<h2>Summary of the article</h2><ul><li>The COVID-19 health crisis and the war in Ukraine have exposed the dependency of our economies on raw material resources.&nbsp;</li><li>While the decarbonization roadmap for our economies involves reducing our dependency on fossil fuels, it will also increase our requirements in metals, necessary for certain “decarbonizing” technologies such as renewable energies and batteries.&nbsp;</li><li>The value chains for these metals are currently very strongly dominated by Asia.&nbsp;</li><li>If Europe is to remain in control of its destiny where the low-carbon transition is concerned, it will have to adopt a concerted strategy that will allow it to aim for a form of resilience with regard to essential raw materials. The current geopolitical context only adds to this urgency. Europe can draw on the following four levers:&nbsp;<ul><li>energy sufficiency;</li><li>resource circularity;</li><li>the structuring of sustainable value chains;</li><li>the creation of a new relationship to resources, seen as a common good for humanity, and of adequate governance of these resources.</li></ul></li></ul><h2>Introduction&nbsp;</h2>In France and in Europe, the COVID-19 pandemic has highlighted a strong external dependency on products now considered vital, notably masks, gloves and vaccines. The war in Ukraine and the resulting dire humanitarian crisis have brought to light yet another of Europe’s dependencies, namely on the supply of raw materials, both fossil fuels and metals. The economic repercussions of the soaring prices of foodstuffs, metals and hydrocarbons exported by Russia and Ukraine demonstrate the fragility of our globalized value chains, and illustrate the importance of supply choices in the functioning of our economies and industries. While the low-carbon transition will drastically increase requirements in critical metals, it invites us to rethink our value chains to remain in control of our destiny.<h3>A. The transition to a low-carbon economy could significantly increase global demand for raw materials.&nbsp;</h3>Within the framework of the Fit-for-55 climate change package, the European Union has set targets to reduce its greenhouse gas emissions by 55% by 2030 (relative to 1990) and concerning all sectors of the economy.&nbsp;The low-carbon transformation will drastically increase the demand for specific mineral resources that play a crucial role in certain decarbonization technologies.&nbsp;As summarized in the table below, lithium, nickel, cobalt and graphite are essential for the construction of batteries for electric vehicles, rare-earth elements<a class="footnoteLink" href="#footnote-1">[1]</a> for the permanent magnets used in wind turbines and photovoltaic motors, and significant amounts of copper and aluminum for electricity networks.

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To understand the orders of magnitude involved, the Sustainable Development Scenario (SDS) of the International Energy Agency (IEA) forecasts that the global consumption of metals and minerals<a class="footnoteLink" href="#footnote-2">[2]</a> used in decarbonization technologies will have increased at least by a factor of 4 by 2040. Today, global demand for nickel and cobalt is primarily driven by non-transition related consumption. However, the continued growth of the electric vehicle battery market alone is expected to cause, by 2040, a 40-fold increase in lithium consumption and a 21-fold increase in cobalt consumption, while the total demand for nickel will double. The consumption of rare-earths, related to the wind energy sector, is expected to increase sevenfold.

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In France, the scenarios developed by ADEME (Agency for Ecological Transition) – with decreasing energy sufficiency and increasing technology from S1 to S4 – indicate that by 2050 the consumption of lithium is expected to be multiplied by a factor of 5 to 7 with respect to its current level, and that of cobalt by a factor of 1 to 2. In each of these scenarios, the quantity of steel, aluminum and copper, primarily driven by the demand for new vehicles (representing 60% of total demand for steel, 90% for aluminum and 75% for copper) follows the evolution of the sales volume, which varies from 1.5 to 3&nbsp;million in scenarios S1 to S4, compared to 2.5&nbsp;million in 2020<a class="footnoteLink" href="#footnote-3">[3]</a>.

