BBC Panorama – Big Brands Green Claims Uncovered – Paris 2015 and market boom
We were invited to contribute to the BBC Panorama investigation into the carbon credit markets.
In this clip, we discuss how, after the Paris 2015 agreement, which set the 1.5 c target, there was significant demand and a boom in the voluntary carbon credits markets (VCM) from companies wanting to announce and demonstrate action on net zero. With little or no market regulation, compliance, or oversight, the outcomes were inevitable.
The program can be viewed in full on the BBC Iplayer by following this link
One of the outcomes of the Paris 2015 agreement was a boom in voluntary carbon credits.
Background to the BBC Investigation
In January 2023, the Guardian and other global news media investigated the international voluntary carbon credit markets, revealing that up to 90% of rainforest carbon credits were worthless.
Following this report and the crash of the voluntary carbon credits market between 2023 and 2024, BBC Panorama investigated the global carbon credits market. The journalists investigated projects and brands' claims about using carbon credits to cancel out their carbon emissions so they meet net-zero targets.
Why is it important to understand the VCMs
As a business, we work with investors and organizations seeking to reduce their business risks and liabilities in response to the EU Green Deal and Net Zero legislation. Companies should focus on measuring their operational and supply chain carbon and only then consider using high-assurance carbon removal credits. Failure to take this approach leaves boards and investors vulnerable to tightening regulation, sectorial reduction targets, and a scramble to decarbonize their operations and supply chains.
How to understand the credit market
Daily, we have conversations with companies looking at the carbon removal market, which is a perilous strategy. Many entities, from the EU to the UN, Sovereign governments, and voluntary industry bodies are looking at the regulation of this market, the compliance requirements, and the actual definition of acceptable carbon removal credits. We expect many changes and twists before the science and regulations are settled. Therefore, from a fiduciary and risk point of view, boards and investors must proceed with caution and ensure they undertake diligent due diligence.
Revision of targets
Today, we know many, if not all, of these targets have been revised, reviewed, or removed from public disclosures. While the companies that came out to disclose their revised targets received criticism, credit must be given to the boards for coming to the market and providing context and details of their revised plans, which is more than many others. To add to the malaise in the VCMs, the announcement by one of the world's most prominent nonprofit standard setters for corporates that credits could be used for scope three reporting was ill-judged and ill-timed.
Decarbonising is tough
When all these events are put into context, they underline that companies and investors have realized that decarbonizing and meeting carbon compliance is ‘tough.’ It requires companies to focus on measuring their operational and supply chain carbon, which is one of the reasons we created the Carbon Stream Map. Those who fail to take a systematic approach from the bottom up increase their risks of fines and penalties and, at the most extreme, being unable to trade freely in the EU market.
High visual solution
Working with investors and organizations across multiple sectors, the Carbon Stream Map is a highly visual tool for operations and management teams. We adopt an agile approach to identifying an organization's systematic options to affect emissions within one operation or throughout its global supply chain.
Reducing business risks
The data from the CSM allows business leaders to execute their plans at any point in their net zero transformation journey, supporting any level of operational maturity. Thus reducing their business, costs, and liability risks.
How should businesses respond to EU and global Net Zero legislation?
1. Understand what legislation will affect your business now and in the future.
2. Develop a robust ESG strategy and framework.
3. Measure your business and supply chain carbon emissions. This will enable you to uncover and mitigate your carbon liabilities.
How can Martello help?
1. Understand which legislation will affect your company in the next five years.
2. Help you develop your ESG Strategy and Operating model.
3. Measure your supply chain's carbon liabilities.
4. Create an action plan to reduce your liability.
More about Martello and the Carbon Stream Map
Martello supports businesses and investors in reducing costs and liabilities in response to global carbon, climate, and net zero legislation.
The Martello Carbon Stream Map (CSM) unlocks the blueprint for boards and investors to decarbonize an organization, supply chain, or portfolio by quickly calculating end-to-end operational and supply chain costs and liabilities.
The CSM is a highly visual tool that identifies the systematic options to affect emissions within one operation or down through its global supply chain.
If you believe we can help with your compliance needs for the Corporate Sustainability Reporting Directive (CSRD), the EU Green Deal, Net Zero compliance, or other areas of ESG, please schedule a time for a consultation.
We can measure and map any business in any sector or geographical region. The data allows business leaders to execute their plans at any point in their net zero transformation journey, supporting any level of operational maturity.
