New research by Forest Trends’ Ecosystem Marketplace suggests that companies purchasing voluntary carbon credits are more likely to report lower gross emissions year-on-year, and invest more in emissions reductions, than companies not engaged in carbon markets.
According to the report, ‘All in on climate: the role of carbon credits in corporate climate strategies’, companies engaging in the voluntary carbon market (VCM) are reducing their own emissions more quickly than their peers, addressing climate change in their direct operations and throughout their value chains. The median voluntary credit buyer is investing 3x more in emission reduction efforts within their value chain. They do so by investing in emissions reduction activities for their business and operations, including renewable energy consumption and the purchase of Renewable Energy Certificates.
The report also found that voluntary carbon credit buyers are leading when it comes to climate ambition, setting targets to ensure accountability. According to the research, they are 3.4x more likely than non-buyers to have set an approved science-based climate target. They are also 3x more likely to include Scope 3 Emissions in this climate target. This is notable given that Scope 3 emissions constitute the majority (91%) of buyers’ emissions and are the hardest for companies to exert control over (since these emissions are generated by the company’s suppliers upstream, customers downstream, and other companies and organizations in the value chain).
The report was launched today during a virtual Insights Briefing hosted by Ecosystem Marketplace. Speakers discussed key findings from the report and took audience questions. VCMI’s Executive Director, Mark Kenber, spoke during the session and was joined Stephen Donofrio (Managing Director, Ecosystem Marketplace, Forest Trend), Jenny Ahlen (Managing Director, Net Zero, We Mean Business Coalition), Will Turner, PH.D. (Senior VP, Natural Climate Solutions, Conservation International), and Alexia Kelly (Managing Director, Carbon Policy and Markets Initiative, High Tide Foundation).
Mark Kenber, Executive Director, Voluntary Carbon Markets Integrity Initiative, says, “Ecosystem Marketplace’s independent analysis of companies engaging with voluntary carbon markets shows that most buyers are using carbon credits judiciously and as part of a transparent, ambitious, and integrated carbon strategy. This will only accelerate progress towards global climate goals. Sadly, corporate leaders have become reluctant to ‘talk their walk’ about carbon market strategies for fear of being type-cast as green-washers but I hope this report will help dispel mistrust and encourage more CEOs to invest and disclose more about their carbon credit investments.”
Business as usual is not good enough, and this research demonstrates that carbon credits are not the easy answer for corporates who want a quick fix. They have to be part of a credible, science-aligned net-zero decarbonisation pathways.
Companies around the world want to understand how they can use carbon credits in their climate strategies in a way that is accepted by consumers, investors, civil society, government regulators, and policymakers. Providing this understanding is the goal of VCMI’s Claims Code of Practice, which has been developed to give buyers of carbon credits confidence and clarity in their use of associated claims.
‘All in on climate: the role of carbon credits in corporate climate strategies’ has been sponsored by Conservation International, High Tide Foundation, Skoll, VCMI, and We Mean Business Coalition. To read the report in full, visit the Ecosystem Marketplace website: https://www.ecosystemmarketplace.com/