A recent report conducted by The Climate Board found that 93% of respondents with developed and set Scope 3 targets are facing critical challenges in reaching their goals. Further, while 70% of global firms acknowledged that the use of carbon credits would likely increase the likelihood that they’d set or maintain their climate targets, only a mere 41% had taken tangible actions to purchase carbon credits as part of their carbon reduction strategies in the past two years.  This report helped inform the release of VCMI’s additional guidance to its Claims Code of Practice (November 2023), particularly the evolution of VCMI Claims, which bring confidence and credibility to the voluntary carbon market.   

25 January 2024, Washington D.C.– The Climate Board (TCB), a leading specialist research and information services firm, and the Voluntary Carbon Markets Integrity Initiative (VCMI) have jointly published a report exploring corporate perspectives on the voluntary carbon market, which highlights the need for wider carbon market participation if companies are to meet ambitious Scope 3 targets. The report, which was developed by TCB with input from VCMI, reflects the participation of 145 global corporations, representing a full spectrum of industries. The report’s insights provided a real-time view of corporate executives’ sentiment, underscoring some of the operational challenges in executing carbon reduction strategies while highlighting the potential that high-quality carbon credits may have in complementing internal abatement initiatives.

The report found that:

• More companies could be participating in the carbon market to provide further climate mitigation: 41% of respondents had purchased carbon credits as part of their carbon reduction strategies in the past 2 years; 19% of respondents had not participated in the carbon market in the same timeframe, but plan to do so prior to 2030; and 40% of respondents either had no plans to participate or were undecided as to when to they might take part in the market.
• Some companies are hesitant to participate in the carbon market: The three primary reasons respondents cited for not participating in the carbon market were that companies 1) were focusing on internal operational progress on meeting net zero commitments before participating, 2) were concerned about greenwashing claims, and/or 3) needed more standardization or guidance around high-quality credits.
• There are critical challenges in reaching scope 3 emissions reductions targets: 93% of respondents that have already developed and set Scope 3 emissions reduction targets are facing critical challenges in reaching their goals.
• Companies said they would be more likely to set and maintain climate targets if provided flexibility in using carbon credits: 70% of respondents said that the use of carbon credits to make progress on a climate target, under specific eligibility criteria to enable a certain degree of flexibility, would increase the likelihood that their company would set/maintain a science-based target.”

The Climate Board’s research was conducted in sequential stages and findings were used to inform and refine VCMI’s Claims Code of Practice (Claims Code), which addresses the use of high-quality carbon credits and associated company claims. Additional guidance to the Claims Code was published ahead of COP28. The Claims Code enables companies to confidently make Silver, Gold, or Platinum claims by using high quality carbon credits to go above and beyond their science-aligned targets, verified under VCMI’s Monitoring, Reporting & Assurance (MRA) framework – channeling finance to mitigate climate change in parallel with their own internal emissions reductions, to meet the 1.5 C temperature goal.

The Climate Board’s research has directly informed VCMI’s new Scope 3 Flexibility Claim. The claim allows a company to make limited use of high-quality carbon credits to close the gap between its estimated Scope 3 greenhouse gas (GHG) emission reduction target level and its current Scope 3 emissions in a given year, as long as it has already taken other steps to reduce its current emissions.

Partnering with TCB allowed VCMI a real-time, independent perspective on the challenges corporate firms face on the ground when it comes to meeting emissions reduction targets. TCB’s research enabled the advancement of VCMI’s core mission: a world on track to achieving net zero emissions by mid-century.

Angela Paulk, CEO of The Climate Board, said:

“As we interviewed executives, we heard a lot about the operational challenges that many sustainability professionals face in meeting regulatory and strategic targets related to climate – as well as their thirst for more information. Such real-time dialogue is key to supporting the evolution of the carbon markets. Our focus on impact – supporting executives with industry-leading actionable insights and best practices – made us the right partner to both capture corporate sentiment and help synthesize the opportunities for VCMI to advance its mission.”

