Business leaders have collaborated to produce guidance for companies looking to integrate natural climate solutions (NCS) into their corporate sustainability strategies, in a bid to help firms meet net zero and nature protection goals.
The guidance, publishedJuly 15 by the World Business Council for Sustainable Development (WBCSD) and the World Economic Forum (WEF), sets out a string of principles for companies looking to integrate natural climate solutions into their sustainability strategies, starting with a call for all investments to enhance, rather than dilute, a company’s contribution to climate goals. As such, the guidance stresses that companies should prioritize reducing their absolute emissions before investing in any NCS credits.
The document, “Natural Climate Solutions for Corporates,” also emphasizes that natural climate solutions should be seen as an interim solution for companies to compensate hard-to-abate emissions, not as a permanent fixture in climate plans. “NCS credits should be considered an enabling solution that will support long-term sustainable land use,” it notes.
Carbon project developers must implement projects that follow sound and verified carbon measurement and accounting methodologies and apply rigorous environmental and social safeguards, the guidance notes, in a move designed to help provide a framework to deliver a robust carbon market founded on high-quality nature projects that benefit the climate, biodiversity and local communities.
The NCS Alliance, the multi stakeholder coalition of more than 40 civil society and business leaders behind the report, said it hoped the guidelines would help unlock the full potential of natural climate solutions.
The report notes that investment in NCS activities falls drastically short of levels required for the nascent market to achieve its full climate mitigation potential, noting that the $170 million invested in the voluntary carbon market in 2019 is only a small fraction of the $10 billion to $100 billion target for 2030 set out by some analysts.
Thomas Lingard, global climate and environment director at Unilever and NCS Alliance steering committee member, pointed out the new rules were timely in the wake of escalating interest in natural climate solutions from business, prompted by growing concern about deforestation, biodiversity loss and climate change.
“The complexity surrounding emissions reduction pathways, net-zero targets, carbon credits and company claims is a barrier to many companies taking action,” he said. “Appropriate guidance to help businesses structure their climate strategies is needed.”
Maria Mendiluce, CEO of the We Mean Business coalition, emphasized that nearly a third of the emissions reductions required this decade for a pathway in line with the Paris Agreement’s less stretching warming target of 2 degrees Celsius could be supported by NCS.
“The global community must catalyze business and policy action to halve emissions by 2030 and accelerate an inclusive transition to a global net zero economy by 2050,” she said. “To get there we must now go all in for 2030. And if we are all in for 2030, we need to be all in on natural climate solutions, where we can unlock 30 percent of the climate solution in the next 10 years.”
The voluntary carbon market has long been the subject of intense debate. Advocates argue it provides a mechanism for delivering emissions reduction, primarily through the protection and expansion of natural ecosystems, while also funneling climate investment into developing economies and nature protection. As such the sector has grown rapidly in recent years as more businesses have sought to become “carbon neutral” or deliver on net zero goals.
The complexity surrounding emissions reduction pathways, net-zero targets, carbon credits and company claims is a barrier to many companies taking action.
However, critics have warned that while it is vital to expand natural carbon sinks the carbon offsetting sector remains under-regulated, often struggles to deliver promised emissions reductions, and can provide cover for businesses that are taking minimal steps to curb their own emissions.
Consequently, calls have grown in recent years for the rapid adoption of more robust policing and governance mechanisms for the sector. Former Bank of England governor Mark Carney is leading a Taskforce on Scaling Voluntary Carbon Markets to explore how to enhance the integrity of the market so as to accelerate the flow of finance to emission reduction projects, which published an update on its proposals for how to strengthen the market earlier this month. However, the taskforce’s work was again criticized by some environmental campaigners who warned the proposals amounted to a “get out of jail free card” for polluting companies that would allow them to “greenwash their ongoing emissions at exactly the time the world needs to dramatically cut them.”
But earlier this month the WEF and WBCSD touted its new guidance for NCS investments as a potential “game changer” in the race to unlock more financing for credible nature projects that can help tackle climate change. “With the right guardrails, as outlined by ‘Natural Climate Solutions for Corporates,’ private sector investment in NCS could be a transformative part of our transition to a world in which more than 9 billion people can live well, within planetary boundaries,” said Claire O’Neill, former U.K. energy minister and managing director of WBCSD’s climate and energy program.
The debate over the merits of natural climate solutions, nature based solutions and carbon offset credits will rage on and the topic is likely to emerge as a major flashpoint at the upcoming COP26 Climate Summit in Glasgow. But any business considering investing in nature to help meet their net zero targets would be wise to ensure their efforts are in line with the most robust and demanding guidelines available, as a bare minimum.