One of the world’s leading climate labels is planning to relax its own standards following heavy corporate lobbying – against scientific advice, and prompting outrage amongst its own staff.

The Science Based Target initiative (SBTi) was founded in 2015 to verify companies' climate targets based on scientific knowledge.

It was set up by several non-profits in the wake of the Paris climate conference, during which world leaders agreed to limit global warming to 2 degrees celsius.

“We were building the plane while we were flying with it.”

Governments like the United Kingdom and Norway, for example, praise SBTi, and thousands of companies, like food giant Kellogg’s, signed up. More than 8,500 companies have voluntarily joined the label by now, including pharmaceutical company Pfizer, clothing company Adidas, beer brewer Heineken and soft drink producer Coca-Cola. 

SBTi's growth was so rapid that the organisation itself could barely keep up. “We were building the plane while we were flying with it,” said one of the people involved in the early years of SBTi. 

But the organisation now seems to be bowing to corporate pressure to weaken its standards, a Follow the Money investigation shows. 

Follow the Money spoke extensively with ten SBTi-advisors, -employees and those closely involved in the field. FTM reporters read dozens of public statements on social media, news and other websites, as well as public and internal documents from SBTi-employees and -advisors.

Not just on paper

Companies are not legally required to have their climate targets verified by SBTi. Instead, they can voluntarily sign up for it to demonstrate to customers and investors that they take climate concerns seriously. 

To achieve the goals they set themselves, such as achieving “net-zero” emissions – emitting as much greenhouse gases as are being recovered – companies have to set strict intermediate targets with SBTi. 

When SBTi was founded, one of its key ideas was that companies are not allowed to use so-called carbon credits when trying to achieve their targets.

Companies can compensate for some of their emissions by buying credits for certain programmes that aim to capture CO₂ elsewhere in the world. For example, they can buy carbon credits for a programme that plants (or saves) trees in Zimbabwe. But as scientists agree that climate change is primarily caused by emissions from human activities, this means that global emissions have to be slashed rather than being compensated for by investing in projects that capture emissions somewhere else.

Since it was set up, SBTi barred the companies that commit to Science Based Targets from using such carbon credit schemes – but that might soon change.

While SBTi rejected carbon credits, demand for the scheme exploded after the Paris Agreement: the carbon credit market increased sixfold between 2019 and 2021, reaching an annual value of 2 billion dollars; companies not affiliated with the label could take advantage of the credits.

Around that time, SBTi moved from rejecting carbon credits in their entirety to allowing carbon credits in exceptional circumstances, with a maximum of 10 per cent of total emissions. 

“That was a compromise,” said Stephan Singer, who at the time was a member of an expert advisory group for SBTi and has become a senior advisor to the Climate Action Network since. “We could accept that as NGOs.”

SBTi under pressure

All that changed in 2023, when the price of carbon credits plunged following a host of market scandals. 

In search of a way to revitalise the market, lobbyists ramped up pressure on SBTi to soften its stance on the credits. 

Former UN Climate Change High-Level Champion and former executive board member of SBTi Nigel Topping, for example, has been pushing for SBTi to allow companies to use the scheme.

In an email obtained by FTM, Topping in 2023 told people he considered interested in the subject that he is “working with a growing group of market actors frustrated at campaigns which are suppressing demand for VCM [Voluntary Carbon Market, the carbon credit market]”.

That same year, he tried to launch a lobbying campaign to put carbon credits in a good light, as shown by a draft document for the campaign, first reported on by the Financial Times and seen by FTM. 

Topping has an economic interest in carbon credits: he is the director of ICE Benchmark  Administration, which provides data to companies in the carbon credit market. Last year, his company made 16 million dollars in profit.

In the draft document, he writes that he wants to “commission or coordinate” pieces of investigative journalism to – among other things – uncover ideological positions of the authors of the “recurring academic and journalistic attacks on the Voluntary Carbon Market”. His idea for a campaign also targeted SBTi.   

“The SBTi standard is seen as the gold standard. That means this dodgy market can grow enormously if you allow these products to flow into the market.” 

Topping did not respond to requests for comment. But in April, he told the Financial Times that the campaign was never officially created following the proposal.

In his outline for the lobbying campaign, Topping mentions environmental charity High Tide Foundation as a possible supporter. The organisation’s executive director, Alexia Kelly, fiercely defended carbon credits during debates at SBTi, several SBTi employees told FTM. 

