This year’s workshops at #CTS2022 – Take action and be part of change! 

The preparations are full on – the CLIMATE TRANSFORMATION Summit 2022 is just around the corner! Just 5 weeks to go until Climate Experts, Entrepreneurs and Decision-Makers get connected to discuss and share Best-Practices on decarbonizing the supply chain. Are you in? Get to know more about the program and exclusive workshops at climatesummit.de below.

Climate Targets and Decarbonization – Why is it relevant today? 

The topic of supply chain decarbonization is more relevant this decade than ever before. Many companies have already set climate targets and aim to build a climate-compatible supply chain. Not only because most of them understand that including a climate strategy into their core company goals is relevant today more than ever, but also because political decisions drive companies towards the disclosure of climate relevant information. 

For example, the European Union is about to tighten controls on supply chains and demands companies to review their entire supply chain instead of merely their direct suppliers. According to the EU’s draft for the supply chain act, companies with 500 employees and 150 million Euro annual revenue are required to disclose relevant information regarding social and environmental standards along the supply chain. Corporates now face the challenge of preparing for this law. However, most of the companies still lack the knowledge and resources to make climate relevant decisions and create transparency around the value chain in order to identify the important savings potential. 

The value chain is the biggest lever for a successful Climate Transformation – up to 90% of the emissions are generated along the supply chain. So let’s take this challenge and transform it into an opportunity! Here is how the climatesummit.de will help you achieve this.

Why you should take part in #CTS2022

In order to effectively reduce CO2, the first step is to calculate Scope 1-3 emissions. Generating climate-relevant data along the supply chain is the foundation to get an overview over the suppliers climate performances. Doesn’t sound feasible yet?

Together with Climate Experts and Change-Makers, we will explore the questions around climate-relevant data and how it’s being used for managing climate-related risks and opportunities along the supply chain. Data experts will share their experiences and success stories and show how climate data enables a holistic supply chain decarbonization and drives a strong Climate Transformation in businesses. In keynotes, panels and fireside chats, Climate Pioneers such as Project Drawdown, WWF Germany and B.A.U.M. e.V. will give insights on how to implement Climate Transformation internationally and based on most recent scientific findings share Best-Practices for decarbonization.

Also, Climate Transformation isn’t something to do on your own. That’s why connecting a strong CLIMATE Community and building networks is also one of the main goals of the Summit. At our online fair, you will get to know innovative climate solutions – such as myclimate, windCORE, BearingPoint, greenmiles and exxeta. Learn how these suppliers of climate-friendly B2B products or services can help your company reduce CO2 and build a climate-relevant supply chain.

Interactive workshops with CLIMATE Pioneers

And that’s not all! We also want to hear what you have to say! Take part in this year’s interactive workshops and share your experiences and expertise as well as raise your questions around the topic of decarbonization. From workshops about climate-relevant procurement and supplier management to creating solutions on how to reach the 1.5 degree goal in a climate simulation game – Here’s something for everyone!

Which specific topics await you? Find out more about the workshops below. Here are some of the topics that will be tackled in the workshops this year – more details will soon be published on the climatesummit.de.

Employee engagement

Have you ever wondered how to train employees on climate and sustainable transformation? AXA Climate enables companies to upskill and engage all employees to succeed in the sustainable transition and already trains more than 3 million subscribers. Join the workshop in order to learn more about driving Climate Transformation together with your employees.

Global Climate Action – Simulation Game

Ready to take action? In this interactive workshop with Alice Schmidt, we are going to simulate global climate action and together create a scenario in which global warming stays below 1.5 degrees Celsius. Together, we will establish high-impact actions and discuss how energy efficiency, renewable energy investment or carbon pricing affects temperature rise.

Climate-compatible Procurement

In workshops with Sustainable Procurement Pledge Germany and BearingPoint, we will tackle the most relevant questions about sustainable procurement. We will explore how procurement can engage suppliers in the race to Net-Zero emissions by 2050, the pros and cons of doing so, and how to make it happen. Learn how to increase supplier engagement and enable your relevant suppliers to reach climate targets.

