Earning Leadership status with SBTi could cost companies billions

This is corporate climate policy news, not something that touches your own house directly, but it's worth understanding if you follow company sustainability claims.

Starting next year, the Science Based Targets initiative (SBTi), a group that sets guidelines for corporate emissions cuts, will let companies earn recognition for taking responsibility for the emissions they haven't eliminated yet. There are three tiers. "Engaged" companies pay for carbon credits or set an internal carbon price covering 1 percent of their emissions. "Advanced" companies cover all their direct and energy-related emissions plus enough of their supply-chain emissions to reach 10 percent of their total footprint, using credits or a carbon price of at least $20 per ton of CO2. "Leadership," the top tier, requires a carbon price of at least $80 per ton applied to 100 percent of emissions, with the money used to buy matching credits.

The costs vary hugely by company size. Using an industry calculator, estimates show mining giant Rio Tinto would need to spend about $23 billion a year for Leadership status, and Ford about $13 billion — more than either company's recent profits, making that tier unrealistic for them. Smaller emitters like Autodesk could reach Leadership for under $6 million. Most large companies, including tech firms with strong profits, are expected to aim for the middle "Advanced" tier rather than the top one, since few current corporate carbon pricing policies actually meet the $80-per-ton threshold across all their emissions.