Stockholm (NordSIP) – Following a difficult year beset by controversy, international efforts to restore the credibility of voluntary carbon markets (VCMs) continue with the release by the Voluntary Carbon Markets Integrity Initiative (VCMI) of updated guidance for corporate carbon credit claims. The VCMI is a non-profit organisation, formed in the run-up to COP26, which aims to provide companies with guidelines on the acceptable use of carbon credits as part of credible, science-aligned net-zero pathways.
The thresholds relating to the VCMI’s original June 2023 Claims Code of Practice have been amended. The VCMI’s Silver level can now be attained through the purchase and retirement of credits equivalent to 10% – 50% of a company’s remaining emissions once it has demonstrated progress towards near-term emission reduction targets. Moving up to Gold requires the credits to represent 50% – 99% coverage. The VCMI’s Platinum level requirement remains the same at 100% coverage. In a slight change of terminology, the VCMI will now refer to these three levels as Carbon Integrity Claims, which companies can use to advertise actions that go beyond science-aligned emissions reductions under the proposed tagline of “Accelerating global net-zero.”
The VCMI has been collaborating with the Integrity Council for the Voluntary Carbon Market (ICVCM) on the updated code of practice and various other issues in the run-up to COP28. The ICVCM is an independent governance body for the VCMs, which published its Core Carbon Principles (CCPs) in March 2023. The CCPs set out fundamental principles for evaluating the quality of carbon credits, including those that companies can use to achieve Gold, Silver, or Platinum levels with the VCMI.
Limited Scope 3 offsetting introduced
In addition to the amendments made to the Code of Practice, the VCMI has launched a new Scope 3 Flexibility Claim designed to incentivise companies into action on decarbonisation. The initial beta version of the new claim allows companies to make limited use of carbon credits to bridge the gap between its achieved and targeted Scope 3 emissions reductions. To qualify, companies must demonstrate that they are making genuine progress in reducing their Scope 1 and 2 emissions. The use of credits cannot exceed 50% of the company’s annual Scope 3 emissions, must meet stringent quality criteria and their use must be phased out no later than 2035.
After a period of well-publicised and highly damaging controversies, the VCMs will be hoping that these efforts to clarify and broaden the code of practice will help restore confidence in carbon credits as part of an effective net-zero strategy. Commenting on the changes, Laura Clarke, CEO of environmental law charity ClientEarth said: “We know claims that carbon credits ‘offset’ fossil fuel emissions are misleading. The VCMI framework will ensure that companies tell a more accurate story, making clear that it is not a case of ‘either, or’ when it comes to reducing emissions and funding climate action. In a timely response to evolving regulations, particularly the EU’s prohibition of misleading offsetting claims based on carbon credits, the VCMI’s initiative sets a new standard for transparent and impactful climate initiatives in corporate practices.”
Image courtesy of Janine Bolon from Pixabay
Stockholm (NordSIP) – Following a difficult year beset by controversy, international efforts to restore the credibility of voluntary carbon markets (VCMs) continue with the release by the Voluntary Carbon Markets Integrity Initiative (VCMI) of updated guidance for corporate carbon credit claims. The VCMI is a non-profit organisation, formed in the run-up to COP26, which aims to provide companies with guidelines on the acceptable use of carbon credits as part of credible, science-aligned net-zero pathways.
The thresholds relating to the VCMI’s original June 2023 Claims Code of Practice have been amended. The VCMI’s Silver level can now be attained through the purchase and retirement of credits equivalent to 10% – 50% of a company’s remaining emissions once it has demonstrated progress towards near-term emission reduction targets. Moving up to Gold requires the credits to represent 50% – 99% coverage. The VCMI’s Platinum level requirement remains the same at 100% coverage. In a slight change of terminology, the VCMI will now refer to these three levels as Carbon Integrity Claims, which companies can use to advertise actions that go beyond science-aligned emissions reductions under the proposed tagline of “Accelerating global net-zero.”
The VCMI has been collaborating with the Integrity Council for the Voluntary Carbon Market (ICVCM) on the updated code of practice and various other issues in the run-up to COP28. The ICVCM is an independent governance body for the VCMs, which published its Core Carbon Principles (CCPs) in March 2023. The CCPs set out fundamental principles for evaluating the quality of carbon credits, including those that companies can use to achieve Gold, Silver, or Platinum levels with the VCMI.
Limited Scope 3 offsetting introduced
In addition to the amendments made to the Code of Practice, the VCMI has launched a new Scope 3 Flexibility Claim designed to incentivise companies into action on decarbonisation. The initial beta version of the new claim allows companies to make limited use of carbon credits to bridge the gap between its achieved and targeted Scope 3 emissions reductions. To qualify, companies must demonstrate that they are making genuine progress in reducing their Scope 1 and 2 emissions. The use of credits cannot exceed 50% of the company’s annual Scope 3 emissions, must meet stringent quality criteria and their use must be phased out no later than 2035.
After a period of well-publicised and highly damaging controversies, the VCMs will be hoping that these efforts to clarify and broaden the code of practice will help restore confidence in carbon credits as part of an effective net-zero strategy. Commenting on the changes, Laura Clarke, CEO of environmental law charity ClientEarth said: “We know claims that carbon credits ‘offset’ fossil fuel emissions are misleading. The VCMI framework will ensure that companies tell a more accurate story, making clear that it is not a case of ‘either, or’ when it comes to reducing emissions and funding climate action. In a timely response to evolving regulations, particularly the EU’s prohibition of misleading offsetting claims based on carbon credits, the VCMI’s initiative sets a new standard for transparent and impactful climate initiatives in corporate practices.”
Image courtesy of Janine Bolon from Pixabay
