Leading businesses, including Google, Unilever and Hitachi, have been invited to join other ambitious companies to road-test a ground-breaking new Provisional Claims Code of Practice, aimed at bringing integrity to corporate claims made about voluntary use of carbon credits.
The Provisional Code, which was unveiled at a launch event co-hosted by the VCMI and UK Government yesterday (8 June), will for the first time provide companies with a globally standardised benchmark for the voluntary use of carbon credits, and provide a way to recognise businesses “genuinely going the extra mile”.
VCMI’s Provisional Code, which offers recognition to both company-wide climate achievements and the performance of an individual brand or product, will categorise climate claims made by businesses into either VCMI Gold, Silver, or Bronze.
With clarity for business and by business on what is being claimed, we may harness the potential of the markets to help us meet our shared net zero ambitions.
The benchmarks within the Provisional Code set claims in the context of progress made against the achievement of a company’s long-term net zero commitment, plus additional use of carbon credits to go above and beyond their internal decarbonisation goals.
It will now be put out to public consultation and tested by businesses over the remainder of the year, with the next version, expected to be released late 2022/early 2023, enabling companies to use it to support their claims.
VCMI will also partner with target setting, accounting and reporting bodies to ensure consistency with emerging standards and provide a coherent framework for businesses looking to showcase their climate achievements.
VCMI’s ambition is to embed integrity and transparency into the fabric of voluntary carbon markets so that these fulfil their potential to support the goals of the Paris Agreement.
Jumping off point
Rachel Kyte, VCMI’s Co-Chair, said: “The release of the VCMI Provisional Code is a jumping off point for voluntary carbon markets that can work for all. With clarity for business and by business on what is being claimed, we may harness the potential of the markets to help us meet our shared net zero ambitions.
“The Provisional Code enshrines an ethic of continual improvement, which the most recent climate science shows is something we need to internalise urgently.”
The move, which follows months of consultation with government, business, civil society, Indigenous Peoples’ organisations and subject matter experts, marks an important point in the development of the rapidly growing voluntary carbon market.
With more businesses setting climate targets and making claims such as “net zero” and “carbon neutral”, there is a risk that a lack of clarity about what these commitments and claims mean could hinder truly additional climate action and undermine confidence in the voluntary carbon market and wider corporate action.
The Provisional Code aims to provide consumers and wider stakeholders with the information needed to scrutinise carbon credit claims across sectors and hold businesses accountable, helping build trust in the market and ensuring claims are underpinned by real action to reduce greenhouse gas emissions.
Greater consumer confidence
UK Business and Energy Secretary, Kwasi Kwarteng, said: “Market-based solutions are critical to reducing emissions. Today’s guidelines will help companies continue to decarbonise in a cost-effective way, while creating and safeguarding jobs.
“With this new Code, consumers will have greater confidence they are backing companies that are genuinely serious about decarbonisation.”
Today’s announcement marks the beginning of the next phase of reviewing and refining the Provisional Code. Alongside testing by businesses and a public consultation, VCMI will publish recommendations for future governance of the Provisional Code and how claims should be assured. It will also work with governments to establish a clear pathway to regulation.
With this new Code, consumers will have greater confidence they are backing companies that are genuinely serious about decarbonisation
The proposed claims are differentiated by the extent to which a company is on track to meet science-aligned targets for Scopes 1, 2, and 3 and the degree to which it covers its remaining emissions using carbon credits. The hierarchy of claims is designed to provide companies with a clear progression through time.
For every year a company wishes to make or maintain a claim, it must meet a set of Prerequisites designed to demonstrate good corporate practice on climate change (including a public commitment to reaching net zero by 2050, via a science-based pathway) and use a credible third party to verify their progress.
Kate Brandt, Chief Sustainability Officer, Google, said: “As we all as a community work to address the climate crisis it’s important that we have standard ways of being genuine in the way we’re reporting on our progress.
“That’s why we’re really pleased to be partnering with VCMI on the global Code of Practice for the voluntary use of carbon credits by companies and other organisations.
“We’re looking forward to road testing this work and again, huge congrats to VCMI, thanks for all that you’re doing.”
