The SBTi consultation that is currently live is of real significance. We at Pinwheel are calling on as many companies and organisations to response as possible. The consultation ends on the 30th of July.
Globally, we need to generate trillions of dollars of climate and biodiversity finance every single year up to 2050. That comes at a time when most Western governments are significantly fiscally constrained. As are members of the public. It is essential, therefore, that corporate finance flows into climate and biodiversity projects. In that context, the SBTi recently launched its consultation on Beyond Value Chain Mitigation (BVCM).
This consultation matters. SBTI has become the leading standards body when it comes to corporate sustainability. If their BVCM standards create the right conditions for companies to make significant levels of funding available for these projects, it will make a big difference to our collective climate and planetary goals.
It vital that as many organisations as possible respond. Here are the key points that Pinwheel has made in response to the consultation and our reflections on what it all means…
The key themes to our response are that:
SBTi should make sure its guidance makes clear that companies should fund projects outside of their value chain and that it is not merely as a ‘nice to have’ in addition to reducing emissions inside their value chain;
SBTI should make it clear that contribution approaches are a best practice approach. That is, companies should focus on making the biggest impact, rather than focussing on making claims; and,
companies are strongly urged to fund a broad portfolio of projects encompassing climate and biodiversity, as well as a waste and policy campaigns.
This reflects our overall thinking that we need SBTi to be as brave as possible. There is a huge amount to like about their consultation document. It sets out a range of approaches, with the increasingly discredited, traditional ton-for-ton offset approach being only one of them. It sets out money-for-money and ton-for-money approaches that are in line with the contribution approach we recommend as best practice.
However, several of the points in the document and proposals being consulted on risk taking too much of the methodology as in-value-chain mitigation, and this risks being too restrictive as a result. We need SBTi’s guidance to focus as much as possible on enabling companies to fund high potential and underfunded areas, where an outsized impact can be had, rather than seeking to limit companies to only verified credits as a solution. As Gold Standard has said, credits can be part of the solution – a useful tool - but they are not the whole solution.
The consultation also helpfully sets out a range of potential types of activity to fund, from novel carbon removal projects to policy campaigns, and highlights the importance of companies pooling their impact by working in partnership and coalitions. SBTI’s six key principles to identifying where to invest reflect Pinwheel’s approach to project portfolio management and are a good way for companies to think about project selection: (a) scale (b) urgency (c) transformation (d) financing need (e) co-benefits (f) climate justice.
The emergence of the high-impact contribution approach creates a real prospect of putting corporate action at the heart of climate mitigation and biodiversity restoration. We need SBTi to be brave and set clear expectations so that we can grasp this opportunity.
If you or your organisation is interested in responding to the SBTi consultation and would welcome a discussion with our impact team, please contact us at contact@pinwheel.co.uk
