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Tag Archives: net zero

Can a global framework authenticate voluntary carbon credit schemes?

The Voluntary Carbon Markets Integrity (VCMI) is a multi stakeholder platform driving initiatives focused on ensuring credible, net zero aligned participation in global voluntary carbon markets. The VCMI developed a global framework to guide the commitment and targets of voluntary carbon credit (CC) schemes. Australia’s voluntary scheme, the Emissions Reduction Fund (ERF) could be guided by this international framework. The ERF provides incentives for a range of organisations and individuals to adopt new practices and technologies to reduce their carbon emissions. Within the scheme one Australian Carbon Credit Unit (ACCU) is earned for each tonne of CO2 stored or avoided by a project. ACCUs can then be sold to generate income, either to the government through carbon abatement contracts, or in the secondary market. The VCMI justify the development of a global framework through claims that the use of carbon credits, such as ACCUs, could hinder the development of greenhouse gas (GHG) abatement action within supply chains and companies, which is essential to reaching net zero targets.

Benchmarking CC claims would help provide clarity for consumers and investors. The many phrases promoting commitments, “carbon neutral”, “”carbon negative”, “carbon free”, “climate positive”, “net zero GHG” or “net zero emissions” targets, make it difficult to identify greenwashing targets against robust, transparent commitments. The inconsistency exposes an element of risk for companies, as overstating climate performance can lead to litigation and fines when commitments are deemed false or deceptive. The purpose of a global code would help develop a clear guide for the use of voluntary CC schemes, positioning CC within a company’s overarching net zero commitments, helping to identify, define and validate a company’s commitments.

The VCMI outlines a code of practice within four steps, with all components assisting organisations in making credible claims about their voluntary use of carbon credits.

> Meet the prerequisites: The VCMI outlines that companies must only use CC “in addition to – not a substitute for science-aligned decarbonisation across their value chains”. Before involvement within voluntary CCs schemes companies must make a public announcement outlining their commitment to reach net zero emissions by at least 2050, which will cover scope 1, 2 and 3 emissions. This commitment must include near term targets and milestone targets as well as following the Science Based Target Initiative guidance for setting the target boundary and emissions coverage.

> Identify claim (s) to make: The VCMI offers gold, silver and bronze statuses. These score commitments based on progress towards its corporate climate targets for a given year and the use of offsets to go beyond those targets.

> Purchase high quality credits: Credits must be associated with a “credibly governed standard setting” body, which must  have environmental quality and must be compatible with human rights.

> Report transparently on the use of carbon credits: Transparent reporting of information regarding the number and type of credits is essential to substantiate the claims.

Although a step in the right direction the VCMIs claims and code depend on a functional and reliable governance and assurance system. Would the adoption of a code work in the Australian markets?  Especially given that the current CC scheme and Clean Energy Regulator have been challenged in the media due to claims of “continuing to lack transparency”?

However successful it may be, a global code of practice could assist in creating a foundation for the credible use of carbon credits and associated claims, helping limit greenwashing, set interim science based targets, and provide transparency. Above all, the scheme is designed to limit the scope of companies using offsets to claim net zero targets. Ensuring that CCs are one element of a greater commitment strategy which includes abatement of carbon emissions.

Equilibrium works across various industries including agriculture, transport and manufacturing to assist in developing emissions reduction schemes. Our carbon management services provide clients a variety of reduction opportunities in exploring carbon abatement within supply chains, providing renewable alternatives as well as carbon offset purchases.

The final version of the standard is expected to be published in early 2023.

Read VCMI’s full Claims Code of Practice

Submit Feedback for the Provisional VCMI Claims Code of Practice

Vote #1 Environment, Promoting Sustainability in Times of Uncertainty

Frequent ‘extreme’ climate disasters, a pandemic and international conflict…the unprecedented has become the precedented. Now more than ever, during times of great uncertainty, governments and businesses must take urgent climate action. This is a wake up call to business, it is startlingly evident that no one is exempt from the impacts of climate change, conflict and Covid. The interconnectedness of commodity markets and global supply chains in our ever-more globalised world, highlighted by the recent energy price shocks and Covid-19 pandemic, will mean flow-on effects will touch every type of business in every location. An intimidating prospect to be sure.

Uncertain times are arguably the best time to change practices and habits. Or better yet, make proactive changes to safeguard and reduce the likelihood of risk before uncertainty. A proactive move now to sustainable practices could minimise the impacts felt by economic disruptions and supply chain collapses due climate disasters, international conflicts and the COVID 19 pandemic. Promoting local manufacturing and trade, incentivising the transition to renewable energy generation and nation-wide targets in line with global leaders of climate action would help to mitigate the inescapable risk of international supply chain collapses, shipping delays, energy uncertainty and economic burden of rising fossil fuel prices.

An opportunity exists, to mitigate these risks, creating a resilient and robust system that is both securing its financial future and remedying past wrong-doings against the environment. The solution to help mitigate climate change is in fact a solution to our future inevitable financial woes. Scientists are still analyzing the correlation of climate change and the severe flooding occurring in New South Wales and Queensland. However we do know that climate change will increase the intensity and frequency of these extreme weather events. There will be huge financial challenges ahead for councils to rebuild their communities, but if we can secure natural assets we can secure markets and future growth. Government and businesses investments in promoting the switch to a cleaner electric vehicle would also mitigate the economic burden felt by rising fuel prices whilst lowering carbon emissions and the use of finite resources. Take a risk lense when looking at sustainability and climate change. For companies,governments and businesses the risk of climate inaction far outweighs the requirements to do something now. What we can see from covid response globally is how easy it can be to adapt.

This time of uncertainty presents some exciting opportunities for all areas of business to make an impact. The sustainability movement is moving beyond the messaging of “please recycle” and “switch off the lights”, to look at core roles within core industries, and how they can impact change. Industry and government need to be change makers and apply a sustainability lense to what they are working through to create benefits that will support business, community and society in these “unprecedented” times. Tangible changes from business and governments such as a switch to renewable energy, creating a carbon management program, changing travel processes, increasing building efficiency, supporting local supply changes can all limit the impacts felt by uncertainty. Funding opportunities and grants are available to businesses, councils and governments to support the progression towards a sustainable economy and society. Our projects at Equilibrium have helped clients deliver impactful changes across a wide range of sectors and service areas. Globalization, industry connections and the broadness of sustainability means impacts are affecting every industry, company and supply chain, everyone has an opportunity to contribute.