To get back on track to meet global 2030 and 2050 sustainability targets, Ricardo Bayon explores the important role of the VCM and new research from Ecosystem Marketplace.
9 November 2023 | Imagine you worked for a company where staff were asked to innovate, to bring in new clients, to increase sales, to, in short, make more money and do things better for the company. Now imagine that in that company those people who were trying new things, measuring their successes and failures, and achieving modest gains were punished and called out for not doing enough. All while those who did nothing, who literally sat at their desks, didn’t measure any progress, and continued wasting money as they did before, experienced no repercussions.
How quickly do you think that company would achieve its goals? Not very quickly I would venture. And yet, that is exactly what we are doing with businesses and their climate commitments. Companies that reduce emissions and go beyond those reductions and use offsets are criticized for not doing enough, or even sued, while their peers who are not doing anything, who continue emitting as they always have, not even measuring their progress, get praised (or at least are not bothered). This is no way to make progress.
To get a sense of how dysfunctional the offsets debate has become, all one has to do is read recent criticisms of carbon markets in Bloomberg, the Guardian, the New Yorker, or even Last Week Tonight with John Oliver. The criticisms have been flying fast and furious. It has been a tough year for voluntary carbon markets (VCM). There have been accusations that offset projects aren’t real or as good as they claim, criticisms that offsets are just greenwashing, and even lawsuits – the litany is long.
The effects of this barrage of negativity have been chilling; companies who a few years ago were trying to reduce their emissions have now hit the pause button. Data on activity in the carbon markets indicate that demand has decreased markedly. The thought likely crossing companies’ minds is, “Why bother doing anything if I am likely to be crucified in the press or even sued for my trouble?” It is incredibly discouraging for companies to be leaders in climate action if the leaders get pummeled and the laggards skate on by. And it is certainly heartbreaking to watch.
Now compare this to recent research on how companies that participate in the VCM actually behave. For instance, earlier this month, Forest Trends’ Ecosystem Marketplace launched their report, All in on Climate: The Role of Carbon Credits in Corporate Climate Strategies. Overall, they found that companies buying carbon credits are actually doing more to reduce their own emissions than those who aren’t.
Using available data from thousands of companies, they found that, far from being greenwashing or a distraction, participation in the VCM is a leading indicator of climate action. In other words, companies that participate in the VCM are far more likely to be reducing emissions than their peers. In fact, they spend three times more on emissions reductions than those who don’t participate in the VCM. Not only that, but they are far more likely (3.4 times more likely) to have science-based climate targets, and they are more transparent about their emissions than their peers. This report, and others like it, injects a dose of data and realism into a very fraught space.
In short, companies involved in offsets and the VCM aren’t the worst actors on climate; they are the best of an admittedly slow bunch. But even if it is a bad bunch, as some might argue, how is that bunch going to get better at reducing their emissions if we keep executing the leaders while the laggards bask in their inaction? Let’s not smother what little progress there is.
Far from being sued, corporate leaders need to be supported. They need the creative space to take risks, invest in carbon projects, and develop emissions reductions strategies. They need the VCM. We should be pushing them to do more, not beating them into submission such that they ultimately do less. Indeed, we should be shifting our criticism to the laggards instead. Participants in the VCM are at least trying to do something about climate change and, based on Ecosystem Marketplace’s research, many are even succeeding.
All of this is not to say that offsets and the VCM shouldn’t be criticized. Not at all. We should do better. We NEED TO DO BETTER. In fact, an array of VCM “integrity initiatives” are working hard to come up with ways to do just that. But let’s not cripple or even dismantle this system! It may be, to paraphrase Winston Churchill, “the worst of all possible systems,” but it is better than all the others. I mean, sure, if only we could stop emitting and if only we had functional governments that came up with sensible legislation to address climate change, then maybe all would be great and we could do without offsets or the VCM. But come on, is any of that happening? Who are we kidding? Can we really afford to do without the VCM?
As we approach the critical deadlines of 2030 and 2050, should we really chide corporate leaders for trying to do something when so many of their peers do less than nothing? Is this a good strategy for progress? Can we really afford to shame those who are doing best at addressing this problem? Lord knows that there is already precious little progress in the battle against climate change. Let’s not smother what little there is. There is too much baby in that bath water.
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