How can voluntary carbon markets (VCMs) contribute to corporate net zero climate action? Does it lead to delay on action elsewhere?
- High-quality, high-integrity carbon markets can make a meaningful contribution to the Paris Agreement goals while at the same time contributing to the United Nations Sustainable Development Goals (SDGs).
- Credits should be used in addition to broader decarbonization strategies. To do this, carbon credits should be deployed to tackle emissions that sit outside the value chain of companies (also defined as ‘beyond-value-chain mitigation’ (BVCM)).
- Carbon credits must be used in addition – and not to delay or displace – urgent and deep decarbonization that would otherwise happen today.
- Credits form a critical tool that organizations can utilize to address residual emissions, emissions that are hard to abate, or emissions they haven’t yet been able to remove – e.g., if the technology is not yet available.
What is the VCMI Claims Code of Practice?
- The Claims Code is a rulebook that will bring confidence and credibility to voluntary carbon markets and to claims that involve the use of carbon credits.
- It is the rulebook for organizations navigating the complex landscape of carbon markets, for how they can use and make climate claims involving carbon credits as part of their climate commitments.
- It has been developed to give buyers of carbon credits, their stakeholders and the wider public confidence and clarity in their use and associated claims.
Why do we need a Claims Code?
- VCMs must have integrity, end-to-end, from supply (provision of carbon credits) to demand (purchase of carbon credits) sides to deliver a positive impact for people and planet.
- Until now, there has been no standard for integrity on the demand-side of VCMs. The Claims Code fills that gap, bringing transparency, clarity, and confidence to VCMs as one tool in the climate fight.
- The Claims Code is a rulebook that will bring confidence and credibility to voluntary carbon markets and to claims that involve the use of carbon credits.
How will the VCMI Claims Code address greenwashing?
- The Claims Code of Practice is a rulebook that will bring confidence and credibility to voluntary carbon markets and to claims that involve the use of carbon credits.
- Thousands of companies are making climate commitments, though the vast majority lack the substance or science-alignment that is needed. This risks undermining confidence in the integrity of voluntary carbon markets
- The Claims Code will alleviate concerns about the lack of clarity about what companies’ climate claims mean and if the current use of carbon credits is truly benefiting the planet.
What does it mean when you say the Claims Code in June is operable and assurable?
- Companies can complete all the steps outlined in the Claims Code.
- They will then be able to make a VCMI claim in November when the MRA framework is complete.
- The Framework will include important reporting information to effectively make a VCMI Claim.
Why has VCMI released the Code in June, with more to come in November?
- We have been clear in the build up to, and during, the launch that the publication of the Claims Code in June will be complemented by additional modules and papers which will be released in November 2023.
- The operable Claims Code, launched on 28th June, provides the overall framework and core requirements of users – as such companies can work their way through the process to prepare to make a VCMI claim.
- In November we will release additional modules which will give additional guidance to facilitate and expand implementation of the Claims Code. This will include the VCMI Monitoring, Reporting and Assurance (MRA) framework, additional claim tiers and an “on-ramp” to provide a pathway to VCMI Silver, Gold and Platinum Claims, and further information on claim names.
- We have taken this approach to provide clarity on the Claims Code core framework launched in June without delay, while continuing engagement on the additional guidance to gather input from a broad range of stakeholders through the VCMI Stakeholder Forum.
Will VCMI consider including other Claims tiers – for instance, a bronze tier?
- The Claims Code launched in June includes three tiers – Silver, Gold and Platinum. These tiers are intended to be ambitious, representing action once companies have met their science-based targets or are making progress towards meeting their near-term targets through internal decarbonisation alone.
- We want the VCMI’s Claims Code to act as a positive force for incentivising more companies to take on targets, increase their mitigation ambition and drive more emission reductions faster, while also driving finance to where it is needed most.
- Therefore, we are exploring provisions through additional guidance modules to expand the uptake of the Claims Code. This may include, for example, additional VCMI Claims tiers. This is critical to get right, and the work we are doing through our Stakeholder Forum will be assessing this very carefully.
How long did it take to prepare a thorough Claims Code?
- The Claims Code is the culmination of over 12 months of road testing by companies, public consultations, and multi-stakeholder collaboration, following the publication of the provisional Claims Code in June 2022.
- The process has been informed by input from leading non-profits, VCMI’s Steering Committee, its high-level decision-making body, as well as guidance from VCMI’s Executive Advisory Group (EAG).
