When used with integrity, voluntary carbon markets (VCM) can accelerate climate mitigation and capital flows to emerging economies and contribute meaningfully to the Paris Agreement goals and the UN SDGs. The VCMI Claims Code developed through a global, multi-stakeholder collaborative process that will establish integrity on the demand side of VCMs and pave the way towards regulation. VCMI calls on all large companies to implement the Claims Code and help unleash the full potential of high-integrity VCMs.
28th June 2023 — The Voluntary Carbon Market Integrity Initiative has published its Claims Code of Practice, which will give companies a rulebook to follow for making credible climate claims, helping to build market confidence in how they engage with VCMs. The VCMI is supported by a broad range of international organizations, governments, companies, NGOs and civil society, and the rulebook has been broadly welcomed by climate experts around the world.
The Claims Code fills a critical gap, bringing integrity to the demand side of VCMs. It clarifies the complex landscape of voluntary carbon markets by providing companies with a rulebook for high-integrity voluntary use of carbon credits and associated claims on the pathway to net zero.
Razan Al Mubarak, UN Climate Change High-Level Champion for COP28 comments: “This is a decisive decade and a decisive year for tackling climate change. We are woefully off-track from where we need to be and we need to use all the tools in the box, working at full pace. The voluntary carbon market is one tool that can mobilize the much-needed finance to low and middle-income countries towards climate solutions that will accelerate the net-zero transition. It’s not too late to drive progress, and the VCMI Claims Code released today is a welcome step forward.”
The Claims Code has three tiers of claims that companies can make – Platinum, Gold and Silver, each of which recognizes investment in GHG emission reductions and removals above and beyond corporate action to meet their science-aligned targets. This work will be supported by additional guidance in November 2023, specifically on the VCMI Measurement, Reporting and Assurance (MRA) framework, additional claim tiers and claim names.
The Claims Code consists of four steps that a company must undertake to make a VCMI Claim:
- It must first meet VCMI’s Foundational Criteria, which serve as the backbone of an ambitious and robust climate strategy;
- It must then select which VCMI Claim to make (Platinum, Gold or Silver);
- To make the claim, the company must select carbon credits which meet stringent quality thresholds in line with the Integrity Council for Voluntary Carbon Markets (IC-VCM) Core Carbon Principles (CCPs);
- Finally, the company must disclose information to support its claim and conduct independent validation and assurance in line with the VCMI MRV and Assurance Framework (to be published in November 2023.)
Claims Code developed through an open, inclusive and consultative multi-stakeholder process
The Claims Code is the culmination of over 12 months of road testing by companies, public consultations and multi-stakeholder collaboration, following the publication of the provisional Claims Code in June 2022. The process has been informed by input from leading non-profits, VCMI’s Steering Committee, its high-level decision-making body, as well as guidance from VCMI’s Executive Advisory Group (EAG). These bodies include experienced VCM voices, such as indigenous and civil society leaders, independent net-zero experts, corporate sustainability leads, governments, regulators and academics.
Rachel Kyte, Co-Chair of VCMI’s Steering Committee said: “Voluntary carbon markets bring considerable benefits as part of companies’ net-zero transition and as a means of financing climate transition worldwide. Against a backdrop of recent criticism, we are now at a juncture where only consistent, well-considered global guidance can underpin a high-quality market and stimulate the rapid scaling of corporate use we need. The Claims Code will give greater confidence and develop trust in those who use it. If you build integrity, trust will follow, and trust is the foundation of a high value, high impact market.”
VCMI has worked closely on the Claims Code with other major initiatives driving corporate climate action to ensure there is a robust, clear and integrated framework for companies to follow as they transition to net zero, including: the Greenhouse Gas Protocol (GHGP); Science Based Targets Initiative (SBTi); the Integrity Council for the Voluntary Carbon Markets (ICVCM); and Carbon Disclosure Project (CDP). Its work has also benefitted from the efforts of the We Mean Business Coalition, and emerging government and civil society efforts to accelerate the adoption of climate transition plans.
Maria Mendiluce, CEO at We Mean Business Coalition comments: “VCMI’s Claims Code has created a set of guidance that is ambitious and bold in its vision and will help companies mobilize credible climate finance to reach our global net-zero goals. We are delighted to partner with the Initiative and look forward to supporting companies on their journey to make a VCMI claim.”
Annette Nazareth, Chair of the IC-VCM comments: “VCMI’s guidance on credible claims complements the Integrity Council’s work to establish a global benchmark for high-integrity carbon credits that will give buyers confidence they are funding projects making a genuine impact on emissions. By creating end-to-end high integrity throughout the voluntary carbon market, from the supply of credits, to the markets they trade in, and ultimately how they are used, we can unlock investment at speed and scale for climate solutions that would not otherwise be viable.”
VCMI is also today constituting its Stakeholder Forum with a broad range of participants. The Stakeholder Forum will provide a sounding board for VCMI, helping improve its guidance and shaping the additional modules that will be delivered later in 2023.
A high-integrity VCM can meaningfully contribute to the Paris Agreement goals and the UN SDGs
Much more needs to be done to generate the finance needed to unlock GHG mitigation potential across the world and support the achievement of the UN Sustainable Development Goals (SDGs). VCMs have a key role to play in this, especially in the short-term while robust economy-wide policies and financing mechanisms at the scale needed are put in place. Companies investing in tackling beyond value-chain emissions through high-quality carbon credits is a critical tool to deploy.
Ali Mohamed, Climate Change Envoy in Kenya comments: “Kenya welcomes VCMI’s Claims Code of Practice and its clear guidance to organizations on credible use of high-quality carbon credits, towards net-zero commitments. As we aim to lead in the supply of these quality units, high demand-side integrity will accelerate the flow of carbon finance to all our local communities and foster green economic growth. Our upcoming carbon market regulations will inspire significant investments into impactful voluntary carbon market activities, whilst ensuring strong governance and transparency. We believe the Claims Code will build trust and contribute to international cooperation towards the 1.5 degree goal.”
Now is the time for action: VCMI calls on all companies to implement the Claims Code and help unleash the full potential of high-integrity VCMs.
The Claims Code enables companies around the world to understand how they can use carbon credits in their climate strategies in a way that is accepted by consumers, investors, civil society, government regulators, and policymakers. By following the Claims Code, companies will be able to demonstrate their climate leadership, mitigate potential risks to their reputation, and position themselves to succeed in a world transitioning to a prosperous low-carbon future.
Tariye Gbadegesin, Co-Chair of VCMI’s Steering Committee said: “Integrity is what will make the VCM a powerful tool that gets us to a net-zero world and mobilizes much-needed finance to low- and middle income-countries, faster. Clear and transparent guidance about the voluntary use of carbon credits has been missing. Now that the VCMI Claims Code is available to guide corporate claims made with the use of VCMs and eventually when paired with ICVCM’s Core Carbon Principles guiding supply, market participants have the key ingredients of what we call “end to end” integrity which will enable this crucial market development.”
The Claims Code was unveiled at a virtual event today, where representatives of governments and the official sector, business and civil society discussed the details and contents of the Claims Code of Practice. A recording of the event can be found here [https://vcmintegrity.org/claims-code-launch-event/].
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