This year’s Earth Day offered the ideal opportunity to reflect on and renew commitment to climate action. The year-to-date has been eventful and is already offering up valuable learnings, particularly for those operating within carbon finance.
Just over two weeks into the new year, a combined investigation from The Guardian, Die Zeit and SourceMaterial took aim at the quality of Verra’s rainforest offset projects, questioning the carbon emissions reduction claims of these “phantom credits.” Critics of the market seized the opportunity to cast further doubt on the credibility and integrity of the market.
The ensuing dent in market confidence weakened demand and contributed to a significant drop in the price of carbon credits, which were already under pressure from the global energy crisis. Lower prices and thinner volumes continued for several weeks, causing several market participants to reassess their strategies and stall or divert investment.
Later, the Integrity Council for the Voluntary Carbon Market (IC-VCM) published their Core Carbon Principles, standards that seek to improve transparency and efficiency for carbon credits. This again sparked much conversation around the speed of progress, as well as the rigour applied when creating, tracking, and claiming credits.
The first quarter of the year revealed just how dynamic and divisive carbon finance can be. The VCM is a relatively nascent market (it’s a fraction of the size of the compliance markets), which aims to reduce emissions, positively contribute to biodiversity, protect nature, and create sustainable jobs). The market is aware that more work is needed to enable the growth required to achieve the Paris climate agreement’s net zero goal, and the coming year is set to bring further significant developments.
Public consciousness and sentiment is volatile and will continue to shift. As communications professionals operating in this space, we need to be agile and responsive, keeping our finger to the pulse of market developments.
The publication of the IPCC’s Sixth Assessment Report in mid-March, with its indictment that warming will exceed 1.5C during the 21st century, was an excellent newshook that allowed us to engage with critics of the market. We discussed the ways carbon finance fits into wider corporate decarbonisation pathways and climate mitigation plans. With time at a premium, businesses need to channel capital towards the most critical climate projects, institute strategies to decarbonise, and understand how to offset remaining emissions with confidence to achieve credible net zero.
As well as monitoring for newshooks, we need to be inclusive of all audiences, studying the news and views of market participants throughout the ecosystem - both those operating on both the supply and demand side, as well as governance professionals, NGOs and IP&LCs. We need to listen for multiple voices and engage in productive conversations that drive for the success of the market.
Finally, we need to prioritise clarity. We need to be breaking down barriers to understanding and engagement, translating the complexity to be digestible to the professional layman. And yet, at the same time, we need to supply the necessary level of detail to more technical experts. It is a difficult line to toe, but demystifying the market whilst identifying the unique triggers and perspectives of various stakeholders and audiences is crucial within carbon finance communications.
As we move beyond Earth Day, and with the IPCC’s report still ringing in our ears, communications professionals need to keep pace with a fast-moving market, monitoring for key market developments we can leverage to communicate clear messages that address both the amateur and the expert.
Olivia Newcombe is a senior account executive in Cognito’s London office