The Science Based Targets initiative (SBTi) has announced a flurry of major changes to its operations and governance amid pressure for reform of its target-validation processes and surging demand from companies seeking independent approval of corporate climate goals.
The independent climate goals body said the "transformation program" would see it established as an independent charitable entity headquartered in the United Kingdom, backed by a new board of independent trustees and a separation of its target-setting and validation services to guard against conflicts of interest.
Crucially, too, the SBTi said it planned to strengthen and publish its standard-setting procedures to improve transparency, in addition to increasing its capacity to validate corporate climate targets in response to accelerating demand for its services from corporates.
Last year saw an 87 percent year-on-year increase in the number of companies seeking to set climate targets through the SBTi, which said it expected more than 10,000 firms to have set such goals through the organization by 2025, up from just over 1,000 today.
Luiz Amaral, SBTi's CEO, said action was urgently needed to accelerate corporate climate action, but that "this action must be built on trust as businesses require the highest level of credibility for their targets."
"This year we have witnessed the three hottest months ever recorded — we must accelerate on all fronts," he said. "When I joined last year, my key remit was to build out the SBTi's governance, while scaling up the organization in the face of enormous demand."
This year we have witnessed the 3 hottest months ever recorded — we must accelerate on all fronts.
With growing numbers of businesses and organizations announcing net zero emissions goals in recent years, the SBTi — set up by a host of respected organizations including WWF, CDP, and the UN Global Compact — has emerged as the leading independent verifier of corporate emissions standards, with thousands of major firms having since sought SBTi certification.
But as the SBTi has become more widely known worldwide, scrutiny of its procedures and standards has also inevitably stepped up, and the organization has faced widening pockets of criticism from detractors who have called for an overhaul of its target validation process to improve credibility.
Critics had argued there were perceived biases in SBTi's system towards richer nations, overly loose rules around baseline years used by firms for carbon accounting and the authorization of controversial carbon credit use in emissions accounting procedures.
Concerns have also been raised about SBTi's financing model, which depends on corporate philanthropy and payments from the same companies seeking validation of their climate goals, prompting allegations of conflicts of interest within the organization.
In the last year, the SBTi said it had doubled its headcount and halved average waiting times for corporate target validations, in addition to appointing an independent Technical Council to review and approve its standards before formal adoption — a key demand from SBTi's critics.
And today the SBTi said it would be further revamping its organizational structures and bolstering oversight measures, in a move likely aimed at confronting previous criticisms regarding its governance.
An SBTi spokesperson explained that it would, in effect, operate as two entities going forward, with one arm of the organization focused on standard-setting for corporate climate action and the other responsible for validating company climate goals against SBTi's standards. "This is considered best practice for validators and standard-setters and will safeguard impartiality in decision making," the spokesperson said.
The new structure is designed to provide businesses and financial institutions "greater confidence" about SBTi's standards and the credibility of their validated targets, according to the organization.
This is considered best practice for validators and standard-setters and will safeguard impartiality in decision making.
"The aim is to ensure the highest level of trustworthiness for corporate climate goals with best practice, greater capacity and service excellence for target validation services," the spokesperson explained. "The benefit to business is that it will make target validation quicker, simpler and it will ensure that it has the highest level of credibility."
Meanwhile, having previously operated as an initiative run by several aforementioned green business groups and NGOs, SBTi today also said it planned to restructure as an independent limited company incorporated the U.K., with a new company board established and the first members of that board appointed.
SBTi said it had also submitted an application to the U.K. Charity Commission, but that it would still retain close links with its founding partner organizations, representatives of which are set to continue serving on the organization's board alongside new independent trustees.
Francesco Starace, former CEO of Italian energy giant Enel, has been appointed to chair the SBTi's board of trustees, where he will be joined by fellow new board member appointees Ester Baiget — president and CEO of Danish biotech firm Novozymes — and former Colombian president and anti-deforestation advocate Ivan Duque. More board members are expected to be announced in the coming weeks and months, according to SBTi.
Welcoming his appointment, Starace said he was "very impressed by the momentum the SBTi has built since its inception."
"Today, the organzation validates thousands of companies' targets each year," he said. "The SBTi plays an important role in encouraging ambitious corporate climate action, which relies on credible target validation and robust standard-setting. I feel honored to join as chair during this phase of rapid growth."
The announcement follows the move from SBTi last month to single out more than 60 major firms worldwide for failing to submit their official emission reduction goals for approval within deadline.