Statement from the SBTi Board of Trustees on use of environmental attribute certificates, including but not limited to voluntary carbon markets, for abatement purposes limited to scope 3

In January 2024 the SBTi announced that work to revise its flagship Corporate Net-Zero Standard was a priority for 2024, and that this revision would include additional guidance on tackling scope 3 emissions.

SBTi has carried out a wide consultative effort on this subject in the past six months and reported to the Board a summary of the call for evidence survey results.

While recognizing that there is an ongoing healthy debate on the subject matter, SBTi recognizes that, when properly supported by policies, standards and procedures based on scientific evidence, the use of environmental attribute certificates for abatement purposes on Scope 3 emissions could function as an additional tool to tackle climate change.

Consequently, SBTi has decided to extend their use for the purpose of abatement of Scope 3 related emissions beyond the current limits.

This will entail the definition by SBTi of specific guardrails and thresholds as well as the rules to be applied for these certificates to be considered valid for Scope 3 emissions abatement purposes respecting the principles of mitigation hierarchy.

Considering the scope and the complexity of this topic, the SBTi will consult and strive to reach the necessary cooperation agreements with other relevant initiatives as well as a broader set of stakeholders on the revision of the scope 3 framework, including the responsible use of environmental attribute certificates in target setting.

SBTi will not embark in validating carbon credits quality. Other entities are better positioned to deal with this activity. SBTi will enable all validating entities to have clear access and complete understanding of the demand side guardrails and rules established by SBTi for this purpose.

SBTi considers this step a way to accelerate the decarbonization of value chains with compensation logic while companies make their way to eliminate carbon emissions at the root through innovation and technology improvements.

As part of the Standard revision process, and following consultations with all the relevant stakeholders, a first draft of basic rules, thresholds, and guardrails for the potential use of environmental attribute certificates for abatement purposes of Scope 3 emissions will be issued by SBTi by July 2024.

Clarification statement to the SBTi Board of Trustees Statement on use of environmental attribute certificates, including but not limited to voluntary carbon markets, for abatement purpose limited to scope 3 - April 12 2024

No change has been made to SBTi current standards.

Any use of EACs for Scope 3 will be informed by evidence. Any change to SBTi standards, including use of EACs for Scope 3, will be conducted according to previously approved SBTi Standard Operating Procedure for developing standards, including:

• Research
• Drafting
• Public consultation
• Technical council review and approval
• Consideration and adoption by the SBTi board.

In July, a discussion paper with a draft proposal from SBTi about potential changes to Scope 3 will be published which will feed into the standard draft (drafting phase).