Superpollutants: How market mechanisms can pull the emergency brake of climate change

The Voluntary Carbon Markets Integrity Initiative (VCMI) recently shared updated guidance for companies looking to make claims based on the use of carbon credits within broader decarbonization plans. The new additions follow the initial launch of the Claims Code of Practice in June, which outlined the four-step process companies must follow to make a VCMI-approved claim.

The latest updates offer new branding for claims, a beta version of a new claim type, and perhaps most importantly, the Monitoring Reporting and Assurance (MRA) Framework that will serve as the roadmap for meeting the foundation criteria.

These updates move the Claims Code of Practice into an actionable initiative that companies can now leverage as they engage with the voluntary carbon market.

What’s new for the Claims Code of Practice?

A fresh brand for claims:

“Carbon Integrity Claims” will be the new, standalone brand distinction a company can use to demonstrate they have achieved a claim status. On top of new names, the credit purchase threshold for the three tiers have been adjusted slightly from the last iteration:

• Carbon Integrity Platinum: purchase and retirement of credits equal to 100% or more of a company's remaining emissions (previously “VCMI Platinum”)
• Carbon Integrity Gold: purchase and retirement of credits equal to 50% or greater of a company’s remaining emissions (previously 60% or greater, “VCMI Gold”)
• Carbon Integrity Silver: purchase and retirement of credits equal to 10% to 50% or greater of a company's remaining emissions (previously 20% to 60%, “VCMI Silver”)

Detailed framework for meeting claim requirements:

The new MRA Framework holds the meatier details buyers and stakeholders have been waiting for, mapping out the assurance and reporting requirements that must be used to complete the four-step process and setting the tone for the rigor and integrity this process will provide.

Here are some of the most notable inclusions within the MRA Framework:

• Credit purchasing: The original Claims Code stipulated that CORSIA-eligible credits could be used to make a claim until ICVCM finalizes the Core Carbon Principles (CCP) standards and delivers CCP-approved credits. The updated guidance expands the scope of currently-eligible credits to include any carbon credit, so long as the purchasing company can “disclose how existing due diligence processes align with ICVCM’s CCPs”. This shift is meant to help accommodate businesses who already have credit contracts in place for the next two years.
• Setting science-aligned targets: If a company is working towards an official SBTi approved target, they will have a full year to get their target approved.
• Emissions inventorying and reporting: The new requirements for reporting emissions footprints are thorough: in addition to quantifying a business’s footprint year on year, companies must calculate, verify, and report on the difference between their base year and the current year emissions.
• 3rd party assurances: Third-party validation of a business’s work is foundational to VCMI’s MRA Framework. VCMI will allow companies to provide evidence of “previously obtained third-party assurances” to avoid unnecessary or duplicative reporting.
• Financial allocations and governance: Companies must disclose the financial allocation for emissions mitigation across their value chain, including the percentage of annual revenue or expenditures dedicated and earmarked for emissions mitigation.
• Timelines: All claims and assurance must be submitted within nine months of the previous emissions year.

A new option for scope 3 compensation:

VCMI also unveiled a “beta” version of a new claim type, intended to create a valid pathway for companies who haven’t fully reached their scope 3 reduction targets to continue to take action using carbon credits. The proposal suggested companies can use carbon credits to bridge the gap between their most recently reported scope 3 emissions and the expected scope 3 emissions for the same year based on their science-aligned target.

The Scope 3 Flexibility claim will include guardrails to ensure its proper use, such as requiring that scope 1 and 2 targets must be met.

What’s next?

VCMI is now encouraging companies to submit documentation to their Claims Reporting Platform to begin the process of making a claim.