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Firms Engaging in VCMs Outperform Peers

New research suggests that companies participating in voluntary carbon markets (VCMs) are showcasing leadership in climate action, accountability, and ambition. The study, conducted by Forest Trends’ Ecosystem Marketplace, reveals that these companies are surpassing counterparts that do not purchase carbon credits, as they are actively reducing their emissions at an accelerated pace compared to their peers. In fact, they are 1.8 times more likely to be decarbonising year-over-year, indicating a strong commitment to carbon reduction. The report highlights that the median voluntary credit buyer invests three times more in emission reduction efforts within their value chain. These investments encompass a wide array of activities, such as renewable energy consumption and the purchase of Renewable Energy Certificates (RECs), demonstrating a holistic approach to sustainability. Voluntary carbon buyers also set more ambitious climate targets, with firms 3.4 times more likely to have an approved science-based climate target. Additionally, they are 1.2 times more likely to have board oversight of their climate transition plans and three times more likely to include Scope 3 emissions in their climate targets. The study points out that companies are increasingly willing to pay a premium for high-quality carbon credits, underscoring their commitment to supply-side integrity. In 2021, VCMs were valued at US$2 billion, with industry experts predicting significant growth to reach between US$10-60 billion by 2030. Stephen Donofrio, Managing Director of Forest Trends’ Ecosystem Marketplace, said: “Our data indicate that corporate voluntary buyers are using science to backstop their investments into a suite of climate solutions, including project-based carbon credits. As companies are being called on to accelerate their efforts to address GHG emissions in their value chains and decarbonize their operations, our market analyses consistently show that companies investing in voluntary carbon markets are outperforming their peers across a range of key indicators.”

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