Published:

August 23, 2024

Last updated:

September 3, 2024

VCMI: A Deep Dive into the Voluntary Carbon Markets Integrity Initiative

What is the VCMI?

The Voluntary Carbon Markets Integrity Initiative (VCMI) is an international non-profit that helps companies make credible and transparent claims about their carbon credits and contributions towards climate targets. It was established to address concerns about the integrity of voluntary carbon markets and ensures that these markets contribute meaningfully to net zero targets by providing clear, science-based guidelines for corporate climate actions.

Why is the VCMI Important?

As demand for voluntary carbon credits increases, so does the need for standardised quality and transparency in the market. The VCMI is crucial because it:

Ensures Credibility: Companies following its guidelines can avoid greenwashing and ensure their carbon credit purchases and climate claims are credible and scientifically valid.
Aligns with Net Zero Goals: The VCMI framework supports integrating voluntary carbon credit purchases into broader, science-based net zero strategies, endorsed by the SBTi.
Promotes Transparency: Companies must provide clear, transparent reports on their carbon credit usage and climate impact, building trust with stakeholders.
Provides Structure and Simplicity: The framework simplifies creating and reporting on carbon credit strategy, offering clear guidance on portfolio size, composition, and claims.

How does the VCMI help companies?

VCMI provides companies with a structured approach to investing in carbon credits. By following VCMI guidelines, companies can ensure that their carbon credits are high quality, their climate claims are credible, and their contributions towards global climate goals are meaningful. This enhances corporate reputation and strengthens their commitment to sustainability and climate action.

Companies can integrate the framework into their sustainability strategies by:

Aligning with the VCMI Claims Code tiers, aiming to move to a higher tier by improving carbon credit practices and emissions reductions.
Using the VCMI Four-Step Process to ensure climate claims are credible and transparent.
Adhering to the VCMI Claims Code of Practice to ensure that carbon credits are used in line with global climate goals and avoid greenwashing.
Utilising the Scope 3 Flexibility Claim to neutralise Scope 3 emissions still being reduced.

The Scope 3 Flexibility Claim is still in development and is set to be finalised this year.

Key Components of the VCMI Framework

The framework is built around several key components designed to ensure voluntary carbon markets deliver real, measurable climate benefits.

The VCMI Claims Code of Practice

VCMI's Claims Code of Practice provides a universal standard for companies to:

Use carbon credits as part of their net zero transitions.
Make verified claims on the use of carbon credits — Carbon Integrity Claims.

A Carbon Integrity Claim recognises a company’s achievements in going above and beyond science-aligned emissions cuts to accelerate global net zero. – Source

The Claims Code was developed through an 18-month, deliberative process involving experts, governments, companies, and civil society actors globally, to provide a high-integrity standard with international recognition. This enables companies to engage confidently and governments to develop policy harmoniously.

The VCMI Tiers

The VCMI Tiers categorise companies' climate claims based on the rigour and credibility of their carbon credit usage:

Silver Claim: For companies retiring carbon credits covering 10-50% of their remaining emissions.
Gold Claim: For retirement of credits covering 50-100% of remaining emissions.
Platinum Claim: For credits exceeding 100% of remaining emissions.

The 3 VCMI tiers and the requirements for the different VCMI claims

These tiers help stakeholders understand the level of commitment and effectiveness of a company’s climate actions.

The Four-Step Process to Make a VCMI Claim

The VCMI outlines a Four-Step Process to guide companies in making credible climate claims:

The four step process companies can follow to make a VCMI claim

Once companies complete these four steps, they can submit the relevant information to the VCMI Claims Reporting Platform to make a Carbon Integrity Claim. More information about this can be found in the VCMI MRA Framework.

VCMI Scope 3 Flexibility Claim

Companies are not reducing emissions fast enough, with the lack of progress around scope 3 posing the biggest challenge of all. Listed companies alone account for 40% of global emissions. Inaction puts us all at risk. - Source

Given the difficulty in fully managing Scope 3 emissions, the VCMI is creating a framework to add flexibility in how companies can incorporate carbon credits into their Scope 3 strategies.

Key aspects of the Scope 3 Flexibility Claim include:

Flexibility in Timing: Companies can phase in their use of carbon credits for Scope 3 emissions over time, allowing gradual integration into broader emissions reduction strategies.
Targeted Use of Credits: The claim encourages companies to focus carbon credit investments on the most impactful areas within their Scope 3 emissions. This prioritises projects aligned with overall sustainability goals that offer substantial climate benefits.
Alignment with Overall Strategy: The Scope 3 Flexibility Claim supports using carbon credits as a complement to direct emissions reductions. This ensures companies maintain progress toward net zero while managing the complexities of value chain emissions.

This claim is particularly valuable for companies facing challenges in reducing Scope 3 emissions. It provides a practical, phased approach to integrating carbon credits into sustainability strategies while maintaining climate commitments' integrity.

The working version of the Scope 3 Flexibility Claim can be found in the Scope 3 Flexibility Claim Beta paper. More developments are expected to be released in the coming months.

What is the VCMI’s stance on carbon credits?

