Companies are increasingly pledging to cut emissions, become climate positive or carbon neutral. Yet historically blanket consensus on how this is measured has been lacking and the terminology varies between sectors and organisations. The Voluntary Carbon Market Integrity Initiative (VCMI) aims to address this with the new Claims Code, which will compare and measure individual claims about corporate climate activities and stem the unverified net zero claims that have become problematic for institutions and investors.
The Voluntary Carbon Markets Integrity Initiative
The Voluntary Carbon Markets Integrity Initiative is a multi-stakeholder platform to help accelerate credible net-zero climate action and drive participation in voluntary carbon markets (VCM). The newly launched Claims Code of Practice intents to rank companies climate credibility using a Gold, Silver or Bronze tier system. The Claims Code of Practice is backed by the British government and supported by the United Nations Development Programme and aims to help investors understand and compare how accurate companies’ climate credentials are based on their actions, targets and carbon offsetting activities.
Although the final version of the code is due to be published in 2023, the provisional first published details show that the new code seeks to make terms used by corporates such as net zero, climate neutral and climate positive more transparent. Under the new code, a company can claim Gold, Silver or Bronze status depending on its measurable progress towards its corporate climate targets for the year, and purchase offsets to go beyond their targets to close the gap and reach net zero carbon as soon as possible.
Tariye Gbadegesin and Rachel Kyte, the Voluntary Carbon Market Integrity Initiative Steering Committee Co-Chairs claim that the new code will help to achieve “the high-integrity framework necessary to mobilize private climate finance through voluntary carbon credit markets—unlocking a critical resource to help secure our planetary future for generations to come.”
The Voluntary Carbon Market Integrity Initiative is building on the benchmarks used to assess corporate climate targets on the journey to drawdown emissions and achieve net zero. In order to prevent global average temperatures rising to dangerous levels as outlined in the Paris Agreement, companies have increasingly been pledging to make their operations climate positive, sustainable or carbon neutral. Yet there is not blanket consensus on how this is measured leading to discrepancies when comparing one companies’ climate action with another.
To address this, the VCMI’s goal is to ensure VCMs make a significant and meaningful contribution to climate action and limit global temperatures from rising to 1.5 ̊C above pre-industrial levels, while also ensuring maximum positive impact of these supporting the achievement of the United Nations Sustainable Development Goals (SDGs).
High-integrity climate action with high-quality carbon offsets
A cornerstone of the Claims Code of Practice is its goal of driving high-integrity corporate climate action that is measurable and quantifiable. The way to achieve this as companies strive to reduce their scope 1, 2 and 3 emissions is by purchasing high-quality carbon offsets to compensate for their unavoidable emissions as they endeavour to become less carbon intensive in their operations over time.
Today, one carbon credit is equivalent to one ton CO2 captured, avoided or removed from the atmosphere. However, many carbon offsets can be effective in affecting positive change as a side effect of their carbon removal or avoidance activities. These are often acknowledged as high-quality carbon offsets. A key indicator of offsets quality in the global voluntary carbon market is the project certification from a registration body. Quadriz carbon offsets are certified under the Voluntary Carbon Standard (VCS) and Climate, Community & Biodiversity Standards (CCB).
The Voluntary Carbon Market Integrity Initiative Claims Code of Practice goes one step further by requiring the purchase of carbon credits representing “beyond value chain mitigation” (BVCM) 2, through which companies contribute to the collective global effort to reach net zero emissions. This means that the carbon credits underpinning VCMI claims are not counted as solely internal emission reductions that a company undertakes to meet decarbonization targets. Instead, these offset purchases must make a contribution to both the company’s climate goals and to global climate change mitigation.
How can the Voluntary Carbon Markets Integrity Initiative Claims Code of Practice be used?
Ultimately, the purpose of the new Code is to provide accessible guidance to companies and institutions on when they can credibly make voluntary use of carbon credits part of their net zero commitments; and ensure the veracity of the claims made by companies about their carbon offsetting strategies.
The wide adoption of the new code will be available resource for companies seeking to make credible, voluntary use of carbon credits and associated claims but will also provide a benchmark for individual and institutional consumers seeking to make climate-friendly purchases to judge their consumer choices more effectively. Moreover, investors and other stakeholders who want to judge the credibility of a company’s climate achievements that including their carbon offsetting activity alongside broader decarbonization efforts.
Overall the Voluntary Carbon Market Integrity Initiative Claims Code of Practice can serve as a robust tool to strengthen the credibility of carbon credit use and associated claims by companies and advance progress towards net zero as a multistakeholder market framework.
