London Climate Action Week 2025: Government and business unite to unlock climate finance at scale

This year’s edition of London Climate Action Week (LCAW) brought together thousands of climate leaders to chart the path forward for global climate action. Across numerous sessions, one message rang loud and clear: high-integrity carbon credits in the voluntary carbon market — whether from renewable energy projects, forest conservation, or cutting-edge removal technologies — are no longer “a nice to have”. They are now essential tools in the race to meet our climate goals.

A new era of government leadership

The week’s headline announcement was the launch of the Coalition to Grow Carbon Markets, a landmark government-led initiative spearheaded by the United Kingdom, Kenya, and Singapore, with France and Panama as founding members. The Coalition aims to create shared principles for the use of voluntary high-integrity carbon credits by businesses, bringing consistency across borders and building confidence in the market. If successful, it could unlock up to $250 billion in climate finance by 2050.

This builds on earlier momentum from France, where Minister for the Ecological Transition, Biodiversity, Forests, the Sea, and Fisheries Agnès Pannier-Runacher introduced a Charter outlining responsible use of carbon credits — emphasising that they must complement, not replace, science-based emissions reduction pathways. Major companies, including our parent company Schneider Electric, have already signed on, signalling strong corporate demand for clearer, more credible market standards — exactly what the Coalition is designed to deliver.

To ensure these principles are grounded in global best practice, the Coalition is working closely with the Integrity Council for the Voluntary Carbon Market (ICVCM). As the independent body setting the global quality threshold for carbon credits through its Core Carbon Principles (CCPs), ICVCM plays a vital role in aligning the supply and demand sides of the market. This collaboration helps build the trust and consistency businesses need to scale investment with confidence.

The Coalition’s principles address critical gaps that have held back corporate investment, potentially transforming carbon markets into mainstream climate financing. This aligns with the UK Government’s recent consultation on Voluntary Carbon and Nature Market Integrity Principles, reinforcing policy support for high-integrity market development.

As UK Minister for Climate Kerry McCarthy put it during the Coalition’s launch: investing in high-integrity voluntary carbon projects is not just good climate policy — it’s smart business. For companies already investing, the message is: go further. For those just getting started, now is the time to step up.

Support for carbon markets isn’t limited to the Coalition. The European Commission recently proposed allowing up to 3% of its ambitious 90% emissions reduction target by 2040 to come from international carbon credits. This change reflects the EU’s recognition that high-quality projects in developing countries can deliver global climate benefits while channelling much-needed finance to where it’s most impactful.

The rise of carbon insetting

But carbon credits aren’t the only tool gaining traction. The week also highlighted growing momentum behind carbon insetting — a complementary approach where companies invest directly in emission reduction and removal projects within their own supply chains.

This approach is particularly relevant for companies with agriculture and land-use in their supply chains, where nearly 25% of global emissions originate and where direct investment can deliver both immediate climate impact and long-term business resilience.

Carbon insetting shares with carbon credit projects the ability to deliver benefits beyond carbon reduction. Projects can restore soil health, enhance water retention, support biodiversity, and strengthen supply chains — while addressing up to 68% of a company’s supply chain emissions

Beyond carbon: Connecting the dots

A recurring theme throughout the week was convergence between voluntary and compliance carbon markets, between offsetting and insetting, and crucially, between different carbon solutions. The most effective climate strategies are no longer about choosing one path — they are about combining multiple approaches to maximise impact.

This shift reflects a broader evolution beyond carbon-only thinking. Today’s leading projects deliver multiple benefits — from biodiversity and soil health to community resilience and food security. While robust data and third-party verification remain essential, many climate leaders emphasised something deeper: the need to reconnect. Reconnect people with nature, business with ecosystems, and decision-makers with the real-world impact of their choices. As one participant memorably put it: “Get out of the boardroom and touch grass.” It was a reminder that behind every data point is a real place, with real people, where climate action truly happens.

The business case for action

LCAW 2025 made it clear: voluntary carbon markets have moved firmly into the mainstream. This was evident in the growing collaboration between governments, Indigenous leaders, and businesses to increase private capital flows into local projects. Scaling impact globally will require this kind of partnership.

As we look ahead to COP30 in Brazil, the groundwork laid this week will be critical. For business leaders, the message is simple: the foundations for scaled climate action are being built right now. The question is no longer whether to engage in the voluntary carbon market — but how to do it strategically.

Have your say: How are you using carbon credits in your sustainability strategy?

We are inviting sustainability and climate leaders to share how they are integrating carbon credits into their broader strategies — what’s working, what’s not, and where the real opportunities lie.

If you are involved in shaping your organisation’s climate approach, we would love to hear from you. Your insights will help build a clearer picture of how the sector is evolving and inform best practices across industries.

The survey takes just a few minutes to complete, is entirely anonymous, and all responses are treated in strict confidence.

Take the survey and help shape the conversation on what credible, effective climate action looks like today.

The survey is open until 18 July — don’t miss your chance to contribute.