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<h3>B. The current structuring of globally fragmented value chains is giving rise to a new geopolitics of resources.</h3>The war in Ukraine has profoundly destabilized our economies through its impact on global supply chains related to the soaring prices of raw materials, notably wheat, corn, gas and oil, of which the two warring countries are among the main exporters. Metals and gases such as aluminum, nickel, palladium, titanium, krypton and neon have also reached record high prices.&nbsp;These metals and gases have the specificity of being essential to transition technologies. They are used in the manufacturing processes of electric vehicles (EV), solar PV, wind power, and the production of semiconductors, the latter being found in all smartphones, cars and computers, and without which no digital product is possible.&nbsp;Some 90% of neon gas comes from Ukraine.&nbsp;Russia produces:&nbsp;<ul><li>40% of palladium (semiconductors and catalytic converters);</li><li>10% of platinum (diesel engines and fuel cells for hydrogen vehicles);</li><li>6% of the world’s aluminum.</li></ul>Regarding the latter, France imports 50% of its requirements, a third of which from Russia.&nbsp;Dependency is even greater for alumina, used in the production of primary aluminum, with France importing 80% of its requirements from Russian giant Rusal<a class="footnoteLink" href="#footnote-4">[4]</a>.&nbsp;These figures illustrate a global reality: mineral resources, their production and refining are highly concentrated from both geographical and capital-intensive perspectives. Modern manufacturing processes therefore require the orchestration of a wide variety of non-substitutable inputs coming from a very small number of countries, of which, incidentally, China boasts the lion’s share.&nbsp;

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It is clear that the European Union is in a position of almost total dependency for the supply of its raw materials, particularly those that are now essential to its stated ambition concerning the reduction of its greenhouse gas emissions.&nbsp;&nbsp;

A raw material is considered to be critical when it is both of great economic importance – essential for industrial sectors that create added value and jobs, and with no immediate substitute – and when there is a high risk of supply shortages. The European Commission has drawn up a list of 30 critical raw materials, of which it produces only 3%, and of which more than 50% are imported from China<a class="footnoteLink" href="#footnote-5">[5]</a>. The EU is only present in niche markets for battery and component production.

Achieving global carbon neutrality by 2050 implies eliminating the use of fossil fuels over the next three decades. Once the energy consumption reductions related to sufficiency and efficiency efforts are integrated, the necessary residual fraction of energy consumed for human activities will have to be decarbonized.&nbsp;This will shift the current competition for access to fossil fuels to those metals that are essential for decarbonizing technologies, which run on low-carbon energy.&nbsp;Mineral resources are thus joining hydrocarbons as a major geopolitical issue. With States positioning themselves as potential rivals in obtaining critical raw materials, some are developing a logic of self-sufficiency or of reduced dependency in order to secure their supply.Strategies for economic sovereignty have thus emerged in Russia following the 2014 sanctions related to the annexation of Crimea, in India with the “Make in India” government initiative, and in China with the “Made in China 2025” national strategic plan. China represents a singular case on the global chessboard of access to resources. Indeed, Beijing currently produces 86% of rare-earths, the result of a strategy implemented several decades ago. To ensure its industrial independence, it has organized a move upmarket and developed vertically integrated companies, allowing it to control key links in the value chain for these metals. Given its dominant position, it has not hesitated to impose price distortions through firstly reductions in export quotas in 2011 followed by massive increases in its domestic consumption, thereby maintaining de facto pressure on its importing customers, the foremost of which being the United States and Europe.<h3>C. The low-carbon transition requires Europe to adopt a concerted strategy that will allow it to aim for a form of resilience with regard to essential raw materials. This will ensure it remains in control of its own destiny. The current geopolitical context only adds to this urgency.</h3>Four complementary levers are available to Europe to both achieve this resilience<a class="footnoteLink" href="#footnote-6">[6]</a> and to reconcile the requirements for raw materials induced by human activities, on the one hand, with planetary limits on the other:&nbsp;<ol><li>Energy sufficiency, i.e. the massive reduction of consumption requirements, as a priority and as soon as possible.</li><li>An increase in resource circularity and in recycling.</li><li>The structuring of sustainable value chains for those requirements not covered by the first two levers.</li><li>Finally, a possible radical change in approach to resources, considering them as common goods and not as conventional material goods that can be appropriated by only a fraction of the human population.</li></ol><h4>1. The first lever therefore consists in reducing requirements in raw materials by reconsidering our consumption in the light of redesigned requirements that target only what is necessary and not the superfluous.&nbsp;</h4>Sufficiency is thus the first and absolutely essential step in limiting our dependency on these productions. It invites us to reassess what in our consumption has value, and what we could do without. It also opens up a major avenue for innovation with a view to replacing, to the greatest extent possible, current raw materials with low-carbon and less critical raw materials.&nbsp;<h4>2. The second lever consists in developing an ultra-efficient use of resources already present in the territories by optimizing recycling capacities, which involves major investments to accelerate the circular economy.&nbsp;</h4>Recycling in the battery industry is a key issue in this respect. Reflecting the urgency of the situation, the European regulation on the battery industry currently being studied has raised the recovery rates and collection thresholds for metals.&nbsp;Generally speaking, improving our recycling capacity will depend on our ability to optimize collection. It will also depend on the ingenuity of industrialists in improving processes, as well as on French and European regulations to increase the cost of carbon-based products. The aim of the latter would be to make the use of recycled materials less expensive than that of virgin raw materials.&nbsp;

