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VCMI Update: There’s New Guidance on How to Offset Scope 3.

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The Voluntary Carbon Markets Integrity Initiative (VCMI) has issued new guidance for organizations buying carbon credits with the intent to offset their footprint, specifically for Scope 3. 

VCMI has announced it has reduced some of their thresholds and floated a new claim concept that would enable carbon credits to be credibly used to meet a portion of an organization’s overall value chain emissions targets. The objective is that this new guidance will foster new private sector climate ambition and enhance the credibility of voluntary carbon credit buying. 

Using the VCMI’s Carbon Integrity Claims branding, companies are able to make Silver, Gold, or Platinum claims to demonstrate their positive climate actions through the purchase of carbon credits to offset what they can’t currently reduce. This certification is contingent on meeting initial Foundational Criteria, which include a mixture of emissions disclosure, setting validated science-based targets, demonstrating progress toward these targets, and public advocacy.

The amendment to this framework comes as some companies stated difficulty in meeting their Scope 3 requirements, specifically within their science-based target goals. 

About the changes.

This is slightly lower from the initial qualification within the framework announced in June which required 20-60% for Silver, 60-100% for Gold, and at least 100% for Platinum.

The objective of reducing the minimum threshold for Silver from 20% to 10% is to incentivize more companies to take climate action and it would increase the number of companies eligible for this claim by around 30%, based on the number of companies that have declared emissions targets to date.

VCMI also unveiled the Scope 3 Flexibility Claim to drive climate action on corporate pathways to net zero. The new claim permits a company to make limited use of high-quality carbon credits to close the gap between its estimated Scope 3 greenhouse gas (GHG) emission reduction target level and its current Scope 3 emissions in a given year, as long as it has already taken other steps to reduce its current emissions. To ensure the claim is not used as an excuse to reduce decarbonization efforts, the Scope 3 Flexibility Claim includes guardrails limiting the total use of carbon credits to 50% of Scope 3 emissions, and only up until 2035.

VCMI’s Scope 3 Flexibility Claim is designed to be accessible to a greater number of corporates than – and provide a pathway to obtaining – the Carbon Integrity Silver, Gold, and Platinum Claims, because it allows companies to only offset a portion of its Scope 3 emissions versus having to offset a portion of all of its scopes (1, 2, and 3). The purpose is to act as an ‘on ramp’ for companies to take action versus thinking it is too difficult to meet the Silver claim threshold and taking no action instead.

Key highlights from the report.

  1. Many companies are far off-track from meeting their Scope 3 emission reduction targets. MSCI Carbon Markets (formerly Trove Research, 2023) analysis found that currently there are 1,286 companies with SBTi 1.5°C targets with data available to the public and of sufficient quality for assessment. 
  2. Of those companies that are on track for Scopes 1 and 2 (589), 50% (293) are on-track for Scope 1, 2 and 3, representing total GHG emissions of 3.2 GtCO2 e. Of these, 68 firms have bought carbon credits. 
  3. The total scope 3 emissions gap is currently around 1.4 GtCO2 e and is projected to rise to over 7 GtCO2e by 2030. Assuming only the firms that are on track to achieve their SBTi-approved Scopes 1 and 2 emissions reduction targets are eligible to use carbon credits to close the gap, this would create a potential demand for carbon credits of 644 million tonnes currently, and 2.2 GtCO2 e in 2030. On the assumption that carbon credits cost $30/tCO2 e, this demand would generate an additional expenditure on carbon credits of $19bn currently and $65bn in 2030. 
  4. 70% of survey respondents said the use of carbon credits under specific eligibility criteria to enable a certain degree of flexibility, would increase the likelihood that their company would maintain a science-based target
  5. 59% of buyers in voluntary carbon markets have reported year-on-year decarbonization success (Ecosystem Marketplace, 2023). Buyers are also 1.3 times more likely to have established supplier engagement strategies, and spend 3 times more on emission reductions activities compared to typical non buyers on average.
  6. 73% of VCMI Stakeholder Forum members agreed that additional claims allowing flexibility on the use of carbon credits when companies are not making enough progress towards meeting their targets is required.

Want to learn more? Click here to access the full report

About the Author

Andre Fernandez

Andre Fernandez Co-CEO Invert leads the Carbon Team

As Co-CEO, Andre leads the internal Carbon team and spearheads Invert’s investment and development of carbon reduction and removal projects as a means to conserve and restore our natural environment. Throughout their careers, the work of the team has resulted in the generation of 55 million carbon credits and the protection of 2 million acres across 25 countries.