In response to increased scrutiny of the rapidly expanding carbon offset market, a group of investors in charge of $11 trillion in assets has prohibited its members from counting carbon removal programmes towards their emissions reduction targets before 2030.
On Tuesday (31 Jan), the Net Zero Asset Owner Alliance (NZAOA) said its focus is on encouraging its investee companies to focus on reducing their emissions across multiple sectors, rather than removing already-existing carbon from the atmosphere by offsetting. Differentiating these two forms of emissions reductions is a major point for the organisation.
The United Nations said that carbon removal will be vital to slowing climate change by 2050, but that doesn’t negate the uncertainty currently shrouding the tactic. A recent report revealed that more than 90 per cent of offsetting credits approved by the world’s biggest offset provider are not reflective of the promised emissions reductions. The Integrity Council for the voluntary Carbon Market is in the process of creating new standards, although there is still much debate surrounding the integrity of carbon credits.
Progressing towards more sustainable practices, the new policy applies to NZAOA members and the companies that they invest in. The NZAOA continues to encourage members to support the growth of a liquid and fully transparent market for carbon removal certificates in the long run.
“Investments in high quality carbon removals will encourage demand and the development of the market,” said Jessica Andrews, UNEP FI investment lead and senior project manager for NZAOA.
“However … we expect members to prioritise real world abatement (decarbonisation) at least until 2030.”