Ana Carolina Szklo, Technical Director – Markets and Standards at VCMI said:

“Through our collaboration with The Climate Board, we’ve delved deep into the complex world of corporate carbon credit practices. The findings underscore a pivotal juncture in our collective journey towards a more sustainable future. As VCMI continues to champion high-integrity carbon markets, these insights not only highlight the challenges but also pave the way for transformative solutions aligned with the Paris Agreement’s objectives. We will continue to forge pathways that not only benefit our planet but also resonate with the aspirations of communities worldwide.”

About TCB

The Climate Board (TCB) is a sustainability partner and network for corporate executives. Membership of TCB provides sustainability executives with both on-demand support and the network’s insights on pressing strategic issues, regulatory change, and implementation. TCB’s global network and cross-disciplinary expertise aim to translate insights into actionable best practices compatible with ambitious climate standards.

About VCMI

The Voluntary Carbon Markets Integrity Initiative is an international non-profit organization with a mission to enable high-integrity voluntary carbon markets (VCMs) that deliver real and additional benefits to the atmosphere, help protect nature, and accelerate the transition to ambitious, economy-wide climate policies and regulation.

To read the entire report follow this link: https://dev.theclimateboard.com/research/vcmi/

Our CEO, Angela Paulk, spoke with The Corporate Activist Podcast about how the business sector is addressing the climate crisis – the key focus of our work at The Climate Board.

In this episode, Angela discusses her career experience across different sectors – ranging from the Peace Corps to multinational financial institutions – and how this impacts her outlook on business sustainability. Regarding her current work with businesses as CEO of The Climate Board, Angela notes: “If you are late to the game in assessing broader sustainability risks in your organization, you will have a competitive challenge.” Here at The Climate Board, we understand the importance of being proactive with regard to climate disclosures impacting companies, and work with our members to determine best practices that are both financially and environmentally sustainable.

This episode also dives into Angela’s background in regulatory governance, the interconnectedness of between business, policy, and the environment, how altruism and business desires intertwine, expectations for COP28, and how to avoid greenwashing, among other topics.

We encourage you to listen at the following link: https://podcasts.apple.com/fr/podcast/the-corporate-activist/id1677375263?i=1000638624022

As always, please reach out to us at operations@dev.theclimateboard.com if you have any questions.

The Climate Board has embarked on an exciting research collaboration with the Voluntary Carbon Markets Integrity Initiative (VCMI). We will be surveying key corporate decision makers, with the aim of collating critical insights into the challenges corporates face in reducing greenhouse gas emissions.  

VCMI recently published its Claims Code of Practice (Claims Code) for voluntary carbon credit claims – a rulebook on credible use of high-quality carbon credits, and associated climate claims, that will accelerate climate action. The Claims Code included three tiers of Claims – silver, gold, and platinum.   

This initiative will help inform how (and whether) expanded carbon-credit eligibility could help corporations overcome barriers and accelerate decarbonization plans. Ultimately, VCMI will leverage our findings to craft additional Claims tiers that both uphold integrity and channel more finance into high-quality climate projects.   

We look forward to sharing more details on the survey results. 

We will be accepting responses until Wednesday 6 September. If you are a corporate decision-maker and/or a contributor to executive discussions regarding carbon markets, or are likely to be such a contributor, please reach out to us at: research@dev.theclimateboard.com

Over the past decade, the market for sustainability software has experienced significant growth, and this trajectory is expected to continue as business stakeholders require companies to provide increased levels of transparency and tracking of sustainability targets. With more than 200 solutions on the market, this market overview aims to highlight some of the most relevant and unique solutions to provide executive level decision-makers with insight prior to incorporating a solution into their company’s organizational infrastructure. Given the pace of new participants and anticipated consolidation in the market, TCB will continue to monitor these solutions and update this analysis regularly.

This market overview includes a list of key decision-making considerations, as well as an overview of 40 of the most unique solutions currently on the market. TCB has focused on solutions identified as top-rated and/or leading and those specialized in certain industries.

Members of The Climate Board can access the full market report here:

Sustainability Solutions Market Overview