The vast majority of global businesses are looking to ramp up their decarbonization efforts at the same time as procuring credible carbon credits to offset emissions they otherwise cannot eliminate.
That is the headline conclusion of a major new report from Conservation International and the We Mean Business coalition of blue chip firms, titled "Corporate Minds on Climate Action: The current thinking, the key challenges, and the will to find a way forward."
The report found that 92 percent of business leaders see long-term decarbonization as a priority, with 89 percent adding that responsible use of carbon credits is important to this strategy.
"Carbon credits are proven tool for immediately reducing emissions, while also pursuing longer-term decarbonization ambitions," said Mr. M. Sanjayan, chief executive officer, Conservation International. "This study affirms that private-sector buyers are indeed gravitating toward high-quality credits, placing a premium on transparency and accountability."
Fully 100% of respondents stated that they have or already are working towards climate targets within their organization.
However, the survey also confirmed that business leaders share widespread concerns over the credibility of some carbon offsets. Over a third of respondents said they were actively investing in the voluntary carbon market, with just over half considering it as a viable option for meeting climate targets. But 44 percent voiced fears some carbon credit projects were guilty of greenwashing, a third said they faced challenges in evaluating carbon credit quality and 38 percent complained that a lack of regulation and transparency were a barrier to increasing investment in the voluntary carbon market.
The report surveyed views on corporate climate action from business managers engaged in sustainability from more than 500 global organizations in the U.S., U.K. and Europe.
It found that businesses recognize the urgent need to reduce greenhouse gas emissions, with 79 percent of respondents agreeing that science-based targets are "critical" for keeping companies on track to deliver on their climate goals. Fully 100 percent of respondents stated that they have or already are working towards climate targets within their organization.
However, the survey also found that despite the overall willingness from corporations to reduce their emissions and help keep global temperature rises below 1.5C, they still face challenges in meeting their decarbonization targets.
Over 85 percent said they see budget constraints, a lack of consistency and collaboration across their organization, and technological constraints as "major barriers" to reducing emissions and meeting targets.
As such, many businesses are adopting what the report authors describe as a "yes and" approach, whereby they are looking to invest in the voluntary carbon market alongside efforts to cut emissions at source.
Over half of respondents — or 51 percent — agreed that carbon credits will enable them to address climate impacts this decade while they work to directly reduce their emissions in the long-term.
If 1,700 of the world's highest emitting companies compensated for just 10% of their emissions through carbon market investments, more than $1 trillion could be mobilized by 2030.
Nearly 90 percent of respondents agreed carbon credits are important for businesses to either compensate for emissions that they are not yet able to eliminate, or to balance out residual emissions.
María Mendiluce, chief executive officer of We Mean Business Coalition, said that it was "encouraging" to hear that companies know they need to both cut their emissions and invest in nature beyond their value chains.
"Now that there are standards to ensure nature investments through carbon markets are impactful and responsible, we urge all companies to scale up their efforts," she added.
The carbon offset market remains controversial in some quarters, with campaigners warning that a lack of regulation and oversight means too many negative emissions projects fail to deliver promised emissions savings. Activists have also long warned that some businesses are using investments in carbon credits to justify continued investment in polluting assets and activities.
Today's report warns that addressing these long-standing concerns will be critical to unlocking much needed climate finance in negative emissions projects over the next decade and beyond.
A recent analysis from the We Mean Business coalition found that if 1,700 of the world's highest emitting companies compensated for just 10 percent of their emissions through carbon market investments, more than $1 trillion could be mobilized by 2030.