July, 2021

It’s Time to Move the Discussion on Corporate Support for Natural Climate Solutions Forward

By James Lloyd, Nature4Climate

This, in part, requires a trust building exercise

N4C was founded with a simple mission: to promote the critical role that natural climate solutions (NCS) play in restoring balance to our climate, while also promoting the many other social and environmental benefits they deliver.

Our work expands across a broad portfolio. It includes shaping high-level narratives, including NCS being a third of the climate solution, “nature-positive” recovery from COVID-19, and now, increasingly, Nature Tech. Developing and framing important NCS milestones, including the nature agenda at the upcoming climate summit in Glasgow. Working with partners on ambitious campaigns, like the one to shift the trillion dollars of investment away from activities and companies linked to deforestation and towards sustainable land use practices. And advocating for the wider and more robust inclusion of NCS in countries’ nationally-determined contributions. These are all essential elements of unlocking the NCS opportunity.

But there is one area that is attracting an outsized amount of attention and is facing a thorny tangle of challenges: mobilizing private sector finance through voluntary carbon markets for NCS carbon credits. There is much debate around the quality of these carbon credits and on the appropriate use by companies seeking to reduce their climate footprint.

 

Mobilizing private sector finance for NCS carbon credits has attracted much attention and debate

NCS Alliance report

Against this backdrop, the new report by the NCS Alliance is a welcome contribution. It is an important step for determining the guardrails and building a foundation for growing the market on the basis of integrity, in line with the goals of the Paris Agreement. It is clear that more work will need to be done on ‘claims’ as and when negotiations on Article 6 conclude, but we congratulate this initiative for managing a diverse group of stakeholders, and moving the discussion in a positive direction.

However, as happens whenever the bugbear of corporate participation in carbon markets is raised, I expect there will be a significant amount of pushback. The fear is that NCS are being used as a greenwashing ploy to excuse inaction on much needed decarbonization efforts.

This is a legitimate concern. As a campaigner who has worked in the space for the last 20 years, I can attest that corporations have given the environmental and climate communities too many reasons to be distrustful over the years. Unfortunately, there are still examples of corporates thinking of NCS primarily, and cynically, in terms of their PR value, particularly from the fossil fuel industry.

But as someone who works in this space day-in and day-out, I can say that I have seen a significant shift in the past few years. On the one hand, the general principle that companies must focus on urgent and deep emission reductions first and foremost is well established – and is a core tenet of the NCS Alliance report. I can’t think of a single example of any of the environmental NGOs, intergovernmental organizations or other stakeholders we work with who disagree with this fundamental starting point. On the other hand, I can honestly say that more and more leading companies are engaging in discussion around NCS in a much more robust and sincere manner; less for public relations, more for positive change. Companies are seeing the potential impacts of climate change and nature loss much more clearly than before; and they are also seeing public opinions sharpening on these issues.

The difficulty is that many of those criticizing NCS carbon credits aren’t being completely forthright about the basis of their objections. Opposition on the basis of an ideological, anti-market position is legitimate, but it’s important to be upfront about this, so it’s clear if the criticism is constructive, and designed to help move the NCS effort forward, or if it’s destructive, trying to erode support for the whole concept. (I am happy to have this argument, I just want to know what argument I’m having). Poking holes in a ship in the hopes of sinking it is very different than pointing out holes in the hopes of plugging them.

At N4C, we believe that the scale of the climate threat requires us to leverage every solution available. While carbon markets aren’t the only solution or channel for private finance, they are an important one, as part of an “all tools” approach. What’s more, it’s clear that they are here to stay. So our position is: let’s work together to continue to make them better. It’s about bringing every solution to bear on the crisis, and making these solutions as robust as possible with the time we have. So long as the overarching principle of urgent emission reductions is upheld, blocking other solutions is potentially disastrous.

The basis for building trust

I believe the story of NCS is a story of progress. What’s needed is an honest reflection on the NCS journey, encouragement of best practices and clearer distinction of good from bad. The goal is to make this a story about continuous improvement, rather than one about limitations. This is the basis for building trust.