Data-driven CLIMATE Rating

It’s all about data – In the workshop by Telefónica and The Climate Choice, we will discuss the relevance of climate-related ESG data and how it enables companies to make sustainable sourcing decisions. Learn how to collaborate with suppliers in order to successfully decarbonize your supply chain by using data-driven Climate Analysis Tools.

Transparency and ESG-Reporting

Reporting standards and disclosure needs are providing new risks and chances. What are companies expected to deliver? In this workshop with Christoph Klein, companies’ executives understand the perspective and requirements of a manager of article 9 funds. Join the discussion and learn how to tackle the challenges of companies to comply with new reporting standards.

Join #CTS2022 – be part of Climate Transformation

As you can see, the #CTS2022 will be full of different insights, learnings and opportunities to challenge your company with new CO2-reduction strategies and Best-Practices for Climate Transformation! Not only in the „Climate Bubble“ but among the wider economic sphere, we need to raise awareness and make climate solutions easily accessible for every business – cause that’s how real change happens. The climatesummit.de invites all Decision-Makers, Climate Officers, Green-Tech Entrepreneurs, Freelancers, Researchers and interested parties to join the CLIMATE Community and enable a long-lasting Climate Transformation!

We are happy to have you joining! Get your ticket here!

#CTS2022 Workshop Hosts

Featured Images: Unsplash

Why should I attend the #CTS2022?

Chiara Tufarelli

Hello again and welcome to the second blog entry on this year’s CLIMATE TRANSFORMATION Summit, here is Chiara, the Event Project Manager of the Summit. In case you missed the first blog post and do not want to leave anything behind, I suggest you read here before proceeding.

SO FAR SO GOOD

Three weeks have passed since we last spoke and SO MUCH has happened! Everyday we have had super interesting calls with potential speakers, exhibitors, workshop hosts and media partners and I can assure you that the #CTS2022 will be a great learning and networking experience!

You don’t have a ticket yet? Register here and enjoy the Early Bird Discount, only available for a limited amount of time! 

WHAT ARE WE GOING TO TALK ABOUT?

That’s a very good question and the answer is: Climate Data & Supply Chain Transformation. These two will respectively be the focus points of the 2 days of the Summit, happening on the 2nd & 3rd June 2022.

The Supply Chain is where the majority of corporate CO2 emissions stem from, and is also the most difficult aspect to tackle, as it is (mostly) out of one’s control. However, at the #CTS2022 we want to show how Climate Data and Procurement are intrinsically related and how the only way to REALLY change things is to take responsibility beyond the borders of your company.

A HOT TOPIC YOU DON’T WANT TO MISS

The Decarbonisation of the Supply Chain is a highly debated topic and we read it more and more often on the news. The European Commission has recently adopted a proposal for a Directive on corporate sustainability due diligence, which aims to foster sustainable and responsible corporate behaviour throughout global value chains. This means that soon corporations will need to identify and if necessary, prevent, end or mitigate adverse impacts of their activities on human rights and on the environment. This is easier said than done, and it will be the main focus of the #CTS2022!

DOES ONLINE MEAN BORING?

Of course not! Even if the CLIMATE TRANSFORMATION Summit is 100% online, it is also 100% live! This means that all attendees will have the opportunity to connect and chat with the people present, to exchange contact information and interact with one another. We want to offer you a great experience and will make sure to deliver it to you!

#StayTuned to find out the technical details for the #CTS2022, coming up soon!

WHAT’S ON THE AGENDA? ONE PANEL AT A TIME

I guess you are all dying to know more about the agenda of the Summit and I’m here to tell you exactly this.

