This month, we take a closer look at Schroders and the Mersen; one buyer that is well established in the market, and one whose entry sits within a sector of growing demand. Combining AlliedOffsets data with wider research, we explore how their VCM activity, credit preferences, and routes to decarbonization have evolved over time.
Buyer Spotlight
The investment management firm Schroders (GB00BP9LHF23) is something of a model student not only in the voluntary carbon market, but in wider corporate environmental action. Besides being net zero and SBTi-committed, it is a signatory to a veritable laundry list of environmental collaborative frameworks, including being a founding member of the Net Zero Asset Manager's Initiative (NZAM). In 2023, it even launched carbon offset share classes for investors in the Global Climate Leaders portfolio to offset the emissions associated with their underlying fund holdings. It is, nonetheless, still invested in fossil fuels.
Schroders is a regular market participant in its own right, and has been annually offsetting its operational emissions since 2019. Its retirement details note that this includes “Scope 1 and 2 and all Scope 3 category emissions (except supplier and financed emissions where we have engagement targets) plus homeworking”. It is one of very few buyers to specify in its corporate climate strategy that it does not consider carbon credits to count as emissions reductions towards its science-based targets. The lack of clarity on this front tends to lead to lower confidence in other offsetting companies’ carbon footprint and decarbonization progress reporting. Schroders’s approach to project selection follows the International Carbon Reduction and Offset Alliance (ICROA)-approved certification standard as well as the Integrity Council for the Voluntary Carbon Market’s Core Carbon Principles. However, for all of these commitments, it is unclear how the firm expects its annual demand from the VCM to change, either in terms of volume, removals mix, or length of engagement.
Historically, its activity has been split almost equally between avoidance/ reduction and removal types, with forestry and land use projects making up 77% of its purchases, followed by renewable energy. This portfolio is carefully globally distributed; February’s retirements came from China, Ghana, Canada, the United States, Sierra Leone, and Taiwan. There was a wide estimated offer price range from $28 for the ACR reforestation credits to under $1.50 to VCS wind farm credits. Unusually, Schroders seems to manage some of its registry accounts directly, while also working with brokers Natural Capital Partners and Climate Impact Partners.
In contrast, our other spotlit buyer this month is new to the voluntary carbon markets. Electrical power and materials specialist Mersen (FR0000039620) has entered with a retirement of 52,500 credits - no insignificant volumes for a first time transaction - from one wind and one solar power project in India. Similar to Schroders, Mersen has yet to disclose its longer term offsetting strategy, although it states that “Despite everything we are doing to reduce our environmental impact, it is not technically possible for an industrial group like Mersen to achieve carbon neutrality”, suggesting that use of carbon credits is baked into the foreseeable future.
This is a conundrum being faced by many industrial and manufacturing companies with inevitably emissions intense activities. Having identified that use of natural gas and electricity in Mersen’s graphite and felt manufacturing processes are the main sources of GHGs, the company has aggressively steered its energy mix towards renewables, in particular solar. With its technical resources and more rural factory sites, it has been able to develop more self generating capabilities in Germany, Austria and China, rather than exclusively using the market mechanisms, such as PPAs, that many other companies focusing on Scope 2 favour.
Mersen is also notable as a French company; demand from this country tends to be dominated by a cluster of well established major buyers like Engie and Geopost, and in the last year only around sixty companies have been active. The development of guidance for companies using and making claims from carbon offsetting is still under development both in France and Europe more widely, with the charter for Paris [Agreement]-aligned and high integrity use of carbon credits launched in the Spring of 2025, and the European Commission having paused legislative talks about the Green Claims Directive in the Summer.