Principles for carbon offsetting
Insights

Principles for carbon offsetting

There has been increasing pressure on corporates to reduce their greenhouse gas emissions to limit global warming to 1.5 degrees, including from investors through engagement. This has led to many companies committing to achieve net zero emissions. While reducing emissions is an evident priority to limit warming to 1.5 degrees, often eliminating residual corporate emissions is either expensive or not yet technologically feasible. Thus, many net zero commitments either implicitly or explicitly rely on carbon ‘offsetting’: where carbon emitters purchase verified units of greenhouse gas emission reduction or removal to compensate for remaining emissions. Emitters are increasingly turning to the voluntary carbon market to source these carbon offset credits, or developing offset projects themselves, particularly through Nature Based Solutions (NBS).

The voluntary carbon market is growing quickly to meet this increasing demand. Over $1bn worth of carbon credits were transacted on the market for the first time in 2021, a three-fold increase on 2020. However, with this rapid expansion has come considerable growing pain. Critiques of the market focus on the legitimacy of the claims made by both credit sellers and credit buyers. Some projects which sell credits have been criticised for failing to have the additional and long-term climate impact they claim, and for generating negative environmental and social side effects. Credit buyers can be embroiled in project level controversies and can also be accused of greenwashing if they conduct profligate purchasing of offset credits with limited efforts to decarbonise. Even legitimate offset buyers and sellers face reputational risks due to the current lack of consensus on what constitutes credible offsetting.

We have a strong history of active engagement with the companies we hold and those we engage with on behalf of our Reo clients. Here we aim to communicate our perspective on when companies should use offsets, which offsets they should be using, and how companies should use and disclose on their use of offsets. Our principles build on the established quality standards already in the market but aim to raise the level of expectation. Our intention is that we will revisit and revise these principles as the voluntary carbon market evolves.

Interested in learning more? We explore how nature can be a powerful ally in the fight against climate change. Download the full viewpoint to discover more.

4 April 2022
Joe Horrocks-Taylor
Joe Horrocks-Taylor
Senior Associate, Analyst, Responsible Investment
Share on linkedin
Share on email
Hauptthemen
Verwandte Themen
Listen on Stitcher badge
Share on linkedin
Share on email
Hauptthemen
Verwandte Themen

PDF

Principles for carbon offsetting

Risk Disclaimer

Views and opinions have been arrived at by Columbia Threadneedle Investments and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.

The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.

Verwandte Beiträge

14 Juni 2024

Natalia Luna

Senior Thematic Investment Analyst, Global Research

US elections: the Inflation Reduction Act and the risk of repeal

A full reversal is considered unlikely, but we believe the possibility of a partial repeal, which could see tax credits and funding programmes weakened, is underappreciated. Here is how Columbia Threadneedle will assess this risk and the potential implications for the most exposed sectors.
Read time - 3 min
21 Mai 2024

Pauline Grange

Portfoliomanagerin, Globale Aktien

Water in crisis – searching for solutions

With too much, too little or too toxic water the world is facing a water crisis. We explore key issues and challenges before highlighting some of the companies promoting better water management.
Read time - 3 min
15 Mai 2024

Albertine Pegrum-Haram

Senior Associate, Responsible Investment

Dekarbonisierung von Stahl: Neudefinition der Wertschöpfungskette und der Rolle der Eisenerzkonzerne

Wie man „grünen Stahl“ herstellt, denn Recycling kann uns nur halbwegs weiterbringen. Eine Umstellung auf umweltfreundlichen Stahl bedeutet neue Möglichkeiten.
Lesezeit - 1 min
14 Juni 2024

Gene Tannuzzo

Global Head of Fixed Income

Fixed-income outlook: Shifting opportunities for bond investors

In an environment of tighter credit spreads, investors will have to look closely to find relative value.
Read time - 1 min
14 Juni 2024

Natalia Luna

Senior Thematic Investment Analyst, Global Research

US elections: the Inflation Reduction Act and the risk of repeal

A full reversal is considered unlikely, but we believe the possibility of a partial repeal, which could see tax credits and funding programmes weakened, is underappreciated. Here is how Columbia Threadneedle will assess this risk and the potential implications for the most exposed sectors.
Read time - 3 min
11 Juni 2024

Fixed Income Desk

In Credit - Weekly Snapshot

In Credit Weekly Snapshot – June 2024

Our fixed income team provide their weekly snapshot of market events.
Read time - 5 min
true
true

Risk Disclaimer

Views and opinions have been arrived at by Columbia Threadneedle Investments and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.

The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.

Das könnte Ihnen auch gefallen

Investmentansatz

Teamwork bildet eine wichtige Grundlage unseres Anlageprozesses, der so strukturiert ist, dass er die Ausarbeitung, Bewertung und Umsetzung fundierter und vielversprechender Anlageideen für unsere Portfolios erleichtert.

Fonds

Columbia Threadneedle Investments bietet eine umfangreiche Palette von Investmentfonds an, die eine Vielzahl von Anlagezielen abdeckt.

Anlagekapazitäten

Wir bieten eine breite Palette aktiv verwalteter Anlagestrategien und -lösungen für globale, regionale und inländische Märkte und Anlageklassen.

Bitte bestätigen Sie einige Angaben zu Ihrer Person, um Ihr Präferenzzentrum zu besuchen

*Pflichtfelder

Etwas ist schief gelaufen. Bitte versuche es erneut

Vielen Dank. Sie können jetzt Ihr Präferenzzentrum besuchen, um auszuwählen, welche Einblicke Sie per E-Mail erhalten möchten.

Um zu sehen und zu aktualisieren, welche Erkenntnisse Sie von uns per E-Mail erhalten, besuchen Sie bitte Ihr Preference Center.