  1. KEYNOTE

Each day we will start with a Keynote Speech, where Sustainability Experts and Practitioners will give impactful insights linked to the Decarbonisation of the Supply Chains. Why? It’s always good to hear from the experts their viewpoints and it’s a good way to get you started on the summit.

  1. FIRST PANEL

How can companies and corporates improve their sustainability performance, if they don’t know where they’re standing? To have clear and reliable climate data it’s equally important and hard for companies, and this will be the starting point of discussion during the First Main Panel. I bet you cannot wait to hear what will come out of this Panel – neither can I!

  1. WORKSHOPS

After having “passively” heard our Speakers, it’s time to get into action and participate in one of the selected Workshops! We will have around 5 Workshops happening simultaneously and attendees will register in advance to their most preferred ones (one for each day). This is the time where attendees can actively contribute and participate in what our Workshop hosts prepared for them – details on the workshops will soon be published on the ClimateSummit.de!

  1. ONLINE FAIR

And then what’s next? After the workshops it’s time to visit our amazing CLIMATE Online Fair! Start-ups and Innovators, providing B2B climate solutions will welcome you at their virtual Exhibitor Booth, where they will present you their services and products. So you will have the chance to get your personal deep dive into climate transformation. You certainly don’t want to miss what is out there. You aim to become an exhibitor yourself, you can still apply to become one here.

  1. FIRESIDE CHAT

Last but not least, the afternoon will be all about the interactive Fireside Chats, where three speakers at a time will exchange ideas and experiences on the chosen topic. Additionally, the moderators of the panel discussions will ask questions coming from the audience via the live chat.

The program is truly exciting and interactive, the line up of the Speakers is very promising – anything that is still missing is you! Check out the agenda here and get ready to join!

I hope this gave you an overview of what the Summit will all be about, but the only way to truly be part of the climate transformation is by attending it! We are looking forward to meeting you in June. 

Get your ticket now and join the CLIMATE Community!

Any question remained? Please feel free to write to me, I am happy to help.

Chiara

Supply chain decarbonization, what’s to be expected in 2022?

Many companies are recognizing the effectiveness of decarbonizing their supply chain. But which measures can ideally be implemented in 2022? Which trends can companies follow in order to efficiently reduce CO2 emissions along their supply chain?

The biggest challenge of the 21st century is to successfully implement climate transformation. Climate change is noticeable worldwide: fires, floods and species extinctions are already paramount during this decade. If the global surface temperature warms by 2 degrees, a quarter of the world will regularly suffer from extreme heat waves. Even if the widely discussed 1.5-degree target was being achieved, extreme heat still affects about 1 billion people worldwide. 

The global economy plays a central role in making substantial impact. Although emissions in Europe have been declining since the 1990s (Fig. 1), this is the result of global crises rather than that of successful climate management. Our climate transformation measures have a large scope for improvement.

Fig. 1

GLOBAL REGULATIONS

Regulations are being put into place worldwide to enable the implementation of climate targets (Fig. 2). At the COP26 climate conference in Glasgow, agreements were made to eliminate the use of fossil fuels and to reduce emissions worldwide by at least 55% by the end of 2030. Such targets are also increasingly being set in Europe. The “Fit for 55” program was adopted in summer of 2021, also with the goal of reducing emissions by 55%. Earlier this year, Germany reaffirmed its intention to work towards a 65% reduction by 2030 and to achieve climate neutrality by 2045 (however, whether 2045 is a feasible target year is still a matter of debate). 

These targets are having an impact on businesses. Companies must adapt, commit to reducing emissions and help meet the 2-degree target. However,  last year we realized that it is not enough to simply set these climate targets. We also need to talk about how we put them into practice. 

Fig. 2

The EU taxonomy has been in force since January 1, 2022. It aims to classify companies according to how their actions contribute to climate and sustainability. The EU taxonomy is considered to be the first framework for such a classification. The framework provides tangible criteria to measure the degree of sustainability and climate compatibility of business activities. It analyzes whether they positively influence one of the six environmental goals of the EU (Fig. 3) without violating another while at the same time complying  with all social standards. Companies will soon have to transparently disclose how they contribute to adhering to this framework and assess whether their own business model is climate-compatible. Heavily discussed within this framework is the inclusion of nuclear power. 

