Climate Impact Partners Calls for Flexible Rules in Net-Zero Standards

Climate Impact Partners (CIP), a UK company specializing in climate finance and carbon project development, has provided formal comments to the Science Based Targets initiative (SBTi) as part of its public consultation process, requesting amendments to the suggested revisions in the Corporate Net-Zero Standard 2.0 (CNZS 2.0). The response was addressed specifically to introduce more flexibility and clarity into the standards to enable companies to achieve net-zero targets without imposing overly unrealistic barriers.

The Corporate Net-Zero Standard of the SBTi is a globally accepted framework known to steer businesses in establishing emissions reduction goals based on climate science. In light of the ongoing revision, the new version seeks to sharpen methods towards emissions accounting, supply chain action, and carbon removals. Yet Climate Impact Partners cautioned that some of the draft provisions in CNZS 2.0 are to become unrealistic for small businesses and those within involved and complex global value chains, most notably when addressing Scope 3 emissions.

Scope 3 emissions are indirect emissions which are released across the whole supply chain of a business. They encompass suppliers, distribution chains, and product use emissions. Fuel emissions which are combusted in cars sold by a car company are Scope 3, although the company does not burn them. Reducing the emissions is a huge challenge, particularly for companies with little control over external partners or customer actions.

Climate Impact Partners' response to the draft CNZS 2.0 is based on four key recommendations. The first relates to the engagement of suppliers. CIP has warned against requiring engagement with suppliers while establishing targets in Scope 3. The company believes that requiring engagement with suppliers would leave out companies that are not able to have strong bargaining power with their suppliers. Rather, it recommends that engagement with suppliers be encouraged as a best practice using guiding advisory tools and supportive structures.

The second recommendation is on the requirement of harmonised guidance on Scope 3 reduction. CIP urged SBTi to engage with forthcoming revisions of the Greenhouse Gas Protocol so that harmonised accounting guidelines are in place. In particular, the business firm encourages the utilization of market-based approaches, e.g., book-and-claim schemes and insetting, that enable businesses to claim emission reductions without physical emission monitoring at every supply chain level.

On carbon removals, CIP favors interim targets but has criticized the draft proposal for being too rigid in its standards of permanence that they say will stifle innovation and participation. The company proposes a phased approach, with incremental use of carbon removals consistent with current scientific frameworks like the Oxford Principles. It also suggests that companies be permitted to use high-quality carbon credits, particularly for residual Scope 3 emission offsetting, so as to provide realistic choices to firms that cannot avoid all emissions at once.

The fourth one is regarding beyond value chain mitigation (BVCM). Here, actions are taken outside of a firm's direct or indirect emissions, e.g., investing in other actors' climate projects. CIP has urged SBTi to formally accept BVCM as part of corporations' legitimate climate strategy. The company is suggesting a tiered approach where even small or resource-limited firms can make substantive contributions without making internal emission reduction the only agenda.

In general, the firm's submission calls for finding the middle ground between implementational feasibility and scientific credibility for SBTi. CIP believes that firms should be facilitated rather than disabled while they aim to lower their carbon footprint with the tools available. More open and flexibility in standards, according to the organization, will yield broader participation and speed up private sector finance towards climate mitigation.

This input is timely for SBTi as it is under intense scrutiny on where it stands on carbon offsets and internal decision-making. Climate groups and corporations have also provided comments to leave their mark on the final shape of CNZS 2.0. A new Corporate Net-Zero Standard is due to be published later in the year and the consultation feedback will probably have a significant influence on its final shape.

The wider context is increasing pressure on businesses to achieve net-zero without threatening greenwashing. Increasingly, many organisations are finding it harder to report and disclose their emissions, especially Scope 3 emissions throughout the whole product life cycle. The complexity of the global supply chain is another layer of complexity, particularly for firms operating in multiple geographies and sectors.

Climate Impact Partners' recommendations take a pragmatic stance on these challenges. By making recommendations for reforms that are scalability-friendly, the company endeavors to make sure that not just is the net-zero plan scientifically feasible but also highly flexible enough to fit into many varied business environments. This set of reforms, if adopted, can prove to be a game-changer in the way all forms and sizes of companies become integrated with climate objectives in the near future.

Source
Nirmal Menon, ESG Times, June 5, 2025