UK government shares 6 principles for voluntary carbon markets
The government's guidelines warn against vague claims, such as “carbon neutral,” based on carbon credits bought and retired. Read More
The U.K. government has published six principles for building effective voluntary carbon and nature markets. They explain how companies should use credits, how project developers can create high-quality, verifiable credits and the green claims businesses should avoid.
The Department for Energy Security and Net Zero published this policy paper after a speech from the Chancellor of the Exchequer, Rachel Reeves, in which she noted the launch of the Climate Investment Fund Capital Market Mechanism on the London Stock Exchange and said, “We are building on these foundations to deliver a world-leading sustainable finance framework.”
The six principles
- Additional to decarbonization: Carbon credits should be used by companies in addition to, not in lieu of, cutting emissions from their value chains and following the mitigation hierarchy.
- High quality supply: Project developers should independently verify and validate their credits and always respect the rights of indigenous people and local communities.
- Sustainability reporting: Companies should disclose if they plan to use carbon credits during sustainability reporting. Guidance from the VCMI can help.
- Plan ahead: Companies should share clear targets on how they will cut their Scope 1, 2 and 3 emissions to achieve net zero by 2050 and if the strategy includes carbon credits.
- Green claims: The principles warn companies against making vague claims, such as “carbon neutral,” based on any carbon credits bought and retired.
- Cooperation: Companies are encouraged to help each other understand carbon and nature markets which can be complex and fragmented.
Critics have questioned whether voluntary carbon and nature markets are effective solutions to the climate crisis. Proponents respond that voluntary carbon markets can finance forest conservation, nature restoration and carbon removal and help new mitigation projects get started.
[Learn what’s next in decarbonization, disclosure, nature and more at GreenBiz 25 — our premier sustainability event, Feb. 10-12, Phoenix.]
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