Sustainable Flash Note: SBTI 2.0: Take-aways from our expert event with ERM

Research evidence excerpt

Sustainable Flash Note: SBTI 2.0: Take-aways from our expert event with ERM

s, gas grids,

logistics networks — and 2) sector-level actions, permitted only where structural constraints

prevent action at the activity pool level (cost considerations alone do not constitute a

structural constraint). ERM highlighted several remaining methodological gaps: activity

pool definitions are not yet granular enough to be operational, particularly for internationally

traded commodities like steel, where a geographically bounded activity pool is much harder

to define than for an electricity grid. On claims, ERM confirmed SBTi is working on a policy

distinguishing between: emissions reduction claims (activity-level only, resulting in a change

to the physical GHG inventory); alignment claims (activity-level and activity pool-level);

and system contribution claims (activity pool and sector-level).

Market instruments: a broader toolkit, but a strict hierarchy

ERM highlighted the expansion of market instruments beyond scope 2 renewable energy

certificates to cover scope 1 (e.g. renewable natural gas certificates) and scope 3 (e.g.

sustainable aviation fuel, steel, and cement certificates) as a "very positive development" that

broadens the toolkit available to companies. Market instruments can support alignment or

system contribution claims, but not emissions reduction claims. ERM noted that the

minimum integrity criteria for scope 3 certificates are currently defined at a high level and

will require further sector-specific guidance to become operational.

Carbon credits: from resistance to “full embrace”

ERM characterized V2.0's treatment of carbon credits as "a full embrace" — a significant

shift from previous versions of the standard. Credits now fit within the OER framework,