Two leading international efforts to improve the integrity and accountability of corporate carbon offsetting programs have joined forces, unveiling plans to launch a series of new voluntary carbon market standards throughout 2023.
The Integrity Council for the Voluntary Carbon Market (ICVCM) and the Voluntary Carbon Markets Integrity Initiative (VCMI) announced a joint commitment, as they pledged to help ensure firms are able to invest in CO2 offset projects that deliver strong environmental outcomes and are backed by robust accountability and transparency mechanisms.
The two organizations plan to more closely coordinate their work and resources to define best practice and credibility with regards to both the use and sourcing of carbon credits by companies, while stressing that firms should prioritize decarbonization efforts ahead of purchasing carbon offsets, they said.
The move follows long-standing criticism of the carbon offset market in recent years, amid reports some carbon credit projects have not delivered promised emissions reductions and may have even resulted in environmental and social harms. As a result, many firms have become increasingly concerned about the reputational risks of investing in carbon credits, even as they maintain that so-called negative emissions projects have an essential role to play in ensuring net zero targets are met.
Both the ICVCM and the VCMI are among a host of initiatives established in recent years to try to improve standards, transparency and accountability across the market, in the hope that more robust mechanisms for ensuring projects deliver promised emissions savings and carbon removals could help catalyze billions of dollars of much-needed private investment in climate and environmental projects.
However, the proliferation of standards has fueled confusion in some quarters over how businesses can best ensure the projects they fund are credible and are adhering to best practices.
The move follows long-standing criticism of the carbon offset market in recent years, amid reports some carbon credit projects have not delivered promised emissions reductions and may have even resulted in environmental and social harms.
As such the ICVCM and VCMI announced they plan to jointly release new standards and guidance in 2023 and beyond, which they stressed would adhere to and align with existing, well-established corporate climate guidelines such as the Greenhouse Gas Protocol, the Science Based Targets initiative, CDP's reporting platform and the We Mean Business Coalition's "4As of Climate Leadership" guidance.
New convergent industry standards due to be launched this year include the VCMI Claims Code of Practice, due out next week, as well as the ICVCM Core Carbon Principles (CCP) Category-level Announcement expected this summer. The first assessment decisions and labels for CCP-approved carbon credits are expected to be announced later in 2023.
"We have a shared vision of end-to-end high integrity throughout the voluntary carbon market, from the supply of credits, to the markets they trade in, and ultimately how they are used," said Annette Nazareth, chair of the governing board of the ICVCM. "We are joining forces to create a high-integrity voluntary carbon market that delivers real impact at speed and scale. By building an effective, trusted market, we can unlock investment and exponentially increase the positive impact it creates."
Several figures already sit on the board of both initiatives, which have been in close contact since both began their work.
ICVCM was born out of the Mark Carney-led Taskforce on Scaling Voluntary Carbon Markets, which had originally set out to rapidly build a $100 billion carbon offset market after its high-profile launch at COP26 in Glasgow.
However, amid concerns over the environmental credentials of many offsets traded on the voluntary carbon market, the former Bank of England governor's Taskforce disbanded in 2021 and instead turned its focus towards improving the integrity and standards in the market so as to help scale up levels of finance and trading.
As such, the ICVCM was set up in its wake, with a remit to develop standards and enhance transparency over carbon offset projects themselves, as well as plans to establish enforcement powers to tackle bad actors in the market. It brings together scores of global experts, advisers and board members, including Carney as well as several Indigenous Peoples and local community representatives.
The VCMI, meanwhile, is focused more on the demand side of the carbon credit market through the development of standards to improve the integrity of the claims companies and organizations can make when investing in CO2 credits.
The ICVCM and VCMI said they aim to build trust among market participants as well as other key stakeholders, including corporates, investors, governments, civil society, Indigenous peoples and local communities in emerging markets.
Established in 2021, the VCMI is led by co-chairs Rachel Kyte — former CEO of the UN Sustainable Energy for All initiative and former vice president of the World Bank Group — and Tariye Gbadegesin, managing director and CEO of ARM-Harith Infrastructure Investment Ltd.
WWF International's global climate and energy lead Manuel Pulgar-Vidal — who as Peru's Environment Minister previously served as president of the COP20 UN Climate Summit in 2014 — is also a member of the VCMI steering committee.
By coordinating their expertise, resources and influence, the ICVCM and VCMI said they aim to build trust among market participants as well as other key stakeholders, including corporates, investors, governments, civil society, Indigenous Peoples and local communities in emerging markets.
T
Read More
