Offsets as Ordered: Buyer Due Diligence to Ensure Carbon Credit Quality

Very little seems certain in the voluntary carbon markets (VCM) right now, except this: everyone in the market or writing about the market has opinions on how to improve supply and/or demand-side quality.

While several high-profile working groups, like the Voluntary Carbon Markets Integrity Initiative (VCMI) and the Integrity Council for the Voluntary Carbon Markets (IC-VCM), promise to set a clear bar for quality, it remains to be seen whether they can fully accomplish these goals.

In the meantime, buyers of voluntary carbon credits face increasing scrutiny in a rapidly changing, hard-to-define market. How do they manage these risks? What steps do buyers currently take to ensure they receive high-quality credits?

We asked these questions to 24 demand-side actors, which included a mix of end buyers, investors, resellers, and credit portfolio consultants, along with a handful of other demand-side stakeholders. The findings in this report were derived from the 12 survey responses and 20 informal interviews we conducted with these participants.

Our questions sought to uncover what due diligence buyers conduct when they transact carbon credits. Through this study, we hope to:

• Help buyers share insights to make the due diligence process easier for all via roundtable discussion on topics raised in this report,
• Enable buyers to advocate for high quality in carbon markets, Inform the standards of buyers’ perceived weaknesses within their programs, helping them improve methodologies, communications, and information, and
• Provide insights to ongoing working groups focusing on market integrity to help them create achievable and realistic guidance.

Buyers are uniquely positioned to influence the VCM and ensure the market bends towards the production of higher-quality projects and programs. The achievement of high-quality credits ultimately comes down to the demand side. Without robust due diligence and advocacy from buyers, carbon markets will not reach their potential in addressing climate change.