Communities need a seat at the table in the development of guidance on corporate decarbonization

To the attention of

Susan Jenny Ehr, Interim CEO, Science Based Targets initiative (SBTi)

Alberto Carillo Pineda, Chief Technical Officer, SBTi

Tracy Wyman, Interim Chief Impact Officer, SBTi

London, 04.07.2024

Dear SBTi Board of Trustees,

We, the Peoples Forests Partnership (PFP), are writing to request inclusion in discussions on the use and quality requirements of carbon credits from voluntary carbon markets for the abatement of Scope 3 company emissions.

The PFP was formed to support forest communities’ call for their right to participate equitably in climate and conservation finance, if they choose to do so, including through voluntary carbon markets. We are currently connecting communities across the Americas from the north of Mexico to the south of Peru, reaching over 120 community organizations across Africa, and are on a path of deeper outreach in Asia. Many of our members have, or intend to develop, projects that they aim to have funded through the sale of carbon credits.

Several letters have been published in response to the announcement of the possible use of carbon credits to meet Scope 3 emissions, including from NGOs, companies, and academics, calling for a reversal of the previous announcement. There have also been letters in support of the SBTi’s announcement from the West African Alliance on Carbon Markets and Climate Finance, environmental NGOs, and Global South Community-Based Organizations and Small Businesses. This announcement has polarised opinions between organizations that share the same ultimate goals.

At a time of unspeakable corporate record profits, the pressures our community members are facing in guarding nature are growing by the day. We are concerned that the decision eventually taken by the SBTi could further limit Indigenous Peoples, traditional owners, local and Afro-descendant communities’ access to direct finance, without giving them an opportunity to contribute to the discussion. Currently, less than 1% of climate finance is directly reaching Indigenous Peoples, traditional owners, local communities, and Afro-descendants, despite research consistently finding that these groups are the most effective stewards of natural ecosystems.

We understand the Scope 3 challenge is a complex issue, and there is debate about the most effective way to address Scope 3 emissions. We also agree that any decision to allow the use of carbon credits must support the goals of the Paris Agreement, and that companies must not be delayed from reducing their emissions. However, the scale of reported Scope 3 emissions means that even a small portion of abatement from carbon credits could drive significant finance to our members.

The Scope 3 emissions of some companies are larger than the total emissions of our members’ nations. Volkswagen Group’s Scope 3 emissions are reported at over 400m tCO2e (Scopes 1 and 2 are less than 7m tCO2e combined). Boeing’s Scope 3 emissions are reportedly over 420m tCO2e (Scopes 1 and 2 are less than 2m tCO2e combined). This is higher than Colombia’s total greenhouse gas emissions, even when accounting for emissions from agriculture, forestry, and other land use (AFOLU). Choosing the path that most effectively accelerates decarbonization will be difficult, and we commend the SBTi for taking on this challenge.

We support the inclusion of limited and near-term use of rights-based, community centered, high-quality carbon credits in Scope 3 emissions abatement if certain conditions are met:

• Projects that supply eligible carbon credits from nature-based solutions should be aligned to the Peoples Forests Partnership Principles. The projects must support human rights, community land tenure, traditional knowledge and customary institutions and follow high-quality practices. Funding of activities must reach communities directly.

• Companies must have ambitious decarbonization targets and transparently show the use of the purchased credits.

• Companies must adhere to the mitigation hierarchy.

The eventual guardrails must focus on both reducing global emissions and investing into nature.

Communities hold the key to restoring and protecting nature at speed and scale. Indigenous Peoples, traditional owners, local communities and Afro-descendants must be included in the conversation on carbon credits for the abatement of Scope 3 emissions alongside companies and academics. Our members, the owners and the stewards of the territories, have ensured the conservation of forests and natural grasslands and its biodiversity for centuries in the fight against climate change at significant cost. The eventual decision on whether to allow carbon credits for the abatement of Scope 3 emissions will impact the flow of financial resources that come to our members’ voluntary carbon market projects, impacting the future of their people.

Our mission is to create direct finance flows to rights-based and community-centered mitigation activities. We would ask that the SBTi does not increase barriers to finance for communities. We at the PFP are ready to support you in finding a pragmatic approach that drives impact and integrity.

Sincerely,

Anna Lehmann

Executive Director, PFP

Note: The PFP is on a mission to create direct finance flows to rights-based and community-centered nature and biodiversity conservation and restoration activities. As an organization we support the creation of equitable markets and financial instruments for nature-based solutions, but that does not mean that all our member organizations want to get involved in carbon or biodiversity markets. The decision to get involved lies with the communities.