It’s gotten harder to have faith in, trust and rely on voluntary carbon credits. We’ve seen recent controversies surrounding certification and standards bodies and investigations into specific carbon projects. Now there are new questions about the whole concept. Two high-profile examples:
Financial Times reported on a
“draft document seen by the Financial Times and drawn up by a task force convened by UN secretary-general António Guterres says groups should not use carbon credits to offset emissions outside of state-regulated schemes. The UN believes companies should invest in ways to curb their own emissions rather than relying on the multimillion-dollar carbon trading market.”
Bloomberg reported
“The world’s top arbiter of corporate climate goals has described as mostly ‘ineffective’ a financial instrument that’s used by a number of major companies to back up their emissions claims. The Science Based Targets initiative, the de facto global regulator of private-sector CO2 targets, said its review of third-party studies indicates that ‘various types of carbon credits are ineffective in delivering their intended mitigation outcomes.'”
Sustainability leaders, staff and advisors: Executives and clients are sure to see – and be concerned by – attention-grabbing headlines and LinkedIn posts and you need to be ready to respond. The best thing you can do is carefully read source documents on which media coverage relies to go beyond potentially misleading headlines. For example, the Conclusion (page 66) of the “Synthesis report of evidence on the effectiveness of Environmental Attribute Certificates in corporate climate targets – Part 1: Carbon credits” about which Bloomberg reports includes context for the “ineffective” determination vital to understanding its true meaning. Likewise with regard to the one-and-a-half page long “Statement on Evidensia-led systematic literature review to understand the effectiveness of corporate carbon offsetting as an alternative to direct emissions abatement.”
We haven’t seen the UN document referred to by Financial Times, but I’m willing to bet meaningful context and limitations language was left out of the article.
There are valid reasons to question the use and value of voluntary offsets – but don’t rely on headlines alone. Get to the facts/data to defend your company’s position, whether that is staying with offsets or changing direction.
Our members can learn more about offsets here.
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