Fig. 3

A second framework is a proposal from the Taskforce Climate Related Financial Disclosure (TCFD), which was developed at the request of the EU to show the other perspective: How can companies show what risks climate change poses to them? And how can businesses set up strategies to address these risks and seize opportunities? Although this framework is only a recommendation so far, 60% of the world’s largest 100 companies are already using it in order to assess especially financial related climate risks.

The CSRD (Corporate Social Responsibility Directive) aims to bring these two perspectives together. The goal is to create a framework for 2023, which companies may refer to, instead of the currently existing Non-Financial Reporting Directive (NFRD). It is already known from publications that the CSRD builds on existing standards and takes into account the 6 EU climate targets. For now, this framework will apply to companies with over 250 employees with €40 million net sales and €20 million balance sheet. From 2026 it will also apply to listed SMEs.

These frameworks are emerging not only at the European level, but also at the international level. Companies are already aligning with the TCFD requirements. In the meantime, the International Sustainability Standard Board (ISSB) has also been established, whose task is to create an international concept for the disclosure of climate-relevant ESG data. This will also consider governance, strategy, risk metrics and KPIs.

2022 – GET YOUR DATA RIGHT!

In order for companies to make the impact of ESG criteria measurable and manageable along the value chain, climate data analysis is necessary. The obligations for companies to disclose their climate impact are increasing, not only from the customer side, but also due to the regulations mentioned previously. As a starting point, it helps to identify the biggest emission sources within the company. The majority of a company’s negative climate impact is not caused by direct emissions, but the emissions that are generated within  its supply chain (Fig. 4).

Fig. 4

Emissions from the supply chain can account for up to 90% of corporate emissions. If a company aims to improve its climate impact, the biggest lever is the supply chain.

HOW CAN COMPANIES OPERATE IN A CLIMATE-COMPATIBLE MANNER?

To drive climate transformation within a company, the first step is to implement a structured climate management system. It is insufficient to measure CO2 and simply offset emissions- CO2 emissions must be avoided and reduced. In addition, it is necessary to transparently disclose climate-relevant data. 

Decarbonization through climate-relevant procurement makes supply chain transparency ever-so important. Dealing with Scope 3 emissions is essential for companies to meet requirements pertaining to their climate transformation. This is accompanied by various challenges (Fig. 5). For example, climate-relevant data is often missing, which impedes companies from enabling a climate-compatible procurement practice. Moreover, there are still no clear climate targets and standards along the value chain, by which companies can measure whether their suppliers are abiding by established  climate standards.

Fig. 5

An alliance of international corporations- “Transform To Zero” (Fig. 6), was formed in order to successfully address these challenges. Participants across different industries benefited from working together to decarbonize their supply chains. Engaging a fragmented supplier landscape across multiple industries requires collective action. 

The biggest challenge of supply chain decarbonization: There are many small and medium-sized companies in supply chains that are not yet ready to manage their climate impact, resulting in a lack of climate-relevant ESG data. Only 28% of companies with decarbonization goals are on track to meet their targets. This mainly results from the fact that they have not yet addressed supply chain challenges. The following is a step-by-step guide to supply chain decarbonization.

STEP-BY-STEP SUPPLY CHAIN DECARBONIZATION

When decarbonizing the supply chain, the following questions need to be addressed:

  1. How climate-relevant are my suppliers?
  2. How do I help them decarbonize?
  3. How can I foster collaboration between buyers and suppliers? 

No matter what process you implement, according to Gartner, a company should first find a way to collect data and analyze it, in order to provide expertise from the different areas of transformation.

