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Another clean power landmark: solar plants generated more power than coal in the US last month, for the first time ever, according to analysis by researchers at Ember.

Renewables and battery storage accounted for 95 per cent of net US power capacity additions in the 12 months to the end of March, federal government statistics show. Yet the country’s leading technology companies are struggling to meet their longstanding promises to cut their carbon emissions by moving away from fossil-fuelled power, as they lean on gas-fired plants to support their massive rollout of AI data centres.

Now the main standard-setter for corporate climate pledges has unveiled new rules — without previously proposed requirements that would have made things still trickier for Big Tech. A concession to corporate pressure, or simply science-based pragmatism?

Have a good weekend.

I’ve written before about the Groucho Marx dilemma facing corporate climate schemes. Make your membership rules too strict, and few will be able or willing to meet them. Too loose, and they’ll lose all meaning.

Yesterday, the Science-Based Targets initiative — the main global standard-setter for corporate climate claims — published a new version of its main rule book. The new Corporate Net-zero Standard will apply to more than 10,000 corporate signatories who account for more than 40 per cent of global market capitalisation, according to the SBTi.

The document has found a “sweet spot” of overlapping rigour and realism, SBTi chief executive David Kennedy told me. “It’s good for business, good for the planet.”

Not everyone agrees. On the eve of the new standard’s publication, 25 non-profit groups including the Sierra Club and the Union of Concerned Scientists published an open letter warning that SBTi was “about to take a permanent step into irrelevancy” due to “corporate pressure”.

Their concern focused on the rules around renewable energy certificates: a geeky area of carbon accounting that’s been of particular interest to big US tech companies, as I wrote last year.

Time pressure

In a nutshell: under SBTi’s existing rules a company can power its data centre from a gas-fired plant, but buy RECs linked to a solar plant somewhere else. It can then take credit for the “environmental attributes” of that solar power, and use them to cancel out the emissions from the gas-fired plant that’s actually powering its operations.

This form of offsetting has faced heavy scrutiny and concerns about greenwashing. A draft version of the new SBTi standard, published last November, would have phased in new requirements around “hourly matching”. If companies wanted to offset their emissions with RECs, they’d need to ensure that the renewable electricity behind the certificates was generated at the same time as the power they were actually using.

A peer-reviewed study published this month in The Electricity Journal found that hourly matching could drive emissions reductions far greater than current approaches, in part by driving expanded investment in grid-scale storage of renewable power.

But tech companies including Meta and Amazon lobbied against these rules, which could have made it more costly and difficult for them to meet their emissions reduction goals. In yesterday’s final version of the framework, they were dropped.

Kennedy told me SBTi had concluded that “the infrastructure in the markets for hourly matching is just not there at the moment”. The new framework will require larger companies to report on the proportion of their RECs that are hourly matched, though it won’t impose any minimum level.

It’s not the only significant change from the December draft. A requirement for companies to “align ambition with 100% renewable electricity by 2040 at the latest” has been cut.

There’s also a notable shift in language from the previous version of the framework, published in 2021. That document heavily emphasised the need for companies to align their emissions ambitions with a pathway that restrained global warming to 1.5C — the aspirational goal set out in the 2015 Paris Agreement.

The new framework mentions the 1.5C goal only once — and even there it refers to “limiting temperature change to 1.5°C by the end of the century”, which keeps the door open for a temperature increase above that level, followed by geoengineering or carbon removal to bring it back down.

The new document also stresses that companies will be judged on “best efforts” towards the goals they set — a stance that may reassure companies worried about their targets being undone by factors beyond their control.

Growth drive

Much of this may look like simple pragmatism. Scientists, after all, are now broadly agreed that an overshoot of the global 1.5C goal is a virtual certainty. A major multi-author study published yesterday found that the world is on track to breach the threshold around 2030.

But it’s reasonable to note that this standard was developed at a time when SBTi is pursuing rapid membership growth. It validated targets from 3,200 companies last year, a record that’s likely to be broken this year, Kennedy said.

The SBTi’s new five-year strategy, unveiled last month, promised continued membership increases, stating that “our impact scales with our network”. So does its revenue. Established with philanthropic grants, SBTi has been getting a growing share of its funding from corporate signatories who pay up to $34,000 for validation of targets (smaller companies can pay much less). Validation fees accounted for $7mn of SBTi’s $28.5mn in income during 2024.

SBTi says it has a rigorous system to manage potential conflicts of interest around the income-generating validation operations, which are carried out by a wholly-owned subsidiary company that was spun out in 2023, SBTi Services.

The upshot

Critics — like the NGO signatories to this week’s open letter — worry that the SBTi’s growth push has caused it to soften its new rules in a way that could slow the green transition.

Kennedy says the framework is filled with “guardrails” that will ensure it pushes companies to contribute to climate goals, without making unrealistic demands. “We have found something that is true to the science, is very ambitious, but embeds in the commercial realities and strategies of business.”

There’s also a third position: that all this is a pointless distraction from the changes we should really be focused on. That’s the argument of Lisa Sachs, director of Columbia University’s Center on Sustainable Investment. This week she published a paper arguing that current approaches to climate action are failing to address the system-level changes that are needed. Sachs reckons we’re all far too obsessed with the details of individual companies’ carbon footprints, and are overestimating what can be achieved by targeting them.

“What the science actually says, what we know to be true, is these reductions [at the scale needed] require system change, and aggregation of entity-level changes will not get us there,” Sachs told me. “Companies can’t decarbonise when the systems in which they’re embedded don’t.”

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