Carbon Offsetting 10 Jun 2024
Unlocking the Voluntary Carbon Market: How VCMI Guides Corporations to Credible Carbon Credit Claims
4 Min Reading Time
The voluntary carbon market (VCM) has seen significant growth in recent years, including a rising number of projects and methodologies. With this progress comes the critical opportunity to strengthen the integrity and transparency of the market, ensuring its long-term success.
At this year’s Climate Week NYC, EcoAct hosted an event for industry experts to discuss latest developments in the VCM, evolving standards, methodologies, and long-term strategies for companies.
The panel featured a diverse group of experts, including Teodora Kaeva (VCMI), Sam Israelit (Bain), Mathilde Mignot (EcoAct), Thomas Blackburn (SustainCERT), and Lorna Ritchie (ICVCM). As moderator of the session, EcoAct North America CEO, William Theisen emphasized the important role of the voluntary carbon markets in corporate sustainable transformation. He identified integrity and trust as the cornerstones for scaling these markets effectively.
Below, we recap four key questions and insights from the panel discussion.
One of the most critical discussions about the future of the VCM centers around strengthening its integrity. EcoAct has been deeply involved in this effort, leveraging over 18 years of experience in the voluntary carbon market. As a founding member of ICROA (The International Carbon Reduction and Offset Alliance), EcoAct has been at the forefront of ensuring that both compliance and voluntary carbon markets maintain robust guidelines. This includes setting clear auditing standards for project due diligence, ensuring transparency, and building trust in the system.
Building confidence in the VCM requires a focus on ensuring high integrity in carbon credits through program governance. Unlike financial capital markets, the VCM lacks regulatory oversight, which has sparked concerns about greenwashing. Therefore, a global understanding of what constitutes high-quality credits is essential. Governments, regulators, and policymakers must work together to integrate standards set by certification authorities such as ICVCM. Progress is happening, with one-third of global voluntary carbon market demand now adopting ICVCM’s standards, the market can better ensure that carbon credits deliver sustainable benefits and adhere to the latest scientific principles.
Developing a long-term offsetting strategy to navigate the supply challenges in the carbon offset market is critical. Companies should focus on high-quality projects and conduct thorough due diligence to ensure alignment with their overall sustainability goals and values. Establishing a carbon offset strategy that extends to 2050 is crucial, as it enables companies to integrate these efforts with their broader decarbonization and adaptation strategies, such as aligning with science-based targets (SBTs).
A well-diversified portfolio approach—balancing different project types, geographies, and methodologies—can further help manage risks and meet both short-term and future needs. For larger organizations, investing directly in projects rather than purchasing credits annually, organizations can mitigate the risks associated with supply volatility and price fluctuations. This approach allows companies to secure a stable, long-term supply of carbon credits and reinforces resilience in their sustainability efforts.
As the market becomes increasingly complex and data-driven, companies must adopt a “trust but verify” approach, ensuring that their investments deliver both environmental and social benefits. To build confidence in the integrity of the market, organizations like Bain have developed stringent criteria to assess the quality of offset projects. In addition, there are companies that are prioritizing long-term investment in high-integrity projects to overcome supply challenges and contribute to a stronger, more reliable carbon market.
Securing internal buy-in is critical for the success of carbon offset initiatives. Corporate leaders must engage stakeholders across the organization, from top executives to operational teams, to build support. Transparency is key— leaders should communicate how carbon offsets fit into the broader sustainability strategy and align with corporate values. Demonstrating the business case for carbon credits, including risk mitigation and potential cost savings, can further strengthen stakeholder commitment.
Purchasing carbon credits has become a rigorous, disciplined, and data-driven process in recent years. Companies are focusing on developing internal standards for evaluating and selecting offsets. Establishing these internal standards not only increases credibility but also helps in securing buy-in from key stakeholders. Companies like Bain lead the way in this new era, showing how strong internal processes can build confidence and ensure alignment with corporate objectives.
Looking ahead to 2025, companies should prepare for significant regulatory and market shifts, including implementation of the Paris Agreement’s Article 6 and the next phase of CORSIA. Panelists emphasized the need to stay informed about evolving regulations and the increasing role of digital solutions in monitoring, reporting, and verifying carbon credits.
SustainCERT, for example, has evolved its verification process by integrating digital monitoring and verification to enhance accuracy, transparency, and efficiency across standards, methodologies, and projects. This shift streamlines the process, making it easier for project developers to manage annual audit cycles and ensure consistent, regular issuance of carbon credits. As a result, businesses adopting these technologies can be better prepared for future market demands and compliance requirements.
Digital verification not only strengthens ISO accreditation but also ensures consistency across project types, making the process more efficient. Furthermore, interoperable systems are being developed to bring together standards, verifiers, and project developers, creating a unified, science-based approach that guarantees high-integrity, sustainable benefits across regions.
The voluntary carbon market is rapidly evolving, and organizations that take a proactive, long-term approach will be best positioned to succeed. By aligning carbon strategies with science-based targets, investing in high-quality carbon credits, and adopting cutting-edge verification processes, companies can build resilience against market volatility while driving meaningful environmental and social impacts.
William Theisen remains optimistic on the future of the VCM. “Strengthening integrity, securing internal buy-in, and anticipating future regulatory changes are essential steps in positioning businesses as leaders in sustainability. As more organizations adopt these practices and align their efforts with global standards, I believe the VCM will continue to grow, offering new opportunities for corporate transformation and climate action.”
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