“Collection and logistics costs represent a significant part of the cost of battery recycling. Today, the battery recycling value chain does not yet exist in Europe.&nbsp;The business model for this industry has yet to be defined, but in any case, the volumes to be recycled will be very high and it is vital to have a competitive process in place to recycle used batteries in the most cost-effective manner and with the lowest CO2 emissions possible.”&nbsp;

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Average end-of-life recycling rate for metals in %

<h4>3. The third lever lies in the structuring of sustainable value chains for requirements not covered by the first two levers.&nbsp;</h4>When our requirements, even reduced, exceed the primary or secondary resources available on our territory, control of the next stages of the value chain (refining, precursors of finished products, finished products) will be crucial for Europe. These activities, located on its territory, will have to be decarbonized, which will generate higher investment costs. Market rules to protect these investments will have to be implemented, the EU’s Carbon Border Adjustment Mechanism (CBAM) that is currently under discussion representing a first step in this direction.&nbsp;

&nbsp;“How can we develop a competitive European battery industry?&nbsp;If battery production costs in Europe were to prove higher than in China, would consumers choose to pay more for a French car?&nbsp;Today in Europe, consumers do not know where their battery comes from or under what conditions it was manufactured.&nbsp;It is important to develop transparency in the battery value chain.”&nbsp;

With regard to the extraction of raw materials not present in Europe, it is imperative to implement the EU’s Raw Materials Diplomacy.&nbsp;Following the example of Japan and its strategy to secure its supplies, the trio of actors below would have to operate in a planned manner to orchestrate this European strategy:&nbsp;<ul><li>the public authorities (the European Commission, for example, under a mandate that could be inspired by that implemented for the centralized purchase of vaccines during the COVID-19 health crisis);</li><li>the sector’s industrialists;</li><li>the relevant financing actors.</li></ul>This triumvirate would be joined by representatives of civil society. The Varin report<a class="footnoteLink" href="#footnote-7">[7]</a> takes a modest step in this direction with the idea of investment funds in strategic metals for the energy transition, but seen from a strictly French perspective and omitting the participation of civil society.&nbsp;Moreover, if this approach merely replicates a historical dynamic of appropriating materials from there for our requirements here, it will simply perpetuate the resource curse<a class="footnoteLink" href="#footnote-8">[8]</a> or Dutch disease. The relationship between producing and consuming countries should not be a strictly commercial relationship, but rather a genuine co-development agreement, particularly when these countries are in a notable situation of underdevelopment:<ul><li>guaranteed access for producing countries to the fraction of the extracted raw material intended to meet their domestic requirements;</li><li>assistance by consuming countries to develop a processing industry for the extracted raw material in the producing country, enabling maximization of the value captured locally, and this assistance being associated with long-term agreements ensuring volumes of raw materials for the consuming countries;</li><li>provision by consuming countries of decarbonizing technologies, enabling producing countries to follow the most low-carbon development path possible.</li></ul><h4>4. The fourth lever poses in a more fundamental way the question of how to build a serene and sustainable relationship between requirements in raw materials for our human activities and the planet’s physical limits.</h4>The competition to acquire more and more resources, in order to continually produce more and thereby vie for domination of the economic playing field, is already (and will be increasingly harshly) confronted with the finiteness of these resources and, more broadly, with the physical limits of the only spacecraft housing humanity: the Earth.&nbsp;After having reduced this requirement in resources to what is strictly necessary, by means of energy sufficiency and resource circularity, wouldn’t the next step involve representing these resources as a common good? By definition, this good is necessary for all since it allows for a decent standard of living for the whole of humanity. It should therefore be managed in a concerted manner and not be appropriated by a small number of individuals to the dual detriment of the others: in a zero-sum game, when some take the biggest slice of the cake, less is left for the others, who will also suffer all the more from the environmental consequences of this overexploitation of resources.&nbsp;This idea of coordinated and equitable governance at the international level, guaranteeing fair and sustainable access to common goods resources, may appear somewhat utopian today. But if we want to avoid a Mad Max-like dystopian future, this could become a matter of course within the next few years given the probable succession of crises that will result from the confrontation of our economies with the limits of our planet.&nbsp;

