Businesses Want More Carbon Market Integrity For Deeper Climate Action

Businesses Wants More Carbon Market Integrity For Deeper Climate Action - Carbon Herald
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A new survey by the We Mean Business Coalition, Intercontinental Exchange (ICE), and Bain & Company reveals a strong desire from businesses to ramp up climate investments, but only with stronger guarantees surrounding carbon market integrity.

Over 180 executives and managers shared their perspectives on voluntary carbon markets. Notably, one-third already utilize carbon credits as part of their net zero plans. 

While independently verified through certification standards, these markets differ from government-backed programs and were valued at roughly $1.3 billion in 2022.

The research identified several key concerns deterring wider participation: potential legal and reputational risks, and a lack of recognition by standard-setters within the corporate net-zero sphere. Businesses expressed a need for more robust frameworks and regulations.

Here’s what the improved transparency could unlock:

  • Double the Newcomers: Participation in carbon credit markets would jump from 22% to 50% among currently non-participating companies.
  • Increased Spending: Existing participants would boost their carbon credit spending by up to 10% within two years.
  • Ambitious Goal Setting: More companies would establish both short-term (up from 32% to 50%) and long-term (up from 37% to 56%) climate targets.

Relevant: Complexity In Carbon Markets To Take Center Stage At This Year’s European Climate Summit

Over 70% of respondents emphasized that carbon credit markets empower their companies to take additional climate action beyond what they could manage independently. 

Further research reinforces this, indicating that companies involved in carbon credit markets decarbonize twice as fast as those who don’t.

Luke Pritchard, Deputy Director, Nature Based Solutions, We Mean Business Coalition, and co-author of the survey report, said: “It’s clear there’s broad consensus among business leaders that climate action is a strategic priority and carbon markets are an essential tool for delivering on global net zero goals.”

“But our survey showed that even more corporate climate finance could be unlocked by improving private sector confidence in carbon markets with robust frameworks that ensure greater integrity, transparency and recognition of companies going above and beyond.”

Read more: New Abatable Report Says Voluntary Carbon Market Is At A Critical Point

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