In this paper, the SBTi considers options for changing its rules about carbon credit use for Scope 3 emission reduction target setting. Published in July 2024, it outlines the limitations and potential routes forward that could help corporates mitigate polluting emissions in their supply chains. NOTE: In 2024, the SBTi’s indecision over Scope 3 emissions prompted debate in the VCM.
Curious about natural climate solutions? Interested in investing but not sure where to start? This report, published by ERM Sustainability Institute; ERM; Natural Climate Solutions Alliance; WBCSD and the Forest Investor Club in June 2024, provides practical guidance to companies and financial institutions to invest in high-integrity NCS projects. Its ultimate purpose is to increase the flow of financial capital into these promising, high-impact solutions.
This research from IETA and AlliedOffsets investigates corporate demand for carbon credits and their potential to help mitigate greenhouse gas emissions. Published in April 2024, it revealed that 81% of companies have not yet set climate targets, highlighting the need to focus criticism and attention on the laggards, not the leaders, of climate action. Those companies that have set targets have exceeded emission reduction goals by an average of 26% for Scope 1 and 2.
What’s preventing corporates from investing in carbon credits? Produced by We Mean Business, Intercontinental Exchange (ICE) and Bain & Company, this report found that many companies would be willing to double their carbon credit investments if doing so was more rewarded and recognised. Published in March 2024, it revealed that 71% of companies find engaging with the voluntary carbon market allows them to decarbonise more and 51% said that the money they invest in carbon credits would be reabsorbed if it wasn’t used for this purpose.
S&P Global offer an overview of carbon credit issuances and retirements until February 2024 in its March 2024 report. Following indecision on Article 6 at COP28 in 2023, it predicts a new era of maturity for the voluntary carbon market. It also discusses the compliance market, predicting that it will experience growth in 2024.
The resource from the Cambridge Institute for Sustainability Leadership (CISL) highlights the importance of private finance in climate and nature solutions. Published in November 2023, it suggests that directing funding to nature-based solutions is currently more cost-effective than investing in tech-based solutions. However, it notes that financing for nature currently lags behind finance for climate.
This report, published by MSCI in November 2023, considers the impact of allowing companies to meet their science-based emission reduction targets using carbon credits. Using detailed modelling, it shows how carbon credits can help those companies who are already on track to meet their emission reduction targets. If just these companies used credits, it would rapidly scale demand.
This report from MSCI finds that companies using carbon credits decarbonise on average twice as fast as those that do not use carbon credits. Published in June 2023, this finding is based on the emissions data of 4,156 companies over five years. It revealed a statistically significant trend that companies using a material amount of carbon credits reduce emissions faster than those that do not. Companies using higher integrity credits were found to be cutting their emissions quicker than those with low integrity credits.
Does investment in carbon credits hinder decarbonization among the world’s largest companies? Published by Sylvera in May 2023, this report responds to media criticism saying that buying carbon credits is an excuse to continue business as usual. It analysed the Scope 1 and 2 emission data and carbon credit purchases of 100 of the largest businesses across different industries. It found that those purchasing credits are cutting emissions by 6.2% each year while those who aren’t are cutting only 3.4%.
This report focuses on an important group of climate stakeholders: consumers. Published by Boston Consulting Group in March 2023, it is insightful reading for businesses looking to understand their clients’ perceptions of carbon credits. This survey, based on 1,320 consumers, found that greater transparency is needed for consumers to engage with carbon credits. It found a willingness among consumers to learn more about carbon credits and to switch brands if one offered offsets and the existing one did not.