2019 with an aim to mobilise the private sector to set 1.5°C near term and/or net zero targets.

The SBTi also published its final evaluation report on the campaign this month. They surveyed 971 companies and found some of the barriers faced in setting credible net zero targets were:

  • Scope 3 being too much of a challenge (i.e. suppliers aren’t carbon accounting properly and sharing their data so it’s kinda made up)
  • Lack of available emissions data (same problem)
  • Weren’t sure if they could achieve net zero (obviously if you don’t have the former, how could a company be sure),
  • and some concerns about the risk of litigation if they failed to fulfil their promises (if we keep putting this target on all our marketing material and we have no real idea around the emissions making up 90% of our footprint, people might sue us!)

See graph below. The survey also revealed that 79% had joined the campaign to “showcase leadership in sustainability” (page 16).

Source: SBTI's Business Ambition for 1.5°C Campaign, page 18

The Big Scope 3 Obstacle

Scope 3 emissions, which often represents >80% of an organisation’s footprint, is the big challenge everyone is grappling with.

Just last week the 🇺🇸 US SEC adopted the long awaited Climate Disclosure Rules. Following endless legal threats around the SEC stepping outside its jurisdiction, the rules ended up pretty  watered down, especially when compared to the rest of the mandatory reporting landscape. Disclosure over Scope 3 emissions was omitted. The passing of these rules are still considered significant and won’t stop the pressure on businesses to understand and report on their Scope 3 emissions.

🎓 Have a read of our key takeaways in A summary: SEC Climate Rules

We’ve got some ideas on how to approach this big challenge 💡

For anyone to reach net zero, we have to address the Scope 3 challenge - which requires every business in the value chain to measure and understand their emissions data to start with.

That is a big ask. But we believe it’s doable 💪🏻

Every organisation, especially those 79% who want to showcase leadership in sustainability, needs to ask, but also support, their suppliers on this journey to measure and understand their emissions. It doesn’t have to be an overwhelming and highly expensive exercise to do this, that’s where normal accountants can come in!

Walmart was in the news recently for their supply chain cutting ‘1 billion tons of emissions 6 years ahead of schedule’ saying it has engaged, motivated, and supported 6000+ suppliers to report and reduce their emissions. But… they still haven’t managed to collect reliable data such that their own scope 3 emissions are based on information from suppliers rather than US EPA averages. The accounting still isn’t embedded. And their SBTi commitment has been removed… Missed our Accounting Nerd Download? Catch up here 🎓

We reckon the key to engaging with suppliers and bringing them on board this journey, really relies on affordable and accessible education and support.

Reach out for a chat with us on how you can start your supply chain engagement project. We’re working hard on some exciting releases to solve this challenge, stay tuned ✨

What other learnings can we take from this?

It’s easy to point the finger and scream SHAME! But we don’t take these headlines as reasons for naming and shaming, or spur greenhushing. This is a new space that is constantly evolving - we’ve got to get the fundamentals of accounting and transparency right. These findings and learnings are reasons for regulation, standard setters, and businesses to keep improving the way we do things as we run towards collective goals. 

SBTi has acknowledged their communication and delay in launching the Corporate Net-Zero Standard has caused confusion, resulting in some companies claiming they did not fully understand what their commitments required. They will be taking the learnings from the campaign evaluation report to develop the next version of its Corporate Net Zero Standard. 

SBTi has also said, that regardless of removal, all "companies are welcome and encouraged to submit targets at any time”. All four aforementioned corporations, Microsoft, Procter & Gamble, Unilever, and Walmart, responded in this GreenBiz article that they are working with SBTi and remain committed to achieving their ambitious emission reduction goals.

Lastly, SBTi signs off on their report with a good reminder,

“Reaching net-zero will require collaborative efforts to transform the global economy, transcending company boundaries, sectors and supply chains - it will affect all companies and all people… The completion of the Business Ambition for 1.5°C campaign is by no means the completion of the movement for a 1.5°C aligned future - rather it is just the beginning. A net-zero future is a multigenerational effort to secure lives and livelihoods, the legacy for which we are building the foundations today. We call on all companies to take science based climate action, including by accelerating the adoption of the SBTi standards without delay, to join the shift towards net-zero for people and planet.”

So, adopt the SBTi Standards, or don’t adopt the standards… get an SBTi approved target, or set a solid target you’re actually committing resources towards achieving and credibly track your progress - whatever you do, just keep at it. 

Keen to learn or chat more on this? Just reach out for a chat