In March 2025, Sustainability Roundtable, Inc. (SR Inc) hosted our Q1 Executive Symposium, convening sustainability leaders from over 40 leading companies to discuss critical issues in sustainability leadership. The educational forum turned strategic when our guidance on the Science-Based Targets Initiative’s (SBTi) draft Corporate Net-Zero Standard Version 2.0 grabbed participant attention.
Across the Boston and Denver boardrooms, executives voiced a unified concern: that SBTi’s proposed changes threaten to undermine renewable energy procurement, corporate climate action’s most effective tool. A misunderstanding within seemingly innocuous technical details – R15.2 and C15.2 – will, if uncorrected, compromise SBTI’s climate leadership and one of our best hopes of climate salvation.
The central contradiction in SBTi's draft standard lies between Recommendation R15.2 and Criterion C15.5. The misunderstanding posed by these seemingly innocuous technical details threatens to undermine corporate climate action’s potential to scale clean energy globally.
Recommendation R15.2 correctly recognizes that enterprises should "procure contractual instruments that result in additional renewable energy production, thereby directly contributing to grid decarbonization.” This direction is sound. Clean energy procurements wishing to maximize decarbonization impact must focus on causing new clean energy capacity.
While R15.2 is the correct destination, it is directly undermined by the very criterion supposed to advance it: Criterion 15.5.
How? Criterion 15.5’s “possibility test” asserts that companies gain credit for "contribution to zero-carbon electricity in other grids” only “where sourcing zero-carbon electricity within the grids in which the company powers its operations is not possible.” Moreover, C15.5 further errs in confining out-of-grid contributions to zero-carbon electricity as only “an interim measure to address the corresponding portion of Scope 2 emissions.” Enterprises must often aggregate their demand across grids to achieve the scale required to participate in the most impactful energy procurement processes, not to mention maximizing their emissions reductions by transacting in the grids that have most to gain from new clean energy capacity. Ignoring these realities minimizes enterprises’ practical ability to influence grid composition, compromising R15.2’s intent.
The contradiction between the Recommendation’s intention and the Criterion’s demand stems from the climate action community’s failure to distinguish between EAC procurements that cause new clean energy and procurements that merely trade credits from existing facilities. On page 58, SBTi analysts ground their rationale in multiple journal articles to conclude that “the use of unbundled renewable energy certificates (RECs) and guarantees of origin (GO) certificates often fails in driving renewable energy deployment.” However, those cited articles–while quantitatively impressive–are logically flawed.
The sounder truth is that unbundled REC procurements never deliberately cause new clean energy. But the great news, which SBTi misses, is that there exists a deliberate, repeatable, readily scalable EAC procurement process that always causes the development of new clean generation capacity.
Before conscientious decarbonizers focus on the temporal and locational characteristics of Energy Attribute Certificates (EACs), they must first ask a more fundamental question: Did the EAC procurement actually cause the generation capacity that produced it? Locationally and time-matched EACs alone do not decarbonize any grid unless their procurement aligns with the causation criteria recommended by SBTi’s Recommendation 15.5.
Fortunately, market participants express a broad consensus on what constitutes Purchaser-Caused (PC) EACs. As SR Inc has explained in Utility Dive and pv magazine USA, a procurement process can confidently be said to have caused new renewable energy capacity if it meets three criteria:
When these conditions are met, the resulting EACs can be credibly represented as having caused incremental clean energy capacity.
If SBTi’s Net Zero Standard v2 formally recognized PC EACs, it would catalyze the transformation of electricity generation globally by providing a clear and actionable standard for market participants. Adopting SR Inc’s three-part test as the preferred criteria for SBTi Recommendation 15.5 would significantly advance the global scaling of clean energy. It would simplify the identification and documentation of procurement standards, accelerate the adoption of best practices, and help align the social and commercial premiums necessary to drive the rapid development of clean generation capacity before 2030.
Scaling clean energy represents the brightest spot on the darkening horizon of human-caused climate and environmental breakdown. COP28’s UAE Consensus highlights the urgency of “Tripling Up” renewable energy deployment to meet the Paris Agreement’s 1.5°C target. Utility-scale solar, wind, and battery projects are vital to this necessary goal. SBTi’s Criterion C15.5 threatens to extinguish this vital light.
How? By invalidating vitally important (and, to date, always building) cross-grid transactions, C15.5 reduces enterprises’ ability to conduct VPPAs–a long-term transaction (regularly 15 years in the U.S. and 10 years in the EU) representing one of the most influential sectors of the clean energy market. According to the Clean Energy Buyers Association’s deal tracker, VPPAs have caused well over 100 GW of new clean energy in the U.S. They are also one of clean energy’s most rapidly growing sectors: in 2023, they represented 59.2% of 2023 Power Purchase Agreements. Plus, business innovations mean the transaction’s potential only grows: SR Inc’s VPPA 2.0 climate finance mechanism has already caused over 1 GW of new clean energy capacity, with global potential for Terawatts of new generation capacity.
By undermining cross-grid VPPAs, SBTi undermines every enterprise’s ability to speed the development of new clean energy capacity that can meaningfully change grid compositions worldwide. The stakes could not be higher, and SBTi’s constructive leadership could not be more crucial. We need your help convincing them how and why catalyzing corporate action is essential to this existential, global challenge.
SBTi is uniquely positioned to advance its Recommendation 15.2 by enabling the scaling of cross-grid, long-term virtual power purchase agreement (VPPA) markets—mechanisms already driving gigawatts of new clean energy projects worldwide. By strengthening this framework, SBTi can empower corporations to lead in meeting COP28’s UAE Consensus, which recognizes that our best chance to stay within the ecological limits identified by the Paris Agreement is to “Triple Up” the deployment of clean energy by 2030.
With 56 months on that clock, we have no time to develop and deploy new technological systems, and in-grid decarbonization alone cannot achieve the required scale. That combination makes long-term, cross-grid VPPAs critical: they provide the revenue assurance needed to scale clean energy capacity rapidly, with existing technology.
The current SBTI Net Zero Standard allows for market-based accounting of reductions across grids within North America or across grids within the European Union’s Association of Issuing Bodies (AIB). But SBTi’s proposed standard invalidates this commercially winning and accelerating approach. If adopted without change, it can reasonably be expected to catastrophically collapse heretofore growing corporate procurement causing new clean energy capacity and avoidably devastating our best chance to stay within the ecological limits recognized in the Paris Accords. Join SR Inc in accepting SBTi’s invitation to consult on their new Corporate Net Zero Standard and help them understand why and how their Recommendation R15.2 can best be supported by their new criteria.
We know that the SBTI’s committed analysts do not want to extinguish the brightest light on the darkening horizon of human-caused climate breakdown. We urge SR Inc’s Member-Clients and the broader community of concerned Corporate Sustainability leaders to help SBTi lead the fight against the worst impacts of the climate crisis. Their revised standard, now open for public consultation, will help shape how enterprises worldwide set and achieve decarbonization targets–or be rejected by scores of global corporations furious that years of work helping to scale clean energy will collapse from a technical misunderstanding. Your participation, aligned with your peers, could make the difference.
With your input and consultation, we can help SBTI to adjust its new Net Zero Standard criteria to explicitly enable, rather than undermine, its R15.2 recommendation to procure contractual instruments that cause new renewable energy projects. SBTi’s decision on this critical matter will demonstrably affect the scale and success of its ultimate contributions to global efforts against SBTi’s human-caused climate breakdown.