- These bodies include experienced VCM voices, such as indigenous and civil society leaders, independent net zero experts, corporate sustainability leads, governments, regulators, and academics.
- We believe, this will pave the way towards improved regulation in the voluntary space that will drive increased action.
Who have you worked with to deliver the Claims Code?
- We have run a collaborative, inclusive global multi-stakeholder process to develop the Claims Code – we have consulted a wide mix of IP&LC and civil society leaders, independent carbon market and net zero experts, corporate representatives, governments, regulators, and academics.
- We have taken the guidance and advice of our Steering Committee and consulted with the 20 members of our Expert Advisory Group (EAG)
- In addition, following the launch of the Provisional Claims Code in June 2022, we had over 130 responses to the subsequent consultation and nearly 70 companies take part in the road test.
- Participants (from 38 countries) in our Country Contact group with knowledge and experience in carbon markets and climate finance have provided valuable insights and perspectives on voluntary carbon markets which has helped shape the Claims Code
How are you different to other initiatives such as ICVCM and SBTi?
- VCMI is independent, but works closely with other initiatives, to bring the climate action landscape together.
- All organizations have specific and important roles to play.
- Greenhouse Gas Protocol (GHGP): provides effective guidance for businesses on how they can measure and account for emissions.
- Science Based Targets Initiative (SBTi): provides methods to establish scientific baselines for emissions reduction pathways.
- Integrity Council for the Voluntary Carbon Markets (ICVCM): is establishing through its Core Carbon Principles (CCPs) a global benchmark that will enable buyers to identify high-integrity carbon credits.
- Carbon Disclosure Project (CDP): provides the global environmental disclosure platform, supporting businesses to report, manage and track progress on their environmental impacts.
What are your plans to work with regulators in regions and countries (to enforce the Claims Code)?
- The VCMI cannot enforce the Claims Code like a regulator but can withdraw the right to use a VCMI claim if it is shown to be used incorrectly.
- All the requirements for making a VCMI claim have to be independently verified and publicly disclosed: this will enable stakeholders – including watchdog NGOs and the media – to judge whether a Claim has been made appropriately.
What are the third-party verifiers for organizations making VCMI Claims?
- Throughout the process of developing the Code, we’ve worked with a wide range of assurance bodies globally. Each metric must be subject to an independent, third-party limited assurance to make a VCMI Claim.
Why does a company choose the category it applies for, rather than applying the best possible and waiting for VCMI to decide what it awards?
- Companies should seek the most ambitious Claim they can and strive for continuous improvement. There are clear distinctions between claims tiers.
What if my business or sector doesn’t meet the criteria for a VCMI Claim?
- The Claims Code currently includes three tiers of VCMI Claims – Silver, Gold, and Platinum. These have been released following the extensive feedback from our road test.
- Nonetheless, the market and regulation continue to evolve, and as such VCMI will continue to release additional modules to the Claims Code (up to November 2023).
- The feedback of the VCMI Stakeholder Forum, which consists of representatives from business, government, academia/research, and civil society, will be an import input to these releases.
- This will allow us to consider ‘on-ramp’ Claims for organizations who currently are unable to make a VCMI Claim, but who have high ambitions and may wish to do so in future.
If a company fails an application, will this be public?
- It is in our collective interests to recognize and reward ambitious action and credible climate claims.
- It is at a company’s discretion if they want to share details of their claim. We will not publicly name companies that have failed to meet the criteria.
Why won’t VCMI allow offsetting as part of its Claims Code?
- In the June Claims Code, we frame the use of carbon credits by companies as contributions above and beyond what they should be doing to decarbonize their businesses – as part of what is called beyond value chain mitigation (BVCM).
- We state that carbon credits cannot be counted towards the achievement of within-value chain emissions reduction targets, but instead the most aspirational VCMI Claims in the Claims Code should represent a contribution to both the company’s climate goals and global efforts to mitigate climate change. We have defined contribution claims within the glossary in the Claims Code.
Why is VCMI not incentivizing the use of corresponding adjustments?
- Corresponding adjustments can play an important role as an ambition raising tool for global mitigation.
- Credits used by companies to underpin a VCMI claim can, but do not need to be associated with a corresponding adjustment. This is because VCMI Claims silver, gold and platinum represent a contribution towards both a company’s climate goals and towards the collective global effort to reach net zero.
- The VCMI Claims Code requires that corporates transparently/publicly disclose whether the carbon credits they have purchased have been authorized/correspondingly adjusted.
