A global initiative called the Voluntary Carbon Markets Integrity Initiative (VCMI), backed by the UK government, has launched a Claims Code of Practice to assess companies’ claims about their progress towards internal climate targets and their use of carbon offset credits. The aim of the code is to bring transparency and confidence to an unregulated market. Many companies have set net-zero emission targets but acknowledge that they will need to buy or generate carbon credits to offset emissions that they are unable to eliminate from their operations. The Claims Code of Practice seeks to help investors establish whether claims made by companies using carbon offsets are credible.
Under the code, companies in all tiers must make a public commitment to achieving science-based net-zero targets by 2050 and set interim targets on how this will be achieved. Companies in the Platinum tier must buy and retire carbon credits to account for 100% of their remaining emissions, while Gold companies must offset at least 60% and Silver companies at least 20%.
The new standards have been introduced to address the misuse and abuse of terms like “carbon neutral,” “climate neutral,” “net zero,” “net zero aligned,” and “net zero positive” by companies. These terms have often been used with little clarity or consistency.
The use of carbon offset credits has been met with skepticism by green groups who fear that they are being used to paper over a lack of action to achieve actual emissions cuts. There are also concerns about the environmental integrity of some offset projects.
Eventually, companies will need to use offsets that have achieved standards being developed by The Integrity Council for the Voluntary Carbon Market (ICVCM), an independent governance body for the market. These standards are expected to be finalized by the end of the year. In the meantime, companies will be expected to use offsets that meet the existing standards set under the global airline industry carbon offsetting scheme called CORISA.
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