There has been increasing pressure on corporates to reduce their greenhouse gas emissions to limit global warming to 1.5 degrees, including from investors through engagement. This has led to many companies committing to achieve net zero emissions. While reducing emissions is an evident priority to limit warming to 1.5 degrees, often eliminating residual corporate emissions is either expensive or not yet technologically feasible. Thus, many net zero commitments either implicitly or explicitly rely on carbon ‘offsetting’: where carbon emitters purchase verified units of greenhouse gas emission reduction or removal to compensate for remaining emissions. Emitters are increasingly turning to the voluntary carbon market to source these carbon offset credits, or developing offset projects themselves, particularly through Nature Based Solutions (NBS).
We have a strong history of active engagement with the companies we hold and those we engage with on behalf of our Reo clients. Here we aim to communicate our perspective on when companies should use offsets, which offsets they should be using, and how companies should use and disclose on their use of offsets. Our principles build on the established quality standards already in the market but aim to raise the level of expectation. Our intention is that we will revisit and revise these principles as the voluntary carbon market evolves.
Interested in learning more? We explore how nature can be a powerful ally in the fight against climate change. Download the full viewpoint to discover more.