Press Release: Global businesses invited to test world-first voluntary carbon credit Provisional Claims Code of Practice
- Move designed to bring clarity and integrity to burgeoning voluntary carbon market and corporate claims
- Provisional Code supported by leading UN agencies and governments
- Businesses including Google, Unilever and Hitachi to take Provisional Code forward for the next phase of refinement
Leading businesses committed to reaching net zero have been invited today to join other ambitious companies to road-test a ground-breaking new Provisional Claims Code of Practice, aimed at bringing integrity to corporate claims made about voluntary use of carbon credits.
The Provisional Code, which was unveiled this morning at a launch event co-hosted by the VCMI and UK Government, will for the first time provide companies with a globally standardised benchmark for the voluntary use of carbon credits, and provide a way to recognise businesses genuinely going the extra mile.
VCMI’s Provisional Code, which offers recognition to both company-wide climate achievements and the performance of an individual brand or product, will categorise climate claims made by businesses into either VCMI Gold, Silver, or Bronze.
The benchmarks within the Provisional Code set claims in the context of progress made against the achievement of a company’s long-term net zero commitment, plus additional use of carbon credits to go above and beyond their internal decarbonisation goals.
It will now be put out to public consultation and tested by businesses over the remainder of the year, with the next version, expected to be released late 2022/early 2023, enabling companies to use it to support their claims.
VCMI will also partner with target setting, accounting and reporting bodies to ensure consistency with emerging standards and provide a coherent framework for businesses looking to showcase their climate achievements.
VCMI’s ambition is to embed integrity and transparency into the fabric of voluntary carbon markets so that these fulfil their potential to support the goals of the Paris Agreement.
Rachel Kyte, VCMI’s Co-Chair, said:
“The release of the VCMI Provisional Code is a jumping off point for voluntary carbon markets that can work for all. With clarity for business and by business on what is being claimed, we may harness the potential of the markets to help us meet our shared net zero ambitions.
“The Provisional Code enshrines an ethic of continual improvement, which the most recent climate science shows is something we need to internalize urgently.”
The move, which follows months of consultation with government, business, civil society, Indigenous Peoples’ organisations and subject matter experts, marks an important point in the development of the rapidly growing voluntary carbon market.
With more businesses setting climate targets and making claims such as “net zero” and “carbon neutral”, there is a risk that a lack of clarity about what these commitments and claims mean could hinder truly additional climate action and undermine confidence in the voluntary carbon market and wider corporate action.
The Provisional Code aims to provide consumers and wider stakeholders with the information needed to scrutinise carbon credit claims across sectors and hold businesses accountable, helping build trust in the market and ensuring claims are underpinned by real action to reduce greenhouse gas emissions.
UK Business and Energy Secretary, Kwasi Kwarteng, said:
“Market-based solutions are critical to reducing emissions. Today’s guidelines will help companies continue to decarbonise in a cost-effective way, while creating and safeguarding jobs.
“With this new Code, consumers will have greater confidence they are backing companies that are genuinely serious about decarbonisation.”
Today’s announcement marks the beginning of the next phase of reviewing and refining the Provisional Code. Alongside testing by businesses and a public consultation, VCMI will publish recommendations for future governance of the Provisional Code and how claims should be assured. It will also work with governments to establish a clear pathway to regulation.
Kate Brandt, Chief Sustainability Officer, Google, said:
“As we all as a community work to address the climate crisis it’s important that we have standard ways of being genuine in the way we’re reporting on our progress. That’s why we’re really pleased to be partnering with VCMI on the global Code of Practice for the voluntary use of carbon credits by companies and other organisations.
“We’re looking forward to road testing this work and again, huge congrats to VCMI, thanks for all that you’re doing.”
The proposed claims are differentiated by the extent to which a company is on track to meet science-aligned targets for Scopes 1, 2, and 3 and the degree to which it covers its remaining emissions using carbon credits. The hierarchy of claims is designed to provide companies with a clear progression through time.
