COP26 is just around the corner, the Science Based Targets initiative (SBTi), an NGO-led initiative which recruits companies to set greenhouse gas (GHG) reduction targets in line with the Paris Agreement is playing a growing role in the corporate fight against climate change. Companies turn to SBTi to show they are serious when it comes to climate change. In fact, since its inception in 2015, SBTi has grown to amass the support of over 2000 companies.
One of the four key discussion points of the conference will be to accelerate the collaboration between government, businesses, and civil society. The result of which will see governments around the world pile on the pressure for companies to act on climate change.
Make no mistake, although SBTi is one of the key drivers of climate action, the organisation needs to do more to combat greenwashing and penalize companies that fail to deliver on their climate commitments.
Slipping through the SBTi net
Greenwashing – the process of conveying a false impression about how environmentally sound a company’s products or services are – has become one of the most used buzzwords of this century. Companies spend millions on their marketing strategies to give the false impression that they are taking meaningful action on climate change. Initiatives, like SBTi are viewed as the silver bullet in combatting greenwashing.
According to SBTi, after sending a commitment letter, companies have 24 months to submit their target, and have it validated as ‘science based’ and published by the SBTi. The NGO also requires that companies’ targets must be reviewed, and if necessary, recalculated and revalidated, at a minimum every five years. However, some companies are slipping through the net and not setting targets within the allocated timeframe after committing – inadvertently allowing greenwashing to happen right under their noses.
According to their data, of the 87 companies that joined the SBTi in 2018, 24 have yet to have targets validated, meaning they have failed to meet the two-year deadline. While it was quietly announced that SBTi had kicked 119 companies from the program for failing to set targets, there are currently 51 companies still in the program that fall outside of the two-year grace period that are yet to set a target.
Inaction is not sufficiently penalized
And this needs to change. SBTi is managing the delicate balance between holding companies accountable to their commitments and making the process attractive to new signatories, which is not an easy task. With SBTi welcoming 1140 new companies in 2021 so far, it has a responsibility to call out those dragging their feet when it comes to target setting.
With the backing of two of the world’s largest asset managers BlackRock and Vanguard, SBTi should have the confidence to take a tougher stance to call out companies that fail to deliver on their climate promises.