Dozens of stakeholders have signed a joint statement urging companies and organisations to ditch outdated ‘carbon neutrality’ models and replace them with robust alternative approaches to climate action outside corporate value chains that provide much-needed finance without making unsubstantiated claims.
As the climate crisis continues to escalate, companies and organisations must urgently prioritise internal decarbonisation that is ambitious enough to help keep global warming within the 1.5°C limit set by the Paris Agreement. To demonstrate their sense of responsibility, they should also simultaneously fund high-quality climate action beyond their value chains. When done properly, this approach can provide essential funding for activities that offer benefits for both the climate and sustainable development.
For too long, however, companies have relied on outdated “carbon neutrality” models, despite their inadequacy and inaccuracy. For this reason, Carbon Market Watch invited stakeholders from the private sector, academia and civil society to sign up to a joint public statement that emphasises the importance of financing climate action outside an organisation’s value chain using credible and effective alternatives to ‘carbon neutrality’.
Rather than being delineated by a single name (“contribution model”, “Beyond Vale Chain Mitigation”, etc.), these alternatives are, instead, defined by key steps which include calculating and disclosing greenhouse gas footprints, determining a budget for climate action outside a company’s value chain, undertaking due diligence on climate initiatives, and financing said initiatives. Companies should also accurately communicate about the prior steps, clearly separating funding for action outside their value chain from their own internal decarbonisation efforts.
Sign of the times
Nearly 50 signatories have, so far, endorsed the CMW statement, which is still open for endorsement. This shows that a wide range of stakeholders – from NGOs and academia, to companies and carbon market actors – agree with this alternative model and reveals that there is an emerging consensus of organisations which wish to see it implemented.
Two signatories, Gold Standard and Compensate Foundation, both important players in the voluntary carbon market, have also come to the same conclusion in recent publications: it is now time for a different strategy to fund climate action outside the value chain.
With the annual meeting of the World Economic Forum in Davos and the trilogue negotiations on the EU Green Claims Directive on the horizon, where corporate climate action will be on the agenda, Carbon Market Watch encourages companies, governments and all relevant stakeholders to ditch false and misleading ‘carbon neutrality’ models which can hamper and delay the green transition, and embrace credible alternative approaches.
We continue to welcome any company, organisation or individual who backs this alternative strategy to express their support by signing this statement. The sign-on form can be found here.
