Principles for carbon offsetting
Insights

Principles for carbon offsetting

There has been increasing pressure on corporates to reduce their greenhouse gas emissions to limit global warming to 1.5 degrees, including from investors through engagement. This has led to many companies committing to achieve net zero emissions. While reducing emissions is an evident priority to limit warming to 1.5 degrees, often eliminating residual corporate emissions is either expensive or not yet technologically feasible. Thus, many net zero commitments either implicitly or explicitly rely on carbon ‘offsetting’: where carbon emitters purchase verified units of greenhouse gas emission reduction or removal to compensate for remaining emissions. Emitters are increasingly turning to the voluntary carbon market to source these carbon offset credits, or developing offset projects themselves, particularly through Nature Based Solutions (NBS).

The voluntary carbon market is growing quickly to meet this increasing demand. Over $1bn worth of carbon credits were transacted on the market for the first time in 2021, a three-fold increase on 2020. However, with this rapid expansion has come considerable growing pain. Critiques of the market focus on the legitimacy of the claims made by both credit sellers and credit buyers. Some projects which sell credits have been criticised for failing to have the additional and long-term climate impact they claim, and for generating negative environmental and social side effects. Credit buyers can be embroiled in project level controversies and can also be accused of greenwashing if they conduct profligate purchasing of offset credits with limited efforts to decarbonise. Even legitimate offset buyers and sellers face reputational risks due to the current lack of consensus on what constitutes credible offsetting.

We have a strong history of active engagement with the companies we hold and those we engage with on behalf of our Reo clients. Here we aim to communicate our perspective on when companies should use offsets, which offsets they should be using, and how companies should use and disclose on their use of offsets. Our principles build on the established quality standards already in the market but aim to raise the level of expectation. Our intention is that we will revisit and revise these principles as the voluntary carbon market evolves.

Interested in learning more? We explore how nature can be a powerful ally in the fight against climate change. Download the full viewpoint to discover more.

4 avril 2022
Joe Horrocks-Taylor
Joe Horrocks-Taylor
Senior Associate, Analyst, Responsible Investment
Share on linkedin
Share on email
Sujets clés
Sujets connexes
Listen on Stitcher badge
Share on linkedin
Share on email
Sujets clés
Sujets connexes

PDF

Principles for carbon offsetting

Risk Disclaimer

Views and opinions have been arrived at by Columbia Threadneedle Investments and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.

The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.

Eclairages connexes

16 juillet 2024

Harry Waight

Portfolio Manager

On your bike - Shimano and cycling

From gearing up Tour de France contenders to a growing e-bike market, Shimano looks well placed.
Read time - 3 min
4 juillet 2024

Joe Horrocks-Taylor

Senior Associate, Analyst, Responsible Investment

ESG Viewpoint: Nature Positive commitments: separating the green from greenwash

We outline six attributes of a good Nature Positive commitment and assess how a range of companies are stacking up.
Read time - 5 min
19 juin 2024

Sally Springer

Senior Thematic Research Analyst, Global Research

Human capital – supply: the impact of demographic transition on investments

Working populations are in decline, with the demographic dividend that has supported economic growth in many developed markets under threat. This will have a direct impact on the firms in which we invest.
Read time - 8 min
17 juillet 2024

UK Real Estate: Talking points July 2024

Political stability, rebased pricing, falling inflation and the expectation of rate cutting are collectively expected to provide a more supportive environment for UK real estate.
Read time 2 min
17 juillet 2024

Fixed Income Desk

In Credit - Weekly Snapshot

In Credit Weekly Snapshot – July 2024

Our fixed income team provide their weekly snapshot of market events.
Read time - 5 min
16 juillet 2024

Harry Waight

Portfolio Manager

On your bike - Shimano and cycling

From gearing up Tour de France contenders to a growing e-bike market, Shimano looks well placed.
Read time - 3 min
true
true

Risk Disclaimer

Views and opinions have been arrived at by Columbia Threadneedle Investments and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.

The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.

Vous pourriez aussi aimer

Approche d’investissement

Le travail d’équipe est fondamental à notre processus d’investissement qui est structuré de manière à évaluer et mettre en pratique de solides idées d’investissement pour nos portefeuilles.

Fonds et VL

Columbia Threadneedle Investments dispose d’une gamme complète de fonds d’investissement répondant à un large éventail d’objectifs.

Compétences d'investissement

Les capacités d’investissement de Threadneedle sont fondées sur la culture de collaboration de notre plate-forme d’investissement unique.

Veuillez confirmer quelques détails vous concernant pour visiter votre centre de préférences

*Champs obligatoire

Une erreur s'est produite veuillez réessayer

Merci. Vous pouvez maintenant visiter votre centre de préférences pour choisir les informations que vous souhaitez recevoir par e-mail.

Pour afficher et contrôler les informations que vous recevez de notre part par e-mail, veuillez visiter votre centre de préférences.