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Rare-earth elements: a set of 17 metals with similar properties, notably including neodymium, dysprosium, praseodymium and terbium

The IEA study considered mainly cobalt, copper, lithium, nickel and, to a lesser extent, niobium, platinum, selenium, silicon, silver, tantalum, tellurium, tin, titanium, tungsten, vanadium, zinc and zirconium

Private and light commercial vehicles in France; source: ADEME

<a href="https://www.usinenouvelle.com/editorial/dependante-de-la-russie-pour-ses-metaux-l-industrie-europeenne-craint-des-ruptures-d-approvisionnement.N1790502">L'Usine Nouvelle</a>

French Alternative Energies and Atomic Energy Commission, <a href="https://www.cea.fr/comprendre/Pages/matiere-univers/essentiel-sur-matieres-premieres-critiques.aspx">Les matières premières critiques</a>.

<a href="https://ec.europa.eu/growth/sectors/raw-materials/policy-and-strategy-raw-materials_fr">https://ec.europa.eu/growth/sectors/raw-materials/policy-and-strategy-raw-materials_fr</a>&nbsp;

<a href="https://www.ecologie.gouv.fr/investir-dans-france-2030-remise-au-gouvernement-du-rapport-varin-sur-securisation">https://www.ecologie.gouv.fr/investir-dans-france-2030-remise-au-gouvernement-du-rapport-varin-sur-securisation</a>

<a href="https://fr.wikipedia.org/wiki/Mal%C3%A9diction_des_ressources_naturelles">https://fr.wikipedia.org/wiki/Mal%C3%A9diction_des_ressources_naturelles</a>

Ensuring supplies of raw materials and securing value chains within the dual context of Russia’s war on Ukraine and the imperative to decarbonize our economy

