NBIM advocates for a straightforward approach from SBTi
In a recent response to a consultation by the Science Based Targets Initiative (SBTi), Norges Bank Investment Management (NBIM) has expressed concerns about the expansion of the organisation's remit, particularly in relation to the verification and enforcement of net zero targets.
The SBTi, a body that helps companies set science-based targets to reduce greenhouse gas emissions, is currently reviewing its approach to net zero targets. The consultation, which was launched in March and remains open until 1st June, is seeking feedback from stakeholders on various aspects of the initiative.
NBIM, an investment manager for the Norwegian government pension fund with assets totaling $1.7 trillion, has not explicitly stated its stance on the SBTi's expansion of net zero standards, verification, and use of carbon credits. However, the investment manager has emphasised its commitment to climate action and sustainability through its 2025 Climate Action Plan.
The plan involves asking companies in its portfolio to commit to business activities aligned with net zero emissions by 2050, setting science-based short-, medium-, and long-term targets. While the specific stance on the SBTi initiative is not mentioned, NBIM's focus on aligning investments with net zero 2050 targets suggests a supportive approach to science-based targets for reducing emissions.
The use of carbon credits is generally a part of broader discussions on climate action, but NBIM's detailed position on this aspect is not detailed in the available information. NBIM has previously stated that it is not fundamentally opposed to the use of carbon credits, but they must represent additional and verified emission reductions.
The investment manager has also cautioned against the complexity of the guidance for SBTi adoption. The guidance, exceeding 100 pages, is a significant barrier to adoption, according to NBIM. Instead, NBIM suggests that auditors, investors, regulators, and civil society may be better suited to assess performance and hold companies accountable to the targets they set.
More than 4,000 companies worldwide have adopted SBTi standards, making it a key benchmark for corporate net zero commitments. Despite this, the consultation remains ongoing, and no final decisions have been made regarding the use of carbon credits in meeting net zero goals.
It is worth noting that NBIM has not commented on the contentious element of SBTi's approach to the use of carbon credits in meeting net zero goals. The SBTi net zero standards consultation is still ongoing, and further updates are expected in the coming months.
- The Science Based Targets Initiative (SBTi), currently reviewing its approach to net zero targets, aims to help companies set science-based targets to reduce greenhouse gas emissions, including those in the realm of environmental-science.
- Amidst the ongoing consultation by SBTi regarding the verification and enforcement of net zero targets, Norges Bank Investment Management (NBIM), which manages finance related to business activities, has shown support for science-based targets for emission reduction, hinting at potential alignment with the SBTi's objectives.
