Perspectives on Corporate Activity in the VCM: Live Panel Event

Thanks to everyone who could join us for our first in person panel event that we organised together with Nature Broking. The event brought together industry leaders for meaningful discussions, complemented by sustainable natural wine and great networking opportunities. The panel was moderated by Tiffany Cheung (Corporate Engagement Lead, AlliedOffsets), and featured insights from Adrian Rimmer (London Stock Exchange Group), Paddy Linighan (CSO, Clyde & Co), and Luke Baldwin (Nature Broking).

An introduction to Corporate Engagement in the Voluntary Carbon Market 

To start off the panel, Tiffany Cheung, AlliedOffsets Corporate Engagement Lead set the scene by sharing some data trends around corporate engagement in the voluntary carbon market over the past 24 months. From this we can see a steady, growing presence of unique buyers in the market, closely corresponding to the increasing volume of credits retired. The data also shows that SBTi committed buyers have low retirements relative to the rest of the market, potentially due to a preference for decarbonisation and 10% credit usage threshold. 

Panel Discussion: Perspectives and Strategies behind Corporate Engagement and Activity in the Voluntary Carbon Market 

Some key takeaways included:

• Clyde & Co have built a portfolio of primarily nature-based carbon credits for their net zero journey to their 2038 target year. Doing this is estimated to save them £16m compared to if they only began offsetting residual emissions in 2038, assuming 10,000tCO2e a year through to 2050. This has helped them build a compelling business case where carbon credits can be treated as an asset on their balance sheet, instead of a cost. 
• Some buyers could save millions by purchasing credits now while working on reducing emissions, rather than waiting until they’re closer to carbon neutral or net zero targets. However, many corporations lack the internal capacity to create their own credit portfolios. Carbon is a relatively new responsibility for many Chief Sustainability Officers to tackle. This highlights the need for trusted partners to guide them through the selection process to ensure high quality credits tailored to the company’s values and budget are chosen.
• The vast majority of FTSE 100 businesses are either already doing so or will have to engage with carbon markets to meet their climate targets. On top of this, it is likely that regulation will soon catch up, making engagement with carbon markets increasingly obligatory. As a result, standardised and fungible financial instruments similar to those seen in regulated markets are becoming more prevalent to meet demand from buyers that require higher levels of sophistication and assurance.
• Risk remains a key factor when purchasing carbon credits. Prices should be in part determined by scientific calculations that can give a better idea as to whether the project is likely to deliver a ton of CO2 reduced or removed from the atmosphere

The Future of the VCM

The discussion concluded with a focus on regulation as a driver of confidence and therefore activity in the VCM. The panellists discussed the rapid private-sector action in markets like Japan and Indonesia as a model for fostering regulatory clarity globally. Tiffany Cheung’s key takeaway was this: 

“Seeing the knowledge and infrastructure available in the market being put to use by increasingly serious and sophisticated buyers made this a buoyant evening of discussion. I was particularly impressed by Nature Broking and Clyde and Co’s framing of their credit portfolio as a potentially saleable asset, if they’re successful in reaching net zero earlier than anticipated. I hope to see more companies using the rising price of carbon credits as a dual incentive to decarbonise at a faster rate in coming years.”

In sum, the panel provided invaluable perspectives on the role of the VCM in achieving net-zero targets. If you are interested in learning more about the market intelligence and any of the data that AlliedOffsets provides, please get in touch with our team!