The Science-based targets Initiative&nbsp;(SBTi) was founded in 2015 by the World Resources Institute&nbsp;(WRI), the Carbon Disclosure Project&nbsp;(CDP), the United Nations Global Compact and the World Wide Fund for Nature&nbsp;(WWF), with the intent of "develop[ping] standards, tools and guidance which allow companies to set greenhouse gas (GHG) emissions reductions targets in line with what is needed to keep global heating below catastrophic levels and reach net-zero by 2050 at latest."<a class="footnoteLink" href="#footnote-1"><a class="footnoteLink" href="#footnote-1">[1]</a></a> (i.e. 5% reduction in emissions per year).&nbsp;For almost 10 years, this initiative has helped increase the number of climate commitments made by companies, and contribute to bridge the gap between business and science. On April 9th, however, the organization's Board of Trustees&nbsp;&nbsp;issued a statement authorizing the use of "Environmental Attribute Certificates", including carbon credits, to achieve scope 3 carbon footprint reduction targets. The Board's decision is in line with the position of historical offset players such as the Voluntary Carbon Market Initiative&nbsp;(VCMI), with which SBTi recently formed a partnership<a class="footnoteLink" href="#footnote-2">[2]</a>. While the organization's&nbsp;employees and Technical Council&nbsp;have criticized this statement as “undermining [their] government processes”<a class="footnoteLink" href="#footnote-3">[3]</a> , this stance by the board is&nbsp;first and foremost scientifically questionable. Final validation of this intention, which could take place in July, would mark a clear step backwards in the ambition historically carried by the initiative, and would dangerously delay the collective action required for the ecological transition.<h2>Taking the easy way-out</h2>Since its creation in 2015, SBTi has become one of the most well-known climate-related labels: by the end of 2023, it announced that it had approved the targets of over 4,000 companies. So far, its rise to prominence has made the subject more accessible, provided a clear, albeit perfectible, framework, and enabled the setting of emissions reduction in line with climate science. With the targets of many of the pioneering certified companies set for 2025 (and those of the following ones shortly thereafter), compliance with the commitments made is about to be verified. Unfortunately, in most cases, companies seem to be falling short of the mark,&nbsp;despite an already accommodating framework that allows them to set intensity targets<a class="footnoteLink" href="#footnote-4">[4]</a> : of the 56 commitments due in 2025 or earlier, and listed for scope 1+2+3 in SBTi's Monitoring report 2022<a class="footnoteLink" href="#footnote-5">[5]</a>, only 18 (around 30%) have reached more than 70% of their target<a class="footnoteLink" href="#footnote-6">[6]</a>.&nbsp;This finding should have prompted us to reflect on the flaws in the current system, to better assess the credibility of commitments upstream (for example, by making public the resources deployed by the companies in terms of investment and governance), and to realize that, in the face of climate change, failure to question one's business model inevitably leads to marginal/negligible actions.&nbsp;The submission of SBTi targets must come from an in-depth analysis on the company's "business" resilience, from the point of view of both physical risks and transition risks and opportunities (assessments carried out for example by means of prospective scenario analyses respecting planetary boundaries<a class="footnoteLink" href="#footnote-7">[7]</a>). This reflection should enable the company to confirm or rethink its strategy, in order to make its activity and its product and service offers useful in an economy compatible with the planetary boundaries<a class="footnoteLink" href="#footnote-8">[8]</a>,<a class="footnoteLink" href="#footnote-9">[9]</a>. Unfortunately, the SBTi Board, without consulting the opinion of its Technical Council<a class="footnoteLink" href="#footnote-10"><a class="footnoteLink" href="#footnote-10">[10]</a></a>&nbsp;, has preferred to change the rules of the game rather than endorse this statement of truth to its financial backers.<h2>This position runs counter to the scientific consensus and contravenes the fundamental principles of carbon accounting.&nbsp;&nbsp;</h2>The first reason why this option is inconsistent is definitional. The carbon footprint is an inventory of the emissions on which an activity depends to function; however, the purchase of carbon credits in no way affects these dependencies. A company that has purchased carbon credits to "offset" its emissions has not lessened its exposure to emissions-related risks.The other argument is a physical one. Two major families of projects structure the credit market: projects aimed at avoiding emissions, and projects aimed at capturing CO2 from the atmosphere. Neither can "offset" the CO2e accounted for in a carbon footprint:&nbsp;<ul><li>From a physical point of view, a ton of GHG avoided&nbsp;is not equivalent to a ton of GHG emitted: the latter corresponds to a gas currently present in the atmosphere, whereas the former corresponds to a theoretical difference between actual emissions and those that could have taken place. Put another way, the increase in avoided emissions only guarantees that we are doing better than business-as-usual, not that we are actually reducing emissions. Equating an avoidance carbon credit with a scope 3 emission is therefore questionable.</li><li>The use of so-called sequestration&nbsp;carbon credits to compensate&nbsp;is no more acceptable. Let us mention&nbsp;the two main problems:</li><li>First, this is tantamount to equating a ton of CO2 already emitted with expected (and therefore uncertain) CO2 capture, which takes place over several years. In the case of a forestry project, for example, CO2 sequestration takes place over decades of tree growth, not at the time of the credit purchase.</li><li>Second, the potential for carbon sequestration is limited, making it impossible to&nbsp;"offset" all emissions<a class="footnoteLink" href="#footnote-11">[11]</a> . This is why the SBTi's "Net Zero" standard only promotes the "elimination" of corporate emissions once they have been reduced to an incompressible residual level in 2050, at the end of an emissions reduction process of the order of -90% compared to current levels.