The VCMI provides detailed guidance on how companies should use carbon credits to ensure their climate claims are both credible and impactful. One of the key approaches promoted by them is tonne-for-tonne investing in carbon credits.

The tonne-for-tonne approach states that every emitted tonne of CO2 that a company wishes to neutralise can be offset by an equivalent tonne of carbon credits from projects that remove or avoid an equivalent amount of CO2. This creates a direct link between a company’s emissions and the climate action it funds, reinforcing the credibility of claims such as "carbon neutrality" or "net zero."

The VCMI emphasises that these credits should be sourced from high-quality projects that are verified to deliver real, measurable, and additional climate benefits. By following this approach, companies can ensure their carbon credits are not just tools for offsetting emissions but also contribute to broader climate goals.

How does VCMI fit into the carbon markets

VCMI and Net Zero

The VCMI framework is integral to helping companies achieve their net zero ambitions by ensuring that their use of carbon credits is both credible and aligned with broader climate goals. They emphasise that carbon credits should not be used as a substitute for direct emissions reductions but rather as a complementary tool that supports the transition to net zero.

Key principles outlined by the VCMI for integrating carbon credits into a net zero strategy include:

Prioritisation of Emissions Reductions: Companies should reduce emissions as much as possible within their operations and value chains before using carbon credits to offset residual emissions. This ensures that carbon credits are used effectively and not as a way to delay necessary decarbonisation efforts.
Alignment with Science-Based Targets: The VCMI framework ensures that any use of carbon credits aligns with science-based targets, consistent with the Paris Agreement. This includes setting near-term targets requiring immediate action and long-term goals guiding the path to net zero by 2050.
Transparent Reporting and Verification: The VCMI requires companies to transparently report their use of carbon credits as part of their net zero strategy and have their claims independently verified. This builds trust with stakeholders and ensures that contributions to global climate goals are genuine and impactful.

By following these principles, companies can ensure that their journey to net zero is credible, science-based, and aligned with global efforts to combat climate change.

For more details, you can read the full VCMI vision and principles document here.

How Does VCMI Compare to Other Frameworks?

The Voluntary Carbon Markets Integrity Initiative plays an important role in the voluntary carbon markets and corporate sustainability landscapes. Understanding how it works alongside other key frameworks and guidelines is critical when working on a company’s sustainability strategy.

VCMI and ICVCM

The VCMI and the Integrity Council for the Voluntary Carbon Market (ICVCM) work hand in hand to ensure the credibility and impact of voluntary carbon markets.

The ICVCM focuses on setting the standards for carbon credit quality through its Core Carbon Principles (CCPs)
VCMI provides a framework for companies to make credible claims about their use of these carbon credits.

Essentially, the ICVCM ensures that carbon credits are of high quality, and the VCMI ensures that companies use these credits in a way that is transparent, verifiable, and aligned with global climate goals.

Together, they cover both the integrity of the credits themselves and the integrity of corporate claims related to those credits.

VCMI and SBTi

The Science Based Targets initiative (SBTi) and the VCMI both guide companies in their climate strategies. They both focus on different aspects of corporate climate action:

The SBTi provides companies with a framework to set and achieve science-based emissions reduction targets, ensuring that their pathways to net zero are aligned with the latest climate science.
The VCMI focuses on how companies use carbon credits within the strategies set by the SBTi. Specifically, the VCMI provides guidance on how companies can make credible claims about their carbon neutrality or net zero status by using high-quality carbon credits as a supplement to their direct emissions reductions.

Essentially, the SBTi sets the path for emissions reductions, and the VCMI ensures that any use of carbon credits along this path is transparent and credible.

VCMI vs CSRD

The Corporate Sustainability Reporting Directive (CSRD) and the VCMI both aim to enhance corporate transparency and accountability. However, they operate in different domains.

The CSRD is a regulatory framework introduced by the European Union to standardise and improve sustainability reporting across all large companies and listed entities in the EU. It mandates comprehensive disclosure of environmental, social, and governance (ESG) factors, including climate-related risks and opportunities.
The VCMI specifically focuses on the voluntary carbon market, providing guidelines for companies to make credible claims about their use of carbon credits.

Essentially, the CSRD ensures that companies report on a broad range of sustainability issues, while the VCMI ensures that any claims related to carbon neutrality or the use of carbon credits within those reports are credible and verifiable.

Key Takeaways

The Voluntary Carbon Markets Integrity Initiative is essential for companies seeking to navigate voluntary carbon markets with integrity and transparency.
The framework includes Tiers, a Four-Step Process, and a Claims Code of Practice that guide companies in making credible and science-based climate claims.
It supports companies in aligning their carbon credit usage with broader net zero strategies, ensuring that their contributions to climate goals are meaningful and verifiable.
The Scope 3 Flexibility Claim provides companies with the tools to effectively manage and offset indirect emissions, aligning with the overall goals of the Paris Agreement.
Tonne-for-tonne investing is a key approach within the VCMI framework, ensuring that companies’ carbon credits directly compensate for their emissions, thereby maintaining the credibility and impact of their climate claims.
Prioritisation of Emissions Reductions, Alignment with Science-Based Targets and Transparent Reporting and Verification are all critical steps in achieving net zero.