To help companies move towards climate-compatible supply chains, one must consider the following five steps:

  1. Comprehensive climate management system – addressing climate regulations and customer needs.
  2. Engagement – collaborating with suppliers on climate reporting and emission reduction effort
  3. Data collection implementation – developing a method to manage climate-related ESG data from suppliers
  4. Data-driven – using software to enable suppliers to identify emission reduction opportunities
  5. Data-driven procurement – making smart decisions and allocating capital properly

HOW ZERO-CARBON SOLUTIONS DECARBONIZE SUPPLY CHAINS

40% of emissions in supply chains could be reduced via easily accessible and affordable means (<€10 per ton CO2e), which equals current offsetting prices (Fig.7).

Fig. 7

WHY IS CLIMATE TRANSFORMATION PROFITABLE?

The assumption investing in Climate Transformation contradicts the company’s goal of generating profit still prevails. But investing in climate solutions is profitable for businesses. According to World Economic Forum, a sustainable supply chain increases a company’s market value, as procuring companies improve their performance and reduce costs directly in the supply chain as well as suppliers benefitting from sustainable practices and reducing their own costs.

WRAP-UP SUPPLY CHAIN DECARBONIZATION:

The past year has shown the need to effectively implement CO2 emission reductions along the entire value chain. Companies need to transform their supply chains and implement climate-relevant sourcing by actively engaging with suppliers and empowering them to manage their own climate data and reduce CO2 emissions. Climate-relevant sourcing includes enabling a collaborative sourcing-supplier relationship that empowers suppliers to become climate champions themselves.

THE CLIMATE CHOICE supports this goal. As a software-as-a-service platform, it provides reliable climate ratings and a collaborative, data-driven tool for decarbonizing companies and their supply chains. As a detailed analysis, the action-oriented and easy-to-use climate scorecard provides insights into the company’s climate-related opportunities, potentials and risks. The smart technology platform supports companies in identifying fields of action and implementing decarbonization measures together with suppliers and trading partners. This drives forward a holistic transformation. By working with a consistent methodology to evaluate its own climate performance, effective measures for supply chain decarbonization can be implemented in collaboration with a strong CLIMATE network. This way companies can target CO2 reduction and promote transparency.  

Make your company a CLIMATE Champion! Contact us right now to schedule a free consultation. 

Third time’s the charm: #CTS2022!

In four months the third edition of the CLIMATE TRANSFORMATION Summit will take place. My name is Chiara Tufarelli, I am this year’s Event Project Manager and I am very excited to give you a glimpse of what the #CTS2022 will be like this year, so let’s get started!

WHAT AWAITS YOU

We are taking the next step: for the first time the CTS is entirely going to be held in English! No more language barrier for those who do not speak German – it is a very hard language after all, I know it very well as I am Italian and I’ve been struggling with it for years!

The reason for this change is obvious if you think of the mission of the #CTS2022: sharing best practices and creating a CLIMATE Community to foster decarbonisation.

THE WHAT, THE HOW AND THE WHY

This leads me to the second point I want to touch upon: who is participating?

The CLIMATE TRANSFORMATION Summit is the first 100% online B2B event where climate officers, procurement leaders, decision makers, politicians and innovators participate to learn from one another – sharing their insights, best practices and challenges working on the climate transformation. The focus of the #CTS2022 will thus be on the Decarbonisation of Companies and their Supply Chains, which is where the majority of corporate CO2 emissions stems from! Exciting, isn’t it? It also creates a certain fil rouge with the previous Summits, where the focus was first on learning about climate solutions, at #CTS2020, and then on implementing climate goals in action, at #CTS2021.

WHERE AND WHEN?

Now that you know the what and the who, I should probably tell you the when and how: the 2nd and 3rd of June100% online, live and interactive!

Considering that we will all meet online, you don’t have to worry about flying in, finding a hotel room or cancelling last minute saying that you “tested positive” – this event is climate- and covid-proof!