</li></ul>The deadlock of offsetting, from a physical point of view, has led to a broad consensus among carbon accounting bodies to exclude any fungibility between carbon credits and corporate carbon footprints. All authoritative bodies on climate reporting (UNFCCC, ISO 14064, GHG Protocol...), and more recently the CSRD<a class="footnoteLink" href="#footnote-12">[12]</a> , prohibit the subtraction of carbon credits from emissions. The SBTi, too, until now, had insisted on this point<a class="footnoteLink" href="#footnote-13">[13]</a> . Validating the use of carbon credits to achieve scope 3 reduction targets would therefore constitute a backtracking and a deviation from the SBTi approach. However, incentives to finance decarbonization projects outside the value chain can be implemented without diminishing ambition in terms of emissions reduction or giving in to the logic of offsetting: carbon credits are useful and contribute to the common effort, provided they are conceived as a complement to the action undertaken in one's own value chain&nbsp;(see conclusion).<h2>A choice that would be inefficient and harmful to the climate cause</h2>The use of carbon credits would perpetuate the illusion that a company can get rid of the problem all by itself, using only money&nbsp;. However, one of the main virtues (and the main difficulty) of the famous Scope 3 lies precisely in the need for cooperation that it implies: it enables a company to situate itself in its network of interdependencies, to involve other players beyond itself, through a game of mutual influence. Many companies may still underestimate the scale of the efforts required to reduce Scope 3 emissions: offering ways of getting around the difficulty, by opening up the use of carbon credits, would maintain the illusion of an easy ecological transition, and delay the implementation of transformative actions. However, the real lesson for a company submitting an SBT objective should be the following: greening one’s activity marginally, without actually questioning business-as-usual practices, will not be enough; the ecological crisis calls for a profound rethinking of business models.&nbsp;The direction taken by the Board of Trustees is&nbsp;also counter-productive from the point of view of financial flows, as it sends out the wrong signals and confuses the debate: a high-carbon industry could tomorrow, through the purchase of carbon credits, be considered "aligned with a 2°C trajectory", while a small business specializing in building renovation, that has chosen to invest to develop its business, would be considered less virtuous. Allowing the use of carbon credits would, in short, be tantamount to favoring companies capable of paying a very high price (the very companies for which the transformations required for decarbonization are the most complex) for these modern-day climate indulgences.&nbsp;Allowing emissions reduction through carbon credits is often presented by offset proponents as a great incentive for the financing of offset projects. This stance is debatable as well, as reducing climate performance to a single figure, resulting from the subtraction between emissions and credits, focuses the discussionon the quantity sequestered rather than the quality of projects. The influx of demand for carbon credits runs the risk of encouraging the development of the least costly and lowest-quality projects. The existence of labels, which tends to ensure a minimum level of quality, is not an absolute guarantee<a class="footnoteLink" href="#footnote-14">[14]</a> , and is not sufficient to direct flows towards the best projects (serious governance, consideration of biodiversity, etc.).&nbsp;<h2>Conclusion – How to get out of the crisis created by the announcement of the SBTi Board</h2>Other approaches are possible to meet both the need to decarbonize our activities, and the need to deploy projects to finance the transition. This is what the Net Zero Initiative<a class="footnoteLink" href="#footnote-15">[15]</a> is working on, by proposing a reporting&nbsp;method based on the logic of contribution to the goal of global carbon neutrality, i.e. the idea that a company should take part in a collective effort, rather than seeking to offset its emissions on its own. The framework proposed by the Net Zero Initiative is&nbsp;based on three non-fungible levers of action:&nbsp;<ul><li>reduction of the company’s carbon footprint - pillar A of the standard,</li><li>promotion of low-carbon products (primarily through the company’s own activities, then through carbon credits for avoided emissions) - pillar B,</li><li>contribution to the effort to sequester carbon and preserve and restore biodiversity (in the company’s value chain or via the purchase of carbon credits for sequestered emissions) - pillar C.</li></ul>Because this approach insists on not neglecting any one of these three pillars, it is more robust, fairer, and more effective.&nbsp;<ul><li>Robust&nbsp;because it is in line with the conclusions of the IPCC, which calls on the one hand to reduce emissions (pillar A)<a class="footnoteLink" href="#footnote-16">[16]</a> , and to do so, to review its product and service offering (pillar B)<a class="footnoteLink" href="#footnote-17">[17]</a> , and on the other hand to develop carbon sinks (pillar C)<a class="footnoteLink" href="#footnote-18">[18]</a> .</li><li>Fair, because it recognizes the contribution of organizations that provide innovative solutions for the transition: as a bicycle manufacturer grows its business, it may need to increase its direct emissions in order to decarbonize mobility. The Net Zero Initiative&nbsp;also prioritizes actions within&nbsp;the value chain - the most difficult, but also the most effective - over projects outside the value chain.</li><li>Efficient, because it enables us to map organizations' efforts precisely, and thus 1) encourages them to mobilize all the levers at their disposal; 2) direct financial flows towards the most virtuous.</li></ul>For all these reasons, we feel that this approach, which is still under development, provides some answers to the challenges raised by the crisis facing SBTi. We hope it will provide food for thought in the future.

