The world is dangerously close to surpassing the 1.5°C threshold set by the Paris Agreement, and the window to prevent severe climate consequences is closing. To stay on track, the private sector must be urgent and decisive in its decarbonization.
Many companies are already working to reduce emissions within their operations and supply chains, following the mitigation hierarchy, which prioritizes direct emissions reductions. However, some emissions remain unavoidable. This is where Beyond Value Chain Mitigation (BVCM) comes into play. The Science Based Targets initiative (SBTi) defines BVCM as “mitigation action or investments that fall outside a company’s value chain, including activities that avoid or reduce GHG emissions, or remove and store GHGs from the atmosphere.”
Now, with SBTi’s newly released Corporate Net-Zero Standard v2, BVCM is formally recognized as a tool to take responsibility for residual emissions while scaling climate finance. One of the most effective ways companies can contribute beyond their value chains is by supporting and financing high-quality carbon projects. Voluntary carbon markets (VCMs) provide a key mechanism for channeling private sector investment into impactful climate action.
Carbon credits: a critical funding mechanism for meaningful climate action
At their core, carbon credits represent the reduction or removal of one metric ton of CO₂-equivalent emissions. Companies can buy credits from the secondary market through carbon registries or brokers, depending on your volume and quality needs.
High quality carbon credits offer the following major benefits:
- They allow you to take responsibility for unavoidable emissions that can’t be removed from your value chain.
- They serve as a funding mechanism for scaling climate solutions, including nature-based solutions (NBS) and emerging carbon removal technologies that require external investment to reach commercial viability
- They generate co-benefits beyond carbon mitigation, such as biodiversity protection, ecosystem restoration, and positive social impacts for local communities.
High-quality credits also have a ripple effect beyond the direct environmental impact. They can create jobs, enhance biodiversity, improve air quality, and support community-led initiatives.
Ensure integrity: choose high-quality carbon credits
The voluntary carbon market is fragmented and evolving, with varying standards that have historically faced loopholes and were not very conservative when estimating the impact of projects. This has led to inconsistent project efficacy and differences in credit quality, making it challenging to navigate. Understanding which projects truly deliver impact can be complex and bears risks. Some activities may overstate their climate benefits, while others lack strong governance, affecting how funds are used. To mitigate these risks, it’s crucial to invest in high-quality carbon projects that align with robust methodologies, deliver measurable impact, and stand up to scrutiny—ensuring credibility in your climate commitments.
Key characteristics of high-quality carbon credits
The voluntary carbon market is evolving, and new integrity frameworks are helping companies identify high-quality credits that lead to real change.
For example, the Integrity Council for the Voluntary Carbon Market (ICVCM) has introduced Core Carbon Principles (CCPs), a science-based benchmark for ensuring credibility in carbon credits. In addition to the CCPs, leading industry standards like ICROA (International Carbon Reduction & Offset Alliance) and IPCC (Intergovernmental Panel on Climate Change) all aim to uphold integrity in VCMs.
These frameworks all offer helpful guidance for selecting your carbon credits. At a high level though, you should look for credits that are:
- Additional: The emissions reductions must be above and beyond what would have happened without the project.
- Permanent: Projects should ensure that emissions reductions are long-lasting, with safeguards against reversal.
- Verified: Third-party validation ensures accurate measurement and reporting.
- Unique: Each credit should only be claimed once to avoid double counting.
- Supportive of co-benefits: Projects should support broader environmental and social goals, from biodiversity protection to community well-being.
Working with experts can make it easier to navigate the complex market, but you should also be aware of the standards yourself.
The future of corporate climate action
True climate leadership isn’t just about reducing what’s within your control—it’s about scaling impact beyond your business. Companies are increasingly under pressure to act as a positive force for sustainable development, and voluntary carbon markets are an excellent tool for hitting and scaling targets.
As you start to evaluate your sustainability goals and integrate beyond value chain mitigation efforts into your strategy, make sure to procure high-quality carbon credits and work with project developers to invest in projects aligned with your organizational goals. Investing in verified projects reduces your risk of supporting projects with minimal impact and amplifies initiatives that make true climate and community impact.
