The voluntary carbon market is vast and confusing. Every week it feels like there is a new methodology coming out to verify a different version of a carbon offset project or the birth of an organization promising to overhaul the credibility of the market.
As a corporation looking to fund carbon removal investment or avoidance of emissions, it can feel overwhelming to know what is significant and worthwhile or what is greenwashing and should be avoided. And while there isn’t one standard or organization to rule them all, corporations will have to wade through the confusing landscape.
Here are the organizations that are important in the voluntary carbon market and what they do.
Voluntary Carbon Market Integrity Initiative (VCMI)
An integrity initiative is an organization working to improve the quality, accuracy and credibility of credits and claims that swirl around the carbon market. The VCMI was started in March 2021 with the goal to bring confidence to carbon credit purchasing for corporations. The VCMI addresses the demand side of carbon credits, a.k.a. corporations. The organization creates guidance that will advise companies how to buy high quality credits that are making a positive climate impact.
So far the organization has released its Claims Code of Practice for buying credits, its Access Strategies Toolkit for countries engaging in the voluntary carbon market, Criteria for Voluntary Carbon Market Claims and other white papers, proposals and feedback.
The VCMI is headed by Mark Kenber, executive director. He is the former CEO of The Climate Group and a board member of ICVCM and Verra (explained below). It’s steering committee includes Rachel Kyte, dean of the Fletcher School at Tufts University, Tuntiak Katan Jua, a native of the Ecuadorian Amazon town of Shuar and a leader in indigenous rights and Usha Rao-Monari, under secretary-general and associate administrator of the UN Development Programme (UNDP). It’s expert advisors include representatives from KPMG, Unilever, CDP and the High Tide Foundation.
Integrity Council for the Voluntary Carbon Market (ICVCM)
To add to the alphabet soup is the ICVCM, also formed in 2021, which addresses the supply side of the carbon credits world. The organization focuses on creating guidance and rules for carbon crediting projects and project developers to ensure fulfilled additionality, durability and leakage requirements (read more about those in this GreenBiz 101 on offsets).
The organization published its 10 Core Carbon Principles and a program-level assessment procedure in April as global benchmarks for evaluating high integrity carbon credits. Projects that adhere to these principles can retain ICVCM’s stamp of approval when it credits go to market.
The Integrity Council consists of 22 board members including chair Annette L. Nazareth, who has a background in law and financial service. Among the other 21 is Sonja Gibbs, leaders of the Institute of International Finance’s work on sustainable finance and debt policy; Carl Wesselink, director of South South North (SSN), where he oversees a portfolio of climate related programs; and Michael Hugman, director of Climate Finance at the Children’s Investment Fund Foundation.
Carbon credit registries
Verra is one of the best known names in the voluntary carbon market space since it began in 2007. The nonprofit is a leader in setting the standards — creating methodologies and verifying carbon offset projects around the world. When companies buy credits, many of them will be verified and certified using Verra’s standards. Verra has methodologies on everything from improved forest management to fuel switching.
The organization works with governments, businesses, project developers and third party verifiers to ensure the credibility of the carbon credit projects. Potential projects submit answers to questionnaires, as well as undergo a third party verification visit to confirm claims. It also runs a carbon crediting registry which is a central repository for retiring and transferring carbon credits and keeping track of how many tons of carbon a project has removed or avoided from the atmosphere.
It’s headed by CEO Judith Simon; previously vice president of Zillow group, Farhan Ahmend; chief program office coming from Fair Trade; and chief program development and innovation officer Tony Janson Smith; who has decades of experience creating standards for environmental policies.
The Gold Standard
The Gold Standard is the other common name when it comes to carbon registries and methodologies. Founded in 2003, Verra’s direct competitor also creates standards and methodologies for carbon crediting projects regarding everything from accelerated carbonation of concrete to animal manure management of biogas. Its impact registry is publicly available to track the environmental assets (a.k.a. carbon credits) of its customers.
The Gold Standard is led by Margaret N. Kim as CEO from 2019. She came to The Gold Standard from Green Climate Fund Liaison in the Office of Director-General for the Global Green Growth Institute (GGGI).
The American Carbon Registry
The third in this row of carbon crediting bodies is The American Carbon Registry (ACR). Founded in 1996, it was actually the first private voluntary greenhouse gas registry. Mary Grady, president and CEO, has been at ACR for 15 years. She oversaw the ACR’s involvement in historic environmental policies such as CORSIA and the California Offset Project Registry.
The ACR is also developing and approving new methodologies for creating carbon credits. Earlier this year, ACR approved a carbon crediting methodology for plugging abandoned oil and gas wells. The organization is also heavily involved in California’s cap-and-trade offset program to oversee and verify the state’s offset projects.
While Verra, Gold Standard and the ACR work on both removals and avoided, Puro.Earth has put all of its focus behind removals. Like the three above, the organization has its own registry and standards — but only for carbon removals. It focuses mostly on engineered carbon removals, not nature-based solutions, and has methodologies for biochar, enhanced rock weathering, woody biomass and others.
Puro.Earth was founded in 2018 and acquired by Nasdaq in 2021. It used to have a marketplace where buyers and sellers could meet and make transactions but that was discontinued in 2022. Unlike the other registries, it is a private corporation.
The company created the CO2 Removal Certificate (CORC) that independently verifies when one metric ton of CO2 has been removed and durably sequestered from the atmosphere. It also created the CORC Index to track the price of sequestered carbon, since prices in the carbon market are famously opaque and don’t always follow common sense economic principles.
The CEO and founder is Antti Vihavainen, with Marianne Tikkanen as head of carbon crediting programs.
There are many other smaller registries trying to compete with the big boys, or simply carving out more specific niches. This includes the likes of Isometric, while others, such as The Climate Action Reserve, have been on the market for a while.
Rating agencies are another tool the voluntary market is using to try to add credibility in an uncertain world of offsets. Calyx was founded by Donna Lee, a former consultant, and Ducan van Bergen, previously a vice president of nature-based solutions at Shell.
The online platform lets investors, companies and other buyers look up a project’s score to see the impact that project is making on removing carbon from the atmosphere. These can help companies avoid bad projects and focus on the good ones. The company has worked with partners such as GHG Management Institute, Climate Law and Policy, Climate Focus and Carbon Limits to develop its ratings approach.
Another ratings platform that starts with a risk assessment on the project’s sector and geography. The ratings system uses satellites to monitor the projects in real time and divides them based on different sub-sector metrics, such as cookstove projects versus landfill gas projects.
Founded in April 2020, the team consists of Ph. Ds, geospatial experts and ratings professionals. Tommy Rickets, former vice president of Merril Lynch, is CEO and founder. Mani Gangadharan Venketachalam joined as president in 2022 after leaving the same position at Crisil, a global ratings and analytics company and part of S&P Global, and was previously the CEO of Moody’s Analytics Knowledge Services.
Probably the best known name in the carbon credits rating world is Sylvera. Started in 2019 by Allister Furey and Sam Gill, the two have gotten Salesforce, Shell, Boston Consulting Group, Mitsubishi, Bain and many others as Sylvera clients.
Touting machine learning and proprietary data, Sylvera supposedly gives the best analysis of carbon credits in the sector. Currently, Sylvera is rating the reduction of deforestation and forest degradation (REDD+), afforestation, reforestation and revegetation (ARR), improved forest management (IFM) and renewable energy source (RES) projects.
The rating assesses the likelihood that the credits issued by a carbon project have delivered on their claims of avoiding or removing one metric ton of carbon dioxide from the atmosphere. The company also includes co-benefits into their calculation like biodiversity and water quality improvements.