The transition to a renewable energy economy relies on transparent, accurate data about where power is consumed and how it is generated. In recent years, some of the world’s biggest power consumers have fought that level of disclosure for fear that it would punch a hole in their dishonest climate claims.
On May 14, the Financial Times reported that the Science Based Targets initiative (SBTi), one of the world’s most influential validators of corporate climate targets, is ready to bend to pressure from major polluters and allow companies to misleadingly claim renewable energy is powering more of their operations than it actually is. SBTi matters because thousands of companies rely on its standards to show investors, customers and the public that their emissions-reduction targets are aligned with the latest climate science.
The REC Loophole Behind “100% Renewable Energy” Claims
The mechanism that allows companies to paper over their fossil fuel consumption with renewable energy claims is the renewable energy certificate, or REC. A REC represents the clean energy attributes of electricity generated from renewable sources.
Under current lax accounting rules, a company can buy or claim RECs tied to renewable electricity generated somewhere else, at some other time, and use them to suggest that electricity it consumed today, in a different place, was renewable. This “annual matching” accounting allows a company to claim “100% renewable energy” across a whole year using only solar, when in reality solar- or wind-only portfolios typically only achieve 40-60% time-matched clean power. The rest of those hours are covered by grid power that likely includes plenty of fossil fuels. That is hardly a strong foundation for a “100% renewable” claim.
This is not just a theoretical challenge to climate progress. REC-driven renewable energy claims are becoming commonplace in corporate sustainability reporting today. In its 2024 Sustainability Report, Amazon claimed that it had achieved a milestone in its climate commitments by matching 100% renewable energy across its global operations. The company hopes a casual reader will interpret that as real, full electricity decarbonization and praise Amazon for climate leadership. Meanwhile, Amazon Employees for Climate Justice, a workers group, estimates that only 22% of its US data centres drew power from local renewable energy sources. To cover up that massive gap between renewable energy sources and the fossil energy that powered the majority of Amazon’s operations, the company utilized certificates generated from renewable projects it enabled.
Why Hourly Geomatching Matters for Renewable Energy Claims
Companies that want to claim climate progress without doing the essential work of aligning their operations with renewable power have an incentive to separate that physical reality from the claims they make about their emissions. The annualized approach to REC accounting enables this separation, but there is a way to update the accounting rules so that renewable energy claims reflect physical reality.
The solution is a rigorous hourly matching system that tests renewable energy claims against real electricity use. Instead of allowing companies to buy certificates for renewable power generated somewhere else at some other time, hourly matching requires those claims to correspond more closely to when and where the company actually consumed electricity. In practical terms, it asks whether a company’s renewable energy claim on paper lines up with power it used in the real world. A company that has a goal of 100% renewable energy and uses hourly matching will source its electricity from local renewables, driving up renewables demand while shrinking the market for fossil-fuel power. That is why, as reported the Financial Times reports, a recent paper in The Electricity Journal found that hourly clean electricity accounting could cut carbon emissions dozens of times faster than today’s looser system.
The slippery corporate counternarrative to hourly geomatching depends on a deceptive trick: recasting accountability as coercion. Under today’s market-based Scope 2 accounting system, companies can use certificates to make renewable and low-carbon electricity claims even when the power they bought does not correspond to where and when they actually used electricity. SBTi’s draft Corporate Net-Zero Standard Version 2.0 (shared for consultation at the end of 2025) pointed in a better direction by proposing stricter rules for physical deliverability and a phased introduction of hourly matching for major power consumers. According to the Financial Times, this is the proposal SBTi is reportedly poised to water down in a major, damaging concession to Big Tech.
Some of the world’s biggest power users have organized politically to block hourly matching rules. For example, Amazon, Apple, General Motors have embraced the “accountability as coercion” argument in their “May not Shall” lobbying effort. The gaping hole in their argument is that the proposed framework is not a requirement that every data centre or operations facility run on renewable energy every hour starting tomorrow. It simply requires that companies stop making renewable energy claims they cannot back up with real-world electricity evidence. Optional evidence means optional integrity, and fully optional hourly geomatching would be functionally keeping the flawed status quo as-is. A fit-for-purpose carbon accounting framework should require climate rhetoric to align with physical reality.
Higher-integrity location- and time-based energy rules have some important proponents in the corporate arena. For example, Google has argued in favour of the more rigorous standard for renewable energy accounting. That said, the wider direction of travel in the corporate arena is concerning, particularly in the context of the artificial intelligence boom. Against the backdrop of growing demand for computing power to support increasingly popular AI tools, the International Energy Agency (IEA) projects that global data centre electricity demand will roughly double by 2030, and that natural gas and coal are expected to meet more than 40% of the additional data centre electricity demand until 2030. The IEA further warns that data centre demand is already a significant near-term driver of gas- and coal-fired power generation.
This is the dangerous carbon cost Big Tech wants to obscure with flawed renewable energy claims based on weak accounting rules. A captured standards framework built around corporate convenience rather than science-based emissions reduction is what allows them to do it.
SBTi’s Credibility Test on Corporate Climate Claims
This fight is about more than SBTi. Playing out in the global standard-setting arena is a test of whether voluntary standards can survive contact with the deep-pocketed companies they are supposed to hold accountable. If major polluters can lobby away requirements for rigorous evidence, then the integrity of the standards themselves comes into question. A standard cannot credibly define corporate climate action if it prioritizes the flexibility of companies to make bold climate claims over the need for science-based emissions accounting.
The weakness of voluntary standards on renewable energy claims has also created a strange tension with emerging regulation as regulators rightly ask harder questions about the robustness of evidence behind corporate claims. The California Air Resources Board (CARB) is considering market- and location-based Scope 2 reporting as part of its corporate disclosure programme, although the methodology is currently in development. In Europe, the Carbon Border Adjustment Mechanism, or CBAM, points even more directly to granular electricity accounting, with hourly matching becoming part of how companies prove lower-carbon electricity use in covered sectors. SBTi should be helping define this higher-integrity approach for regulators, not retreating from it.
Hourly Matching May Be Harder. That Is Not an Excuse for Weak Rules
None of this dismisses the real challenges that come with hourly matching. Companies will need more renewable power procurement options and systems for electricity data tracking and monitoring, to name just a couple. Those are real implementation challenges, but they are increasingly workable and reducing emissions requires us to take them on. Rather than solving those challenges through real investment, many in the corporate arena would prefer to make them disappear by weakening the evidence standard. If a company cannot yet match its electricity use hour by hour, it should say so. What it should not do is use certificates to present fossil electricity consumption as renewable energy claims.
Reaching emissions targets will require a corporate accountability framework based in physical reality. In the case of renewable energy, that means accounting for where electricity is consumed, when it is consumed, and what was actually powering the grid at that time. Companies should be supported to use renewable power from renewable sources, not to buy certificates that turn fossil fuel energy into renewable energy claims.
Renewable Energy Claims Need Real-World Evidence
SBTi has a consequential choice to make. It can hold the line and pursue a high-integrity standard that reveals the true cost of data centre expansion, or it can help major polluters hide their polluting infrastructure behind a fog of accounting tricks.
The public interest is clear. Renewable energy claims should be backed by renewable energy evidence. Anything less is not climate leadership or “science-based.” It is a loophole dressed up as progress.