For every year a company wishes to make or maintain a claim, it must meet a set of Prerequisites designed to demonstrate good corporate practice on climate change (including a public commitment to reaching net zero by 2050, via a science-based pathway) and use a credible third party to verify their progress.
VCMI’s Provisional Code will be launched on Tuesday 7 June 14:30 BST. The report and the global launch event will be available here.
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NOTES TO EDITORS:
- VCMI website: https://vcmintegrity.org/
- VCMI Twitter: https://twitter.com/wearevcmi
- VCMI LinkedIn: https://www.linkedin.com/company/wearevcmi/
- Hyperlinks in the press release will go live by Tuesday 7 June
The Voluntary Carbon Markets Integrity Initiative was launched in July 2021 with co-funding from the UK Government and Children’s Investment Fund Foundation, and supported by the COP26 Presidency and United Nations Development Programme.
The multi-stakeholder initiative focusses on the integrity of use of voluntary carbon markets and what can be done on a global scale to ensure they fulfil their potential to support the goals of the Paris Agreement.
About the Claims Hierarchy
To achieve VCMI Gold, a company must be on track to achieve its next interim target for Scopes 1, 2, and 3 through emissions reductions within its value chain and have covered all (100 percent) remaining unabated emissions through the purchase and retirement of high-quality carbon credits.
To achieve VCMI Silver, a company must be on track to achieve its next interim target for Scopes 1, 2, and 3 through emissions reductions within its value chain and have covered at least 20 percent of all remaining unabated emissions through the purchase and retirement of high-quality carbon credits. The proportion of remaining unabated emissions covered through the purchase and retirement of carbon credits must increase over time in order to retain the claim.
To achieve VCMI Bronze, a company must:
- Be on track to achieve its next interim target for Scopes 1 and 2 through emissions reductions within its value chain;
- Reduce its Scope 3 emissions through a combination of emissions reductions within its value chain and purchase and retirement of carbon credits (up to a maximum of 50% of its Scope 3 footprint) to the level required for its next interim target; and
- Have covered at least 20 percent of all remaining unabated emissions through the purchase and retirement of high-quality carbon credits
- VCMI Bronze is only available up to 2030
Brand, Product and Service-Level Claims
Brand, product, and service-level claims represent achievement across the value chain of a specific brand (a line of products or services), product or service as a company progresses toward its long-term net zero commitment.
To make a net zero certified brand, product, or service-level claim, a company must:
- Meet all prerequisites outlined in Section 2.1/Step 1 for the company as a whole.
- Maintain a publicly available GHG inventory, covering all Scope 1, 2, and 3 lifecycle emissions associated with the division, brand, product, or service, following the GHG Protocol (or equivalent).
- Demonstrate ongoing reductions in the life-cycle emissions and/or emissions intensity associated with the division, brand, product, or service and follow carbon neutrality guidance from a reputable standard (e.g., GHG Protocol Lifecycle Reporting and Accounting Standard, PAS2050, or PAS 2060 for events or products).
- Use high-quality carbon credits (removals, avoidance, and/or reductions) to cover all unabated emissions over the specific time period.
- Comply with all applicable regulations and refer to voluntary achievements that go beyond complying with existing legislation or standard business practice.
- Avoid creating a false impression, hiding trade-offs, and/or overstating the beneficial environmental impacts of activities.
- Demonstrate fulfilment of all above requirements through verification by a credible, independent third party.
About Meridian Institute
Meridian Institute provide the Secretariat for VCMI. Meridian Institute is a mission-driven, non-profit consultancy that has helped our clients and partners develop and implement solutions to complex challenges—big and small, global, and local—for over two decades. We focus on five key services: collaboration, implementation, strategy, research, and philanthropic support. We bring our skills to bear on a diverse range of issues, including climate change, environment and natural resources, agriculture and food systems, forests, health, oceans and coasts, resilience, science and technology, and water. Across issues, boundaries, and systems, our work is a catalyst for powerful impact.
We are an independent philanthropic organisation, with offices in Addis Ababa, Beijing, London, Nairobi and New Delhi. We work with a wide range of partners to transform the lives of children and adolescents.