‘No economic or technically viable way forwards’: Ricardo abandons SBTi commitments

UK firm hits decarbonisation wall as abatement cost ‘rises to c.£7000/tCO2e’

UK engineering and consultancy firm Ricardo has “consciously” decided not to renew its official climate targets, blaming the steepening cost of decarbonisation. 

The company revealed on Monday that it had cut Scope 1 and 2 emissions by 80% from their peak, but there was no “economic or technically-viable way” to make further reductions. 

It is required under its Science Based Targets Initiative (SBTi) goal, which it adopted in 2021, to hit 90%.

Ricardo recently ceased trading on the London Stock Exchange after being acquired in October by Canadian professional services giant WSP Global Inc, in a deal reported to be worth £281m. 

In its latest sustainability report it revealed that its “marginal cost of carbon abatement” was now in the region of £7,000 per tonne of carbon. 

“Clearly, the remaining 10% to get to 90% reduction cannot be considered cost effective,” the firm wrote.

“Ricardo has consciously not renewed our commitment to SBTi net zero targets considering the work and the costs revealed over our GHG reduction journey to date,” it explained. 

It highlighted further challenges brought about by a lack of credible carbon credit schemes. 

“This, coupled with unavailability due to cost and scale of the nascent carbon capture and storage industry, has presented transitional risks to reputation and profitability in trying to reach net zero.”  

Ricardo also blamed policymakers who have “pivoted” since the company began its decarbonisation journey in 2016, with “unanticipated regulatory changes in the US and Europe resulting in bifurcation or fragmentation of approaches”. 

It identified business risks to the climate transition, including low market acceptance of clean technologies, and carbon markets failing to drive demand for its green products and services. 

At the time of publication, SBTi had not responded to a request for comment.