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<a href="https://sciencebasedtargets.org/about-us#what-we-do">https://sciencebasedtargets.org/about-us#what-we-do</a>

<a href="https://www.greenbiz.com/article/sbti-yes-companies-can-use-carbon-offsets-abate-certain-scope-3-emissions">https://www.greenbiz.com/article/sbti-yes-companies-can-use-carbon-offsets-abate-certain-scope-3-emissions</a>

Employee letter reprinted in Clancy, H. (2024, April 11). Read the leaked protest letter from SBTi staff angry over new carbon offset policy. Greenbiz.&nbsp;<a href="https://www.greenbiz.com/article/read-leaked-protest-letter-sbti-staff-angry-over-new-carbon-offset-policy">https://www.greenbiz.com/article/read-leaked-protest-letter-sbti-staff-angry-over-new-carbon-offset-policy</a>It should be noted that the Board has since made it known that the principles of governance will be respected in the final decision on the terms and conditions of application.

Intensity targets involve reducing emissions per physical unit produced or per €. This option is aimed in particular at fast-growing companies and/or those making the biggest contribution to the transition, but in practice many companies are taking advantage of it.

<a href="https://sciencebasedtargets.org/reports/sbti-monitoring-report-2022">https://sciencebasedtargets.org/reports/sbti-monitoring-report-2022</a>

In other words, they have achieved 70% of the expected reduction in emissions.

See <a href="https://www.carbone4.com/expertises/resilience and https://www.carbone4.com/expertises/innovation/ifinitiative">https://www.carbone4.com/expertises/resilience and https://www.carbone4.com/expertises/innovation/ifinitiative</a>

<a href="https://www.carbone4.com/cp-emlyon-chaire-strategie">https://www.carbone4.com/cp-emlyon-chaire-strategie</a> and <a href="https://www.carbone4.com/webinaire-strategie-entreprise-urgence-climatique and https://www.ifinitiative.com/">https://www.carbone4.com/webinaire-strategie-entreprise-urgence-climatique and https://www.ifinitiative.com/</a>

In the European market, this work will in any case be made necessary by the CSRD, provided it is used as a tool for strategic rethinking and transformation, rather than simply as a regulatory compliance exercise.

Letter reprinted in Clancy, H. (2024, April 11). Read the leaked protest letter from SBTi staff angry over new carbon offset policy. Greenbiz.&nbsp;<a href="https://www.greenbiz.com/article/read-leaked-protest-letter-sbti-staff-angry-over-new-carbon-offset-policy">https://www.greenbiz.com/article/read-leaked-protest-letter-sbti-staff-angry-over-new-carbon-offset-policy</a>

See the March 2024 rules for calculating short-term targets, p. 10: https:<a href="https://sciencebasedtargets.org/resources/files/SBTi-criteria.pdf">//sciencebasedtargets.org/resources/files/SBTi-criteria.pdf</a>

Thomas, P-L. (2023, August 30). Verra, leader in carbon credits, nailed once again.&nbsp;La Croix.&nbsp;<a href="https://www.la-croix.com/Economie/Verra-leader-credits-carbone-nouvelle-fois-epingle-2023-08-30-1201280701">https://www.la-croix.com/Economie/Verra-leader-credits-carbone-nouvelle-fois-epingle-2023-08-30-1201280701</a>

<a href="https://www.net-zero-initiative.com/fr">https://www.net-zero-initiative.com/fr</a>

See the work of Group 1 in particular.

See the work of Group 2 in particular.

See the work of Group 3 in particular.

Why is the SBTi's intention to count carbon credits as emission reductions problematic? A Carbone 4 analysis

The Science Based Targets Initiative is accused of greenwashing.

Hughes-Marie is a Manager at Carbone 4.He co-manages Carbone 4's Strategy Department, which aims to assist companies' General Management and Strategy Departments in identifying the business risks and opportunities related to the low-carbon transition and to help them develop their strategy.He has accompanied many General Management teams in various sectors (industry, services, construction, mobility, telecom) in the challenge of their strategy resilience with regard to the challenges of low-carbon transformation. He regularly participates in the Board of Directors and Executive Committee of enterprisesHe is also a member of the Physical Risks practice and has developed an expertise in climate change adaptation.Prior to joining Carbone 4, Hughes-Marie worked ~5 years in the mining and metallurgy industry, in the office of the CEO of Eramet, in the team in charge of Strategy, Development and Financial Communication. He has developed specific skills in corporate strategy, development of innovative industrial projects as well as merger and acquisition.

Hughes-Marie Aulanier

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