🔎 What’s going on?
Last week (on 29 July), a major global initiative, the Voluntary Carbon Markets Integrity Initiative (VCMI) was launched.
🌍 Awesome, what does this mean?
The voluntary carbon markets are where companies, individuals, and governments go to buy carbon credits. This is also known as carbon offsetting and includes projects that either restore nature (such as tree planting) or help communities (by giving access to renewable energy or clean cooking fuel).
The VCMI is a multi-stakeholder platform that is supported by governments and organisations such as the World Economic Forum (WEF), Science-Based Targets Initiative, World Resources Institute (WRI), WWF, and World Business Council for Sustainable Development (WBCSD). A consultation report was published after interviewing over 300 stakeholders.
The main purpose of the VCMI is to ensure that the voluntary carbon markets serve their purpose in achieving the necessary reduction of greenhouse gas emissions required to achieve the Paris Agreement. Initially, there are two priorities for VCMI: promoting demand-side integrity and promoting supply-side integrity and access. The demand side integrity relates to how businesses can make climate claims (such as “net-zero” and “carbon neutral”) that are credible, and more importantly backed by science that can actually reduce greenhouse gas emissions. The supply-side relates to the integrity of the actual carbon credits (so looking into things like...can they be monitored and are they verified? Do they store carbon? How much? and for how long?). The supply-side also includes “access” which relates to country policies that promote and develop carbon credits.
To support these two priorities, the VCMI has proposed ten principles for high integrity corporate climate action:
- Science-based action (ensuring that achieving a 1.5C world is the north star)
- Comprehensive action (climate targets and action are in line with science)
- Equity-oriented action (maximise social benefits)
- Nature-positive action (address nature and biodiversity crisis)
- Rapid action (immediate action is taken in this critical decade)
- Scaled-up action (companies invest outside their supply chains)
- Transparent action (be open about scope, boundary, and use of carbon credits)
- NDC-enabling action (companies contribute to financing flows that enable countries’ Nationally Determined Contributions (NDC) to the Paris Agreement)
- Consistent action (climate action plans are holistic and cover everything from investments, governance structures, lobbying, and advocacy efforts)
- Collective and predictable action (work in partnership with the host country, NGOs, other companies, and communities)
The VCMI has opened its first consultation on the taxonomy of business claims and invites businesses, governments, indigenous people’s groups, academics, community groups, and individuals to respond. Learn more and read the consultation report here.
❓ Why should I care?
The urgency of the climate crisis is clear and evident with the extreme weather now being felt by everyone, including high, middle, and low-income countries alike. And countries and companies are now taking climate action by setting net-zero targets. But how realistic are they? Greenwashing is a term that describes a company or country misleading people to believe that they are doing more than what they are actually doing for the environment. This is usually due to clever marketing tactics such as using confusing terms to explain environmental or social claims.
Non-profit Oxfam has published a new report this week that examines the implications for land and food based on the net-zero targets companies and governments are making. They have calculated that the total amount of land required for planned carbon removal/offsetting commitments could be about five times the size of India. Bearing in mind that land is also used to grow food, which is vital for our survival. This means that greenwashing is a very real possibility for companies and governments. VCMI will play a major part in stamping out greenwashing within the carbon markets.
🚦 Where do we need to be?
The global market for voluntary carbon offsetting has been growing exponentially for more than a decade. The market is currently tiny at just $0.6 billion in 2019, but this figure is set to explode to $50 billion by 2030 and $200 billion by 2050. This growth calls for two things: clear definition and accountability. The VCMI is starting to provide some clear definition on both the demand and supply side of carbon credits which is helpful. Once these definitions are final, it’s likely necessary for regulatory measures to ensure accountability. For example, imagine if project developers were fined for selling low-quality carbon credits, similar to how companies are now fined for misleading shareholders and investors.
👤 What can I do about it?
First and foremost, anyone can respond to the VCMI consultation call - provide feedback and help shape the guidelines that will be released later this year. Learn more and read the consultation report here.
If you are a business that sells physical products, follow the Provenance Transparency Framework and ensure any business and/or product claims are backed up with evidence that’s ideally verified by a third party.
Related: UN publishes Paris style biodiversity plan
Photo credit: Photo by Waren Brasse on Unsplash