Policy paper

Principles for voluntary carbon and nature market integrity

Published 15 November 2024

The UK government principles for voluntary carbon and nature market integrity are:

1. Use credits in addition to ambitious actions within value chains

Credits should only be used in addition to ambitious action within value chains, consistent with a science-aligned pathway to domestic and global climate and environmental goals.

Comment: Achieving climate and nature goals requires immediate, ambitious and sustained action to reduce value chain emissions and environmental impacts. In line with the mitigation hierarchy, companies should make every reasonable effort to minimise their own impacts, and that of supply chain partners, before using credits in voluntary markets. Such use should complement, and not displace, investment in value chain activities necessary to reduce source emissions and environmental impacts. These reductions could include support for insetting activities within a buyer’s value chain.

2. Use high integrity credits

Suppliers should ensure credits meet recognised high integrity criteria that help ensure credits deliver the environmental benefits they claim. They should ensure credits are independently validated and verified; clarify and support mitigations of any social and environmental harms, and seek to demonstrate support for wider environmental and social objectives.

Comment: High integrity criteria include that credits:

• represent activity additional to that required by law at the project level
• are generated through the application of conservative baselines
• are not double counted
• are subject to independent validation and verification
• are accompanied by measures to compensate for any reversal of the activities’ outcomes

Suppliers should also:

• identify and mitigate the risks of leakage
• identify, disclose and address potential or actual impacts on vulnerable groups
• respect the rights of Local Communities and Indigenous Peoples, including through Free, Prior and Informed Consent
• transparently report how project activity may support wider environmental, gender and social objectives

Global initiatives to set baseline quality thresholds for voluntary credits and the actors who generate and certify them, for example the Integrity Council for the Voluntary Carbon Market, can guide credit buyers towards activities that meet the above criteria.

3. Measure and disclose the planned use of credits as part of sustainability reporting

Information on the planned use of credits, for example to offset greenhouse gas emissions to achieve any net greenhouse gas emissions target should, where financially material, be disclosed as part of a company’s sustainability reporting. All credit users are encouraged to voluntarily report publicly any use of credits, including the underlying project type, certifying standard, how any planned use of credits relates to wider environmental objectives, and whether they are used towards any target.

Comment: Disclosure of the use of credits, through processes that make such information transparent and easily accessible by the public, is encouraged where credit buyers do not already face relevant requirements. Such voluntary disclosure allows for public accountability and supports demonstration of compliance with credit integrity criteria. Disclosure of the use of carbon credits also supports credit users that choose to seek recognition under VCMI’s Claims Code of Practice towards meeting that initiative’s broader criteria^{[footnote 1]}.

4. Plan ahead

Where organisations make relevant transition planning disclosures, they are encouraged to use best practice guidance.

Comment: Credit users should set and disclose long-term and interim targets and strategies to achieve them. For carbon credit buyers, this should include a quantified and independently verified science-aligned target across scopes 1-3, to achieve net zero no later than 2050. Credit users not subject to transition planning requirements are encouraged to draw on such guidance.

5. Make accurate green claims using appropriate terminology

Claims involving the use of credits should, in addition to being consistent with these Principles, accurately communicate an organisation or product’s overall environmental impact, including by using appropriate and accurate terminology.

Comment: False and misleading environmental claims related to organisations, their goods and services have highlighted the need for more accurate underpinning terminology. Examples have included some claims that organisations, services or products are ‘carbon neutral’, or ‘biodiversity positive’. While organisations should take care to ensure that such claims are accurate, the UK government recognises that it could, in a proportionate manner, help to ensure clearer understanding of claims.

6. Co-operate with others to support the growth of high integrity markets

Credit buyers should co-operate with other VCNM market actors to support standardisation, wider information sharing, more equitable market access, reduced transaction costs, transparency and interoperability.

Comment: Voluntary markets are a fast-evolving space, but market architecture can be fragmented in ways that might inhibit high integrity and efficient use. A range of initiatives, including those listed above, have emerged to help ensure that markets can realise more of their potential, including through supporting transparency, interoperability between carbon and nature credit registries, technological innovation to support environmental integrity, capacity building to Emerging Markets and Developing Economies, and new governance models. By contributing to or otherwise supporting these initiatives, credit buyers should help support the growth of higher integrity markets.

Next steps

In early 2025, the government will consult on the proposed implementation of these principles into voluntary carbon and nature markets and seek views on how they could be applied through guidance, standards and regulatory oversight.

1. We are not currently proposing an equivalent set of information requirements for corporates making claims based on their use of non-carbon nature credits. ↩