Currently, lack of trust revolves around three areas:

First, lack of trust in the environmental integrity of NCS. While acknowledging there are valid concerns to address, it’s important to highlight the progress being made in the science, methodologies and technology related to the deployment, measurement, monitoring and verification of NCS.

Second, lack of trust in social inclusion of NCS. Will NCS, including REDD+ activities, harm Indigenous Peoples and local communities by infringing on or undermining their traditional rights, roles and responsibilities? While pointing to where there are still specific challenges, we can do a better job of highlighting real-world case studies where NCS are deployed with the full leadership, consent and participation of Indigenous peoples and local communities, and where they are delivering real benefits to these groups.

Third, lack of trust in the corporate use of carbon offsets generated from NCS projects and programs. There are a number of initiatives that are working on ensuring integrity and that have provided or will soon be providing valuable guidance, including the Oxford Offsetting Principles, Together with Nature, the Race to Zero, Science-Based Targets Initiative and the  Voluntary Carbon Markets Integrity Initiative.

N4C is looking forward to working with these initiatives to move the discussion forward by focusing on what leadership looks like in terms of how companies think and talk about their support for external NCS emission reductions and removals: to rebuild the conceptual and communications frameworks around companies’ investment in these projects and programs, their reasons for doing so, and the role this support can play in achieving the global goal of net-zero.

The good news is that we are already seeing examples in the real world. To give just a few examples:

  • For example, among many other commitments, Microsoft has promised to draw down more carbon than it emits by 2030 and by 2050 to draw down enough to offset all company emissions since its founding in 1975.
  • Members of the LEAF Coalition are clear that their support for external emission reductions is in addition to having robust science based targets, and aims to help achieve the global goal of deforestation.
  • Nestlé is investing in ending deforestation and forest restoration in Ghana and Côte d’lvoire.

These are all developments that can be welcomed as positive signs of progress, and this can be done in a way that does not give a wholesale endorsement or that notes where improvement is needed and possible.

 

Examples of NCS being already exist and are being implemented today

This raises the exciting prospect for companies to go “above and beyond” internal mitigation targets by viewing climate action not only within the silo of reducing their own emissions, but within the context of the impact they can make toward the collective, effort to achieve global climate, biodiversity and development goals. This represents a shift in thinking from how to “minimize harm” to how to “do good.” Or, how to drive “bigger emissions reductions in the broader world,” as the founding members of the new Drawdown Lab put it. This doesn’t mean that companies should lose focus on zeroing their carbon footprint as deeply and as quickly as possible, and considering the legitimate bridging function NCS can play; it means that they should understand how these efforts fit into the broader landscape of climate action, and identify when and where additional action is possible.

To succeed in changing the way companies think and talk about NCS, we have to acknowledge that we will likely need to develop new terminology, or a new lexicon, for communicating the journey companies are on, that builds on what’s come before, but which more clearly defines what leadership looks like. Beyond “net-zero” and “carbon-neutral,” what terms can help us bring more color and clarity to this space?

Our planet faces dual crises: rapid climate change and biodiversity loss. We have years, not decades, to address these existential threats to our ways of life. The planetary emergency requires every solution available to us. We must implement solutions transparently, inclusively, and equitably. The rapidly evolving carbon markets have the potential, in combination with other strategies, to support meaningful mitigation of greenhouse gas emissions, as well as provide valuable conservation co-benefits for people and nature. We all must be committed to continuous improvement to maximise benefits to biodiversity, sequester carbon, and reduce risks to people most vulnerable from a changing climate. As we emerge from this emergency we must appreciate the diverse perspectives, active debate, but we must also approach this debate with honesty, respect, curiosity and recognise the humanity in each other.

The Nature4Climate team will be following up on this opinion piece with a dedicated piece on finance reports shortly. To keep up to date on the latest news, views, and science in the world of nature-based solutions, sign up to our newsletter.