In 2021, Kelly was on an expert advisory group at SBTi. She had drafted a strategy that included the use of carbon credits for Netflix, and wanted SBTi to approve Netflix's climate goals with those credits.

Supporters of carbon credits stepped up the pressure on SBTi in March 2024, when players in the carbon credits market came to London for a two-day meeting. Those advocates pressured SBTi representatives present to tone down their stance on using carbon credits for climate goals, according to news outlet Bloomberg. 

The meeting was organised by the Bezos Earth Fund – a proponent of carbon credits. For example, it invested 25 million dollars in a project to “build consensus” on the use of carbon credits in 2020, and 11 million dollars in 2022 for two initiatives to better monitor the integrity of carbon credits – and thus move the market forward.

Jeff Bezos’ philanthropic fund is a major backer of SBTi and also gives money to the organisations that founded it. 

A huge business opportunity

One month later, in April 2024, SBTi employees were taken by surprise: 

SBTi's board and CEO published a statement saying that companies in the future could use offsetting measures such as carbon credits to offset CO₂ emissions in their production chain.

“SBTi has decided to extend [the use of these offsets] … beyond the current limits,” the statement read. 

This would apply, according to the statement, for the reduction of part of the carbon emissions throughout the life cycle of all products that the company buys, manufactures, or sells.

Led by the nine-member board, most of whom hadn’t taken office until 2023, this was a striking U-turn of the company’s policy on carbon credits.

This didn’t go down well with everyone. 

Stephan Singer, senior advisor at the Climate Action Network, resigned as a member of SBTi’s technical advisory group directly after the board's statement was published, he told Follow the Money. 

“CO₂ credits are a hoax,” he said. “The SBTi standard is seen as the gold standard, supposedly the best in the world. That means this dodgy market [of carbon credits] can grow enormously if you allow these products to flow into the market. I can't stomach that.”

An internal statement from some 50 SBTi staff members of the technical and scientific advisory groups, seen by FTM, was sent to the board shortly after the statement, calling for it to be withdrawn immediately. 

The decision “is premature”, the employees write, and not supported by a recommendation from the technical or the scientific advisory group. 

The new board members, who were installed following a restructuring of the organisation in 2023, include influential members from the business community, as well as former president of Colombia Iván Duque.

Several board members didn’t respond to requests for comment. 

But board member Maria Mendiluce, CEO of the business-driven non-profit We Mean Business Coalition, believes SBTi is “on the right side of climate history” with its decision on offsetting emissions, she said in an opinion piece published by news outlet Reuters. 

She argued that companies were hampered by ambiguity about what tools they can and cannot use now to meet those goals. For example, companies were eager to invest in sustainable aviation fuel, but wanted to make sure that SBTi recognised those investments – including in carbon offsets – as climate action, she said. 

Investors and developers of carbon credit projects echoed her assessment. 

“Great news for the entire carbon credit market!” one investor posted on LinkedIn. 

“If companies are allowed to use carbon credits for part of their emissions targets, there will be over 20 percent more SBTi targets set [by companies],” posted another.

Whether the decision will become reality, however, remains to be seen. 

“Great news for the entire carbon credit market!”

According to the company's internal rules, the organisation shouldn’t make decisions without input from the technical council, one of SBTi's main governing bodies since 2021, among others.

But in this case, this didn’t happen.

“It came out of the blue for everyone,” said Doreen Stabinsky, member of the technical council and professor of global environmental policy. 

Stabinsky said she is indignant that the council did not even see the board's decision before publication. “Some of us on the technical council are not gonna take this sitting down,” she said. 

Stabinsky also questioned the timing of the decision: SBTi staff are still studying the effectiveness of offsets such as carbon credits. Its results have not yet been processed, but the evidence shows “wide variation in quality and scientific rigour,” SBTi staff said in a public reaction to the board’s announcement.

SBTi rates the compensation measures as “largely ineffective”, according to a confidential draft seen by Reuters.

Following the backlash, SBTi distanced itself from its previous statement. 

Even though the SBTi's board said in their statement that it “has decided” in their statement, the SBTi board regrets that their statement has been “misinterpreted” as a final decision, and will come up with more clarification in July, it writes on its website. 

“No standards have been adjusted yet,” the organisation told FTM. “To suggest otherwise is simply wrong.”