To read the full comments submitted on February 18, 2022, please download a copy of the comments here.
(SBTi asks for comments to improve the clarity and usability of the FLAG company wide and commodity specific standards for end-users)
p. 1, lines 25-26: “This document describes the SBTi FLAG criteria and recommendations for FLAG target setting. It also provides detailed guidance on the use of the FLAG tool.”
Comment: There is no doubt that corporations need common metrics and criteria to help them reduce their greenhouse gas emissions. According to a global survey of companies commissioned by an artificial intelligence company that is marketing AI mitigation tools, “only 11% have cut their emissions in line with their ambitions over the past five years.” (https://www.bcg.com/publications/2021/measuring-emissions-accurately) Nevertheless, despite the careful process by which SBTi has developed the FLAG tool and provided guidance for its use, SBTi is nevertheless accused of a conflict of interest, characterized as being the “judge and jury” of compliance with its standards. (https://www.ft.com/content/75527cce-9748-4aec-b6e6-7c7828460d2a) SBTi’s 10 validators can review the documentation submitted by the 1,500 plus net zero committing companies to determine whether these companies have followed the requirements and recommendations for net zero target setting and for using the FLAG tool. However, to enhance the integrity of the net zero standards and the credibility of their use, SBTi should recommend that net zero committing companies obtain a second opinion to verify the credibility of the targets submitted to SBTi and each company’s capacity to realize the short-term (pre-2030) targets. The most robust form of verification would be for SBTi committing companies to disclose quantitatively in audited financial statements their total emissions (including AFOLU emissions) and 1.5⁰ C. pathway strategy to reduce those emissions. These disclosures would include the company use of emissions offset contracts to report removals, e.g., (https://www.sierraclub.org/sites/www.sierraclub.org/files/blog/Offsets%20Disclosures%20in%20Climate%20Risk%20Disclosure%20Rule.pdf) Absent such a “second opinion,” net zero committed companies are likely to suffer both investor skepticism and the reputational risk of accusations that they are exploiting net zero commitments to “climate wash” their operations. (https://carbonmarketwatch.org/wpcontent/uploads/2022/02/CMW_CCRM2022_v08_FinalStretch2.pdf),
p. 3, lines 8-9: “This guidance document and science-based targets for FLAG apply specifically to the land-related emissions (and qualified removals) in a company's direct emissions and supply chain.”
Comment: The guidance document should supply a definition for “qualified removals” and for “supply chain emissions.” The former definition will likely be drawn from the forthcoming Greenhouse Gas Protocol Land Sector and Removals Guidance. (p. 4, lines 10-11) SBTi should review Carbon Plan’s evaluation of 14 major removals protocols and consider using the evaluation criteria in the definition of “qualified removals.” (https://carbonplan.org/research/soil-protocols-explainer) SBTi should clarify that “supply chain emissions” include all emissions with contracted suppliers (e.g., in poultry, dairy and hog Concentrated Animal Feed Operations) and emissions for commodities over which a company exercises market power (e.g., through “captive supply” arrangements for beef cattle). Those clarifications should help the FLAG companies design, achieve and have validated by SBTi the FLAG C-3 target of “at least 67% of FLAG-related scope 3 emissions.” (Table 1, p. 5) Achieving that target would be great progress over the current situation. According to the Institute for Agricultural and Trade Policy, only four of 20 major European dairy and meat processing companies reported their scope 3 emissions. (https://www.iatp.org/emissions-impossible-europe).
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