UNDERSTANDING VOLUNTARY CARBON OFFSETS: A REVIEW OF BEST PRACTICES FOR CORPORATE PARTICIPATION IN THE VOLUNTARY CARBON MARKET AND AN ANALYSIS OF OFFSET-RELATED DISCLOSURES

Abstract

Controversy surrounding the quality of offsets sold in the voluntary carbon market (VCM) has led to the emergence of multiple verification bodies, governance schemes, and planning resources. Investors, who increasingly link climate risks and decarbonization strategies to companies’ bottom lines, are interested in evaluating the quality of selected VCM offsets and their use in corporate climate transition plans. For the project client, State Street Global Advisors (SSGA), this report provides: (1) a review of the available literature, frameworks, and resources for offset quality assurance and use; (2) key takeaways from an analysis of corporate carbon offset disclosures; (3) questions for engagements with companies utilizing VCM offsets; and (4) a best practices reference guide for offset selection and utilization.