In the global effort towards climate change mitigation, voluntary carbon markets (VCMs) have emerged as a potential game-changer and a glimmer of hope. These markets offer a unique opportunity to bridge financing gaps, facilitate corporate transitions to Net Zero, and support countries' sustainable development objectives. However, the major challenge for VCMs has been the integrity and transparency of carbon credits.
On 28th June, 2023 the Voluntary carbon markets Integrity Initiative (VCMI) launched its Claims Code that aims to address the critical need for integrity in voluntary carbon markets. The Voluntary Carbon Markets Integrity Initiative (VCMI) is an international non-profit organization with a mission to enable high-integrity voluntary carbon markets (VCMs) to deliver real benefits to environment and avoid hype and claims regarding net zero emissions. After two years of extensive research and stakeholder engagement, the Claims Code published a comprehensive framework for companies, individuals, investors, and governments to navigate the complexities of carbon credits and make credible claims regarding their climate commitments.
The Claims Code emphasizes the need of going beyond business-as-usual practices. Carbon credits should be generated through activities that truly benefit host communities and increase overall greenhouse gas mitigation, rather than merely substituting existing actions. By adhering to high integrity rules, VCMs can earn the trust of stakeholders, attract investments, and unleash their full potential.
The Claims Code operates through a four-step process, ensuring compliance with foundational criteria aligned with the long-term goals of the Paris Agreement. The four steps are;
- Companies must disclose their greenhouse gas emissions,
- Set science-based reduction targets
- Demonstrate progress towards those targets
- Advocate for ambitious climate regulation.
Additionally, companies can make VCMI Claims in three tiers: Silver, Gold, and Platinum, each requiring the purchase and retirement of high-quality carbon credits based on the percentage of remaining emissions ranging from 20 to 100 percent.
To uphold the credibility of claims, the Claims Code has set stringent requirements for carbon credit use and quality. Only credits meeting the ICVCM Core Carbon Principles and VCMI Assessment Framework could be utilized, ensuring they contribute to global net zero goals and drive market integrity.
Third-party assurance plays a vital role in substantiating VCMI Claims. Transparent reporting and disclosure of key information are necessary to validate compliance with the Foundational Criteria and Claim-specific requirements. By providing this assurance, companies can bolster their climate ambition and build trust with stakeholders.
Looking ahead, the Claims Code will continue to evolve, with the development of additional modules, guidance, and provisions for specific sectors and geographies. As VCMI expands, it aims to complement comprehensive climate policy and regulations, emphasizing that voluntary action alone is insufficient to combat climate change. The launch of the VCMI Claims Code marks a significant step toward unlocking the transformative power of voluntary carbon markets. By fostering transparency, credibility, and accountability, this framework has the potential to shape the future of climate action, accelerate the global transition to Net Zero, and ensure a sustainable future for generations to come.