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Companies Would Boost VCM Participation if Challenges were Addressed.

Read more in the March 28 edition of Invert Insights.

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A We Mean Business Coalition analysis finds that a lack of recognition and incentivization, coupled with questions over carbon market integrity is holding back corporate climate finance. But if barriers to accessing the VCM were addressed through more rigorous frameworks and regulations, companies would set more ambitious goals. 

The findings from their Accelerating Corporate Climate Finance Through Carbon Markets survey in conjunction with Intercontinental Exchange and Bain & Company, provide a snapshot of what business leaders in North America and Europe think about progress to date toward their emission reduction goals and corporate attitudes to the Voluntary Carbon Market (VCM).

The survey asked respondents to reflect and report on where they stand in terms of readiness to act in a rapidly changing context, what they have learned from their progress to date, and how and where they could be doing more.

Here are a few key highlights about participation in the VCM:

More than 60% of companies purchasing credits indicate that high-integrity, high-value credits incentivize investment in decarbonization.

71% agreed that participation in the VCM allows their company to take additional climate action, which otherwise wouldn’t happen without purchasing carbon credits.

Respondents identified these key challenges they face when participating in the VCM:

  • Lack of recognition of credits by climate goal standards (61%)
  • Unclear rules on making claims and associated risk (59%)
  • Lack of transparency on quality (56%)
  • Complexity of standards/accounting principles (41%)

22% of respondents are likely or extremely likely to begin or resume purchasing credits under status quo conditions, which increases to 50% if these challenges are addressed.

Half of the respondents reported passing on the cost of carbon to their customers at least to some extent.

Read the key findings and access the full report.

Invert Insights.

💡 This survey has captured key issues that need to be addressed by the VCM. By addressing these concerns, the VCM could see a significant, immediate increase in companies participating. Moreover, we would likely see faster progress towards global climate goals as 71% of respondents agreed that participation in the VCM allows their company to take additional climate action, which otherwise wouldn’t happen without purchasing carbon credits.

💡 Standardization and transparency are key factors in ensuring the future success of the VCM and the adoption of carbon credits as a valuable tool in decarbonization. Achieving consensus across the industry will signal to companies that they can feel confident that their investment in carbon credits reflects a meaningful contribution to climate change.

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