VCMI Scope 3 plan risks postponing climate action: think tank
Quantum Commodity Intelligence – The Voluntary Carbon Market Initiative (VCMI)'s proposal to use carbon credits to count towards Scope 3 value-chain emissions could "distract and delay" companies from taking immediate action to cut their emissions, according to a think tank.
The VCMI, which is the main demand-side 'meta-standard' for carbon credits, is currently consulting stakeholders on proposals that companies can until 2038 use offsets to count against Scope 3, value-chain emissions that otherwise aren't accounted for or addressed by companies.
But the proposal has prompted concerns that companies could use the VCMI's proposed 'Scope 3 Claim' to overplay their efforts in cutting emissions or delay tangible action to strip carbon-intensive products from their supply chains.
The New Climate Institute (NEI), a think tank that advocates for stronger corporate efforts to cut emissions, said the VCMI proposal risks three major problems and would erode efforts to eradicate greenwash.
"The VCMI proposal risks further undermining already insufficient levels of corporate climate ambition, potentially reverting to marginal, business-as-usual emission reductions," said the response to the stakeholder consultation, which opened on Monday and will run until October 7.
The VCMI's Scope 3 Claim also risks that companies will be distracted from taking climate action, and allow them to continue increasing their emissions, the not-for-profit organisation added.
Undermine efforts
Moreover, if the VCMI's plan is put into practice, it could undermine efforts of front-runners and disadvantage ambitious companies that have genuine climate strategies, by allowing laggard competitors to overstate their own efforts, NEI said.
"We urge VCMI to abandon the proposal of flexibility mechanisms that are not aligned with – and may even undermine – the promising improvements expected in the SBTi's Corporate Net Zero Standard," NEI said, referring to a parallel initiative to clarify if and how offsets could be counted against scope 3.
In late July, the Science Based Targets Initiative (SBTi) said it is still considering whether or not to allow the use of carbon credits by companies under some circumstances in its Corporate Net-Zero Standard (CNZS).
The SBTi, which is the main arbiter of corporate climate claims, added that more analysis is needed before taking a decision in the fourth quarter of this year.
It set out "initial thinking" on potential changes on Scope 3 target setting in a paper that is out for consultation until 12 September.
Other submissions
Carbon Market Watch, an NGO that isn't keen on many types of carbon credits, said in its submission on the VCMI consultation that Scope 3 claims would allow a "massive overshoot of 25% in corporate emissions".
That's compared with the annual reduction rate of around 4% which is needed between 2020 and 2030 to meet the Paris Agreement's goal of limiting global warming to 1.5°C, the NGO said.
The role of offsets in Scope 3 targets has become an increasingly hot-button issue in climate policy over the last few years.
Advocates of the VCM have lamented the lack of clear guidance from the SBTi on the issue, contending there is no good reason to exclude high-quality credits from contributing to corporate actions on a wider scale.
Meanwhile, the sceptics – including some within the broad church that is the SBTi – have argued that to allow some offset use will fatally undermine meaningful emissions cuts that are essential for companies to meet 2030 and net zero targets.
