Companies are being urged to abandon carbon offsetting-based environmental claims and instead adopt a “climate contribution” model, in a new quality standard.
The Voluntary Carbon Markets Integrity Initiative (VCMI) has issued guidelines on how companies should utilise carbon credits as part of their corporate action with high quality.
The recommended approach involves disclosing emissions annually, demonstrating alignment with science-based targets in line with the Paris Agreement and using carbon credits solely for climate mitigation purposes. Claims of “cancelling out” emissions through offsets are discouraged.
The rules, limited to voluntary corporate climate actions, resulted from consultations with civil society, private sectors, indigenous communities, and governments with the aim to establish a standardised method for evaluating the credibility of corporate claims in response to accusations of greenwashing and increasing scrutiny of the carbon offsetting industry.
The VCMI argues companies should purchase high-quality credits from an independent standards body called the Integrity Council for the Voluntary Carbon Market (ICVCM). The ICVCM is expected to release its recommendations for defining “good” carbon credits later in the summer.
“We frame the use of carbon credits our companies might make as contributions above and beyond what they should be doing to decarbonise themselves,” said Mark Kenber, executive director of the VCMI.
“[Claims of carbon neutrality using offsets] were understandably contentious. We’ve taken them off the table for now. We will reconsider them. A lot of companies would like to make them as they see it as a differentiator but it’s probably the area that causes the most confusion. Of course, there are both lawsuits and emerging bits of regulation in the UK and EU. It would be foolish to pre-empt any of that,” he said.
Gilles Dufrasne, a policy officer with Carbon Market Watch, said the time for carbon neutrality claims was over.
“Companies must step up their transparency game and provide real information that consumers can understand. Beyond reducing their emissions, the richest companies have a responsibility to contribute finance to climate action, even in sectors that they are not directly impacting. If the largest and richest companies do not step up to provide the finance that we urgently need, then who will?” he said.
Several organisations, including Nestlé’s KitKat, fast-food chain Leon, and Albert, the sustainability certification for the UK film and TV industry, have already moved away from carbon neutrality claims based on offsets. Other companies, such as Gucci, easyJet, and JetBlue, have also made similar shifts in their advertising due to regulatory crackdowns on climate claims in the UK and EU.
Nestlé has stated that it is shifting away from investing in carbon offsets for its brands and will instead focus on reducing emissions in its supply chain. Similarly, Leon, which previously claimed to sell “carbon neutral” burgers using offsets, will no longer make such assertions in its advertisements.
The company remains committed to becoming carbon neutral by 2030 for scope 1 and 2 emissions. Albert has also dropped its “carbon neutral” stamp and introduced a new logo, while still requiring the purchase of carbon credits for its certification process, which is under review.
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