11/27/2023 0 Comments Buy carbon credits![]() While the risks associated with corporate claims should be addressed through more robust governance, they need not necessarily discourage investments in carbon markets. More worryingly, misleading and non‐authentic corporate claims can put the achievement of the temperature goals of the Paris Agreement on climate change at risk by negatively affecting capital deployment and deterring government action by making decision‐makers believe that more ambitious policies and regulation may not be needed. ] posing reputational, litigation, and regulatory risks. ] The lack of transparency around climate‐related claims casts a shadow over companies’ climate strategies and their engagement in voluntary carbon markets, [ ] This large and ever‐increasing number of claims inevitably raises the question: are such corporate climate claims accurately reflecting the efforts undertaken by companies to mitigate climate change?įew companies release details on whether offsetting is used to complement or substitute investments into abatement of GHG emissions generated by a company's operations or within its value chain. ] Most of today's corporate climate claims-not only carbon neutral and net zero, but also carbon negative, carbon free, climate neutral and climate positive-rely to a greater or lesser extent on the use of carbon credits generated from voluntary carbon markets to offset corporate emissions. ] Many companies that are currently marketing “carbon‐neutral” products and services also claim to have already fully “neutralized” the greenhouse gas (GHG) impacts of such products. ] Corporate climate commitments are usually followed by a public announcement that the company intends to become “net‐zero”, that is, reduce and eventually eliminate its negative climate impact by a certain date, often around mid‐century. The paper thereby offers a preliminary categorization of corporate climate claims and discusses risks associated with and governance implications for each of these categories.īy 1 February 2023, 8296 companies had signed up to the United Nations‐backed “Race to Zero” campaign, while the Science Based Targets initiative (SBTi) lists 4483 companies as taking climate action and 2217 companies with approved science‐based targets. Drawing on the reviewed literature, three key dimensions of corporate climate claims as related to carbon credits are discussed: 1) the intended use of carbon credits: offsetting versus non‐offsetting claims 2) the framing and meaning of headline terms: net‐zero versus carbon neutral claims and 3) the status of the claim: future aspirational commitments versus stated achievements. To that end, the paper reviews the nascent literature on corporate climate claims relying on the use of voluntary carbon credits. ![]() This paper takes as its point of departure the proposition that a better understanding of corporate climate claims is needed to govern such claims in a manner that adequately addresses potential greenwashing risks. As such, corporate climate claims risk undermining, rather than contributing to, global climate mitigation. Corporate climate claims are largely unregulated which means that they are often (perceived to be) misleading and deceptive. These claims tend to be underpinned by carbon credits issued in voluntary carbon markets to offset emissions. Worldwide, companies are increasingly making claims about their current climate efforts and their future mitigation commitments.
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