A Buyer’s Guide to Corporate Offsetting and Navigating the Voluntary Carbon Market
A Buyer’s Guide to Corporate Offsetting and Navigating the Voluntary Carbon Market
Environmental Commodities Strategist, BMO Capital Markets
Rachel Walsh is the Environmental Commodities Strategist within BMO Capital Markets, focusing on market fundamentals for multiple environmental commodities to help …
Rachel Walsh is the Environmental Commodities Strategist within BMO Capital Markets, focusing on market fundamentals for multiple environmental commodities to help …
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The voluntary carbon market (VCM), enables the transfer of capital on a voluntary basis to help fund carbon crediting activities that avoid, reduce, or remove carbon dioxide equivalent (CO2e) emissions from the atmosphere. While this market has existed for decades, it saw a recent meteoric rise in popularity with the explosion in corporate climate commitments resulting in an increased appetite for carbon credits. Within a few years, this rise was followed by a precipitous fall, due in part to scrutiny from media sources largely questioning market integrity.
Despite the voluntary market's challenges, a growing majority of corporate leaders are interested in buying carbon credits. The 2023 BMO Climate Institute Business Leaders Survey found that 53% of corporate decision-makers in the U.S. and Canada, across companies of all sizes, are interested in buying carbon credits, up from 47% in the previous survey.
However, only 19% of business leaders say they have a strategy that aligns their carbon credit purchases with specific sustainability goals. More than a third of respondents (34%) say their company encourages the use of carbon credits but do not have a formal strategy.
In this white paper, we aim to help buyers understand the many elements that lead to quality differentiation and explore how companies can adopt an offsetting strategy in a way that is aligned with a net-zero outcome.
