All a Part of the Process
The carbon market's growth pains are necessary, although painful.
Gucci has been one of the highest-profile companies making strides toward carbon neutrality.
Spending millions of dollars on carbon offsets, the company announced it had achieved carbon neutrality in 2019.
Now they’ve removed the claim from their website.
Certain corporations have started feeling the pressure from The Guardian’s hit piece on REDD+ carbon offsets from January 2023.
We’ve seen the same shift in strategy from Nespresso (a Nestle brand) and EasyJet.
Multiple large brands are now avoiding offsets over poor optics.
While Verra is continuously improving their methodologies, and many of The Guardian’s claims were debunked…
This will have a lasting impact on the public’s view of the carbon sector.
At the end of the day, this is all a part of the process.
To combat the “wild west” perception of the voluntary carbon markets (VCM) as they currently stand…
We need more regulation, more oversight, more safeguards.
This is where the new Core Carbon Principles and the VCMI Claims Code of Practice come into play.
These guidelines were developed by the Integrity Council for Voluntary Carbon Markets (ICVCM) and the Voluntary Carbon Markets Integrity Initiative (VCMI) respectively.
Both organizations are made up of a variety of interested parties in the VCMs:
Carbon industry experts, indigenous community leaders, NGOs, scientists, carbon experts, and more.
What safeguards have they put in place?
Core Carbon Principles
The Core Carbon Principles outline ten rules that carbon projects should follow:
Emissions Impact
Additionality
Permanence
Robust quantification of emissions reductions and removals
No double counting
Governance
Effective governance
Tracking
Transparency
Robust independent third-party validation and verification
Sustainable Development
Sustainable development benefits and safeguards
Contribution to net zero transition
These are many of the same principles I went over in this video.
All of these factors will be verified by an increasing number of regulatory bodies.
This will make it increasingly difficult for any level of fraud to occur.
And that doesn’t just apply to the carbon projects.
VCMI Claims Code of Practice
The VCMI Claims Code of Practice will have a similar effect on companies looking to make carbon reduction targets through offset usage.
A company must follow these guidelines to quality to make a carbon neutrality claim and receive approval from VCMI:
Maintain and publicly disclose an annual greenhouse gas emissions inventory.
Set and publicly disclose validated science-based near-term emissions reduction targets, and publicly commit to reaching net zero emissions no later than 2050.
Demonstrate that the company is on-track towards meeting a near-term emissions reduction target and minimizing cumulative emissions over the target period.
Demonstrate that the company’s public policy advocacy supports the goals of the Paris Agreement and does not represent a barrier to ambitious climate regulation.
Interested companies can then choose which tier of claim to make under the VCMI’s jurisdiction.
All credits purchased toward these goals must follow the Core Carbon Principles rulebook.
You can see the full VCMI guidelines here.
While the establishment of these independent oversight committees is crucial to the development of this sector… there is still plenty of interest in quality projects. Extra rules or not.
Klimat X (KLX), one of the only public carbon project developers, recently signed a binding commercial agreement with an unnamed Fortune 100 company to pre-purchase offsets from the company’s rewilding project in Sierra Leone.
Offsets from the first 5,000 hectares of this reforestation project were bid on by sixteen different interested parties, many of them Fortune 500 companies.
And Sierra Leone isn’t exactly known as one of the most geopolitically safe jurisdictions in the world.
Granted, this is not a REDD+ project, which Klimat X’s management has noted they avoided over previous scrutiny.
With that said, there’s still plenty of interest in the carbon sector.
Many large institutions realize that they will not reach carbon neutrality without offsets, even if radical environmentalists detest the idea.
It will take time for the VCMs to reach mainstream acceptance, but this is all a part of the process.