Report decries slow progress in voluntary carbon market

THE Climate Board ( TCB) and the Voluntary Carbon Markets Integrity Initiative ( VCMI) have released a comprehensive report shedding light on corporate attitudes toward the voluntary carbon market.

Surveying 145 global companies across various sectors, the report emphasizes the crucial role of broader carbon market participation in achieving ambitious scope 3 emission reduction targets. Key findings indicate that 41 per of respondents have purchased carbon credits in the past two years, with an additional 19 per cent planning to do so by 2030. However, 40 per cent either have no plans to engage or remain undecided. The report highlights significant challenges hindering the scope of three emissions reductions, including the cost of decarbonization, supply chain engagement, and the lack of scalable emissions reduction technologies.

Moreover, 70 per cent of companies suggest that science- based targets become more achievable with a degree of flexibility when utilizing carbon credits, emphasizing the importance of eligibility criteria.

TCB’S research, conducted in phases, has directly influenced VCMI’S Claims Code of

Practice, guiding high- quality carbon credit use. This guidance, updated before COP28, allows companies to make Cison Integrity claims, showcasing efforts to exceed science- aligned emissions cuts.

Additionally, the research contributed to the development of VCMI’S new Scope 3 Flexibility Claim, currently in beta and set to finalize in Q3 this year. This claim aims to accommodate companies making progress toward science- aligned targets but unable to fully meet them, unlocking demand for carbon credits.

The report identified three primary reasons for non- participation in the voluntary carbon market: companies focusing on internal progress toward net- zero commitments, concerns about greenwashing claims, and a need for more standardization or guidance.

The Scope 3 Flexibility Claim, outlined in the beta release, sets clear guardrails, requiring a decline in carbon credit use over time, leading to complete phaseout within 10 years of the first claim or by 2035, whichever is earlier. Companies seeking this claim must meet VCMI’S Foundational Criteria and demonstrate emissions reduction progress within operational control.