The voluntary carbon market (VCM) is not a new concept, but in the world of sustainability, it’s one of the most dynamic and fast-moving sectors. This is despite the VCM facing controversy over claims of potential scams and worthless credits, which calls for greater transparency.
Organizations and standard setters are constantly innovating to meet demands on such transparency, the incorporation of biodiversity and community impact measures and increased reliability of carbon projects.
In 2024 and beyond, carbon markets must be more transparent as businesses ramp up sustainability efforts to lower their carbon footprint and communicate those efforts clearly and reliably to their own stakeholders.
Carbon credit buyers seek reassurance and clear evidence that they are purchasing bonafide, quality credits that will boost their sustainable business practices and compensate for their greenhouse gas (GHG) emissions.
Having recently attended the VCM Forward Look webinar, I discovered that despite the complexities still surrounding carbon markets, there is an abundance of opportunities to be seized.
Carbon credits are continuing to play a major role in emission offsetting, with the carbon markets evolving in alignment with the increasing number of businesses navigating sustainability practices in 2024.
The webinar was hosted by Ben Rattenbury, VP Policy at Sylvera (a data provider which provides access to tools to navigate the carbon markets). The event was attended by a variety of global experts in the carbon market sector: Henning Huenteler, Utkarsh Agarwal, Holly Pearen, and Kerry Liebenberg, who each shed light on their COP28 takeaways and their future vision of carbon markets.
My three takeaways from the VCM Forward Look webinar are:
Authenticity in Sustainability
Businesses must embark on the right sustainability journey, ensuring their intentions align with company values.
Embracing authenticity to avoid greenwashing and greenhushing (where businesses are quiet about their sustainability achievements) is a key component of what organisations should aim for.
By being transparent and sharing best business practices through corporate collaboration, utilising the carbon markets will support a company’s mission and demonstrate its values.Strategic Expertise for Complexity
Closer attention is being drawn towards strategies for developing in-house expertise to navigate the complexities of compliance markets and tax systems.
Markets established by governments or associated bodies have more trading regulations than their voluntary counterpart.
These compliance markets tend to be aimed at the industries renowned for their energy-intensive emissions, such as oil refineries, iron and steel producers, airline companies and power generators. Voluntary markets, on the other hand, function outside of compliance markets, and are not under any direct government or regulatory supervision.
But this market must develop net zero strategies surrounding GHGs before any offsetting is implemented, and different industries face contrasting challenges in this respect.Alignment with Global Initiatives
Global initiatives such as Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) are using collaborative action for implementation of carbon credit purchasing methods.
CORSIA, which is entering the second of its three phases 2024-2026, is accepted as a base standard and best practice for aligning carbon initiatives with global sustainability goals.
There have been greenwashing criticisms amid claims that some offsetting efforts are worthless and offer no benefit (or very little) to mitigate the climate emergency. What are your experiences with carbon markets, and how do you envisage their role in helping achieve a net zero future (whether from a regulatory or voluntary market perspective)?
Please share your experiences below, to help unpack this complex subject, from a commercial point of view and do inform me of any sustainability-related webinars that you would like to draw my attention to.