CLIMATE COMMUNITY

Now I have to be honest with you and tell you that I didn’t participate to the previous CLIMATE TRANSFORMATION Summits – I wasn’t aware of them yet – but I’ve heard they’ve been pretty awesome! So no matter if you are new to the world of climate transformation and supply chain decarbonisation or a leading expert, join the CLIMATE community and make 2022 matter the most! Head right away to EventBrite where you can enjoy an Early Bird Discount on the tickets!

ARE YOU STILL READING?

In case you like to find out even more about the #CTS2022, on the website you can get already a sneak preview of this year’s speakers.

Among them we have Professor Stefan Rahmstorf, Head of the Earth System Analysis Department at Potsdam Institute für Klimafolgen (PIK). In 2017, he was the first scientist outside the USA to be awarded the Climate Communication Prize. Stefan will open the summit with his keynote, getting us all excited to take actions!

Then, if you’re interested in climate disclosure and regulations, you cannot miss the opportunity to meet Yvonne Zwick, CEO of B.A.U.M. e.V., who undertook various positions in the office of the German Council for Sustainable Development from 2004 onwards and now joins as an expert in EFRAG’s SME working group, which is developing the European sustainability reporting standard for companies.

Finally, if you’re a procurement passionate, you will certainly appreciate the expertise of Yvonne Jamal, CEO of the JARO Institut e.V., who is specialized in sustainable procurement and wants to ensure that sustainable action becomes the standard for the economy – by imparting relevant knowledge, connecting people and organizations and working for the implementation of the SDGs.

WHAT A TEAM! AND MANY MORE TO JOIN…

On the #CTS2022 website you will find in the next days and weeks more speakers who will be revealed. I will happily introduce them to you next time. 

Alright, I think you noticed I am pretty excited and looking forward to meeting you soon!

For now, I go back to planning the Summit, but I’ll keep you updated in the THE CLIMATE CHOICE Magazine! 

See you then!

Chiara

Carbon Credits – current Trends and Best Practices for Companies

Companies are increasingly being held accountable to ensure a climate-compatible future. In order to compensate for their unavoidable remaining emissions, carbon credits are a popular ingredient of climate strategies. But what effects do carbon credits actually have on the climate transformation, and how can companies use them properly and ensure their offsetting approach is credible? In the CHOICE Event #30, Adele Marie Grundmann and Julia Hunziker from South Pole explained the basics of building a successful carbon portfolio and explained current trends in the offset market. In the following, you can find the most important key takeways.

Best Practice in Corporate Climate Action

Although the global community has just recently agreed on new plans and pledges for climate protection at COP26 in Glasgow, these government pledges are currently not enough to keep us within +1.5 degrees warming. Therefore, it is key for the private sector to act, and more and more companies are taking their responsibility seriously and setting themselves climate targets. 

However, companies are committing to different climate actions, and it is important to understand exactly what each of these means. The three targets of companies are:

Climate Neutral – Reducing and compensating the company’s GHG emissions with any type of certified carbon credits resulting in no net increase of global GHG emission in the atmosphere. 

Net Zero – Reducing emissions in line with science to as close to zero as possible while ramping up carbon removal to balance out any remaining emissions. These solutions can be natural and technical (WRI, 2020). 

Climate Positive – Doing more than becoming climate neutral and net zero, meaning removing more emissions than the company is generating.

Companies can gradually achieve each of these goals as follows. 

  1. First, they should measure their own Scope 1, 2 and 3 emissions and provide a detailed overview of their holistic corporate climate performance.
  2. Based on this, companies can develop and implement effective measures to reduce their own carbon footprint. These reduction measures should always be the number one priority in their climate strategy. 
  3. By investing in carbon avoidance projects, companies can afterwards compensate for their unavoidable remaining emissions and become climate neutral. 
  4. Over time, the residual emissions that could not be reduced are neutralized with carbon removal credits. If all residual emissions are addressed, the company has reached net-zero.

