New VCMI guidance risks justifying carbon offsetting and delaying real corporate climate action, NGOs say

The Voluntary Carbon Markets Integrity Initiative (VCMI) [1] has published new guidance for companies on Scope 3 emissions (indirect emissions from a company’s value chain) [2]. It allows a company to rely on carbon credits to claim progress towards their climate targets until as late as 2040 — a date with no basis in science and an approach that could disadvantage frontrunners and be used by others to mask climate inaction.

The only way for companies to truly decarbonise is to reduce emissions at their source. If they are allowed to offset their emission gaps through carbon credits for the next 15 years, as the VCMI approach suggests, it risks enabling them to avoid the harder work of actually reducing their Scope 3 emissions. Reducing emissions should happen today, not in a decade, the NGOs say.

Reducing emissions is hard — but necessary

Reducing emissions at their source is the only credible pathway to net zero, NGOs and scientists say [3] [4] [5]. Carbon credits can shift focus and resources away from direct emissions reductions, weakening incentives for companies to reduce their Scope 3 emissions [6]. Delaying real action for over a decade will only intensify the impacts of the climate crisis while allowing companies to falsely claim climate leadership.

Allowing carbon credits in Scope 3 does a disservice to companies that are taking real steps to reduce their emissions. Under VCMI’s new guidance, there might be no obvious difference between the claims of companies that are leading the way in emissions reduction and those simply buying carbon credits to avoid having to reduce emissions.

Quotes

Thea Lyngseth, Programme Officer at ECOS — Environmental Coalition on Standards, said:

It’s a huge task for companies to reduce their Scope 3 emissions, that’s why they need help doing it. Carbon credits don’t meet this need. Emissions don’t just disappear into thin air — and they shouldn’t disappear in data either. Investing in carbon credits for Scope 3 instead of reducing emissions at their source only delays real climate action, as well as wasting companies’ time and resources.

Thomas Day from NewClimate Institute, said:

The VCMI Scope 3 Claim risks dialling back the already insufficient levels of corporate climate ambition. We believe it is highly likely that the Scope 3 Claim could mislead investors, consumers and regulators, allowing companies with ambitious-sounding emission reduction targets to actually continue increasing their emissions in the short-term. This could disadvantage ambitious companies with genuine climate strategies by allowing laggard competitors to exaggerate their own efforts.

Niels Debonne, Senior Policy Officer at Milieudefensie, said:

Corporate climate action in accordance with the Paris Agreement implies steep emission reductions across all scopes. Carbon credit schemes are a false solution: they consistently fail to deliver their purported climate benefits, while causing real harm to people and biodiversity. Claims that rest on carbon credits will be built on shaky foundations, and will not pass the scrutiny of civil society, regulators or courts.

Lindsay Otis Nilles, expert on global carbon markets at Carbon Market Watch, said: 

VCMI risks undermining its own credibility by allowing companies to present themselves as climate leaders while, in reality, falling behind on their commitments and potentially even increasing their indirect (Scope 3) emissions. Offering a pathway that rewards appearance over real action not only weakens trust, but also delays the urgent transformation the climate crisis demands.

Notes to editors

[1] VCMI, the Voluntary Carbon Markets Integrity Initiative, is a platform that provides services for companies and other stakeholders on purchasing carbon credits. It develops methodologies and criteria with the stated goal of helping to define what a high-quality carbon credit is.

[2] VCMI’s new guidance: https://vcmintegrity.org/scope-3-action/

[3] https://www.nature.com/articles/s41467-024-53645-z

[4] NGO joint letter, July 2024, ‘80+ civil society organisations reject the use of carbon offsets’: https://ecostandard.org/publications/joint-statement-80-civil-society-organisations-reject-the-use-of-offsets-to-meet-corporate-climate-targets/

[5] NGO joint letter (April 2024), ‘Open letter on the use of carbon credits to meet scope 3 GHG targets’: https://carbonmarketwatch.org/publications/open-letter-on-the-use-of-carbon-credits-to-meet-scope-3-ghg-targets/

[6] Beyond this issue, scientific literature on the topic has shown significant quality issues with carbon credits. See: Systematic assessment of the achieved emission reductions of carbon crediting projects | Nature Communications

In addition, there have been cases where projects generating carbon credits have had negative impacts on human rights. See: Voluntary carbon market has failed the human rights test | Environment | Al Jazeera

Further reading

• Carbon Market Watch article (September 2024), ‘VCMI’s new framework needlessly endangers its credibility’: https://carbonmarketwatch.org/2024/09/02/vcmis-new-framework-needlessly-endangers-its-credibility/
• NewClimate Institute article (September 2024), ‘VCMI’s revised Scope 3 proposal could distract from and delay immediate climate action, undermining front-runners’ efforts’: https://newclimate.org/news/vcmis-revised-scope-3-proposal-could-distract-from-and-delay-immediate-climate-action

Contact

Alison Grace, Senior Press & Communications Manager at ECOS – Environmental Coalition on Standards: alison.grace@ecostandard.org, +32 493 19 22 59

Katarzyna Krok, Communications Manager at ECOS – Environmental Coalition on Standards: katarzyna.krok@ecostandard.org

Thomas Day, NewClimate Institute: t.day@newclimate.org, +49 30 208 492 742

Niels Debonne, Senior policy officer at Milieudefensie: niels.debonne@milieudefensie.nl, +31685707507

About

ECOS – Environmental Coalition on Standards is an international NGO with a network of members and experts advocating for environmentally friendly technical standards, policies, and laws around the world.

NewClimate Institute is a non-profit think tank based in Germany, supporting research and implementation of global climate action. Our flagship projects such as the Climate Action Tracker and the Corporate Climate Responsibility Monitor are internationally recognised and followed.

Milieudefensie (Friends of the Earth Netherlands) is a Dutch environmental NGO with over 100,000 members and donors. Milieudefensie campaigns for climate justice and Paris-aligned, transparent and high-integrity corporate climate action.

Carbon Market Watch is an independent, not-for-profit watchdog and research organisation with unique expertise in carbon pricing and a track record of shaping and influencing international and European climate policy.