Carbon Credits 101

To understand exactly how carbon credits can help achieve these goals, let’s take a look at the basics and define what a carbon credit actually is: A carbon credit is a tradeable certificate that represents the avoidance or removal of one tonne of carbon dioxide emissions resulting from a specific project activity. One carbon credit is equal to 1 tonne of CO2 being reduced or removed from the atmosphere.

In order to acquire carbon credits, an organisation invests in a project which is aligned with its values. That project generates a carbon certificate which in turn can help the organisation to become climate neutral or reach net-zero. 

These carbon projects must meet certain criteria. One of the most important ones is additionality. This means that the project would not have been established and would not be viable without the income from the carbon credit. Simply put, there is no business case behind the project. Also important is that the projects need to be verified by several third parties.

What to consider when purchasing carbon credits?

When buying a carbon credit, there are several important factors to consider. First: What category falls the project in? There are avoidance projects and removal projects. Avoidance projects avoid or reduce GHG emission in comparison to a baseline scenario. For example you could develop a renewable power generation by a solar power project instead of the “average” power plant technology using fossil fuels. Removal projects on the other hand actually remove CO2 from the atmosphere and durably store it. These projects can either be technical – e.g. direct air capture and storage – or natural in the form of natural sinks – e.g. planting trees.

Next to the categories, there are also different types of carbon projects. These can for example be subdivided into household projects that reduce the amount of fuel needed for household tasks, innovation in industry that promotes green growth through energy efficiency or clean water projects that reduce fuel needed to boil water for purification.

The next question you want to ask yourself: Is the project certified with an internationally recognized standard? The two most important standards are The Gold Standard and the Verified Carbon Standard (VCS). The Gold Standard is endorsed by more than 80 NGOs and has 1400+ certified projects in over 80 countries. Gold Standard certified projects need to fulfill 3 Sustainable Development Goals to assure social co-benefits. The Verified Carbon Standard (VCS) is the world’s most widely used voluntary emissions reduction standard. It was developed and is managed by Verra, a registered not-for-profit organization founded in 2005. 

Voluntary Carbon Market Trends

A lot is happening at the moment on the carbon market. Most recently, at COP26 there was a great deal of discussion and ultimately also a decision that transferring carbon credits between countries would still be possible. However, the COP agreement concerning the voluntary carbon markets for organization is purposefully vague, and it will be up to voluntary carbon standards, governments, and market participants to determine whether the voluntary use of carbon credits needs corresponding adjustments.

Beyond the regulatory changes, there is currently a strong increase in demand. Since 2020, the annual retirement of carbon credits has grown 56% with a specifically high demand in nature based avoidance projects. Accordingly, prices have also risen significantly, and this trend will continue in the near future. According to the results of a survey conducted by the Taskforce on Scaling Voluntary Carbon Markets, the volume and price of carbon offsets transacted is expected to soar in the coming decades, to 3.6 GtCO2 and US$ 54/tCO2e by 2050. Other market sizing models suggest the voluntary carbon market could even grow to 7 GtCO2e per annum. 

Source: Taskforce on Scaling Voluntary Carbon Markets (2020), Kick Off / Workshop 1

What to remember

In summary: In order to reach the targets set under the Paris Agreement (Net Zero), it is vital for organisations to invest in climate action projects. The voluntary carbon market is transparent and helps organisations to really measure their impact today and show their efforts. Nevertheless, in a successful climate transformation, carbon credits must only be treated as a complementary measure. The first priority should be to analyse and understand one’s own climate performance, then to set science-based targets and implement appropriate reduction measures, and finally to achieve climate neutrality with the help of carbon projects. Only with this approach and a holistic climate strategy is your company credible and able to actually reach the net-zero target. 

Your CHOICE EVENT
Would you also like to present your innovation or best practice in climate transformation? Then get in touch with us! Or join the next free CHOICE event and become part of the #TeamClimate community.