Blackmores ISO Consultancy Service: The creators of isology®

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There has been a global shift towards the sustainability effort in recent years, highlighted by various regulations and schemes aimed at businesses to help encourage a more sustainable way of operating.

This has led to more focus on the voluntary use of carbon markets, in which companies help to fund decarbonisation projects by buying carbon credits.

In this episode Mel is joined by Tiffany Cheung, the Corporate Engagement Lead at carbon markets data company AlliedOffsets, as they discuss the landscape of the market, including current trends, decarbonisation challenges in different sectors, and top tips for navigating the space.

You’ll learn

• What impact will corporate disclosures have on the carbon markets?
• What are the rates of decarbonisation across different sectors?
• What are the emerging buyer trends within the voluntary carbon market?
• What is an internal carbon price?
• How can companies use a carbon price to ensure that their sustainability goals are financially viable?
• How can AlliedOffsets’ data help companies when entering the carbon market?
• What are the critical steps businesses should take to mitigate price volatility and ensure that they’re investing in high quality, impactful carbon offsetting projects?

Resources

• AlliedOffsets
• AlliedOffsets LinkedIn
• AlliedOffsets Corporate Emissions Data and Findings
• Carbonology

In this episode, we talk about:

[00:30] Episode Summary – Tiffany Cheung joins Mel to discuss buyer trends in the voluntary carbon market (VCM), including insights on the use of internal carbon prices and top tips for businesses looking to enter the market.

Don’t forget to catch-up on the previous episode where Tiffany explains what the voluntary carbon market is and gives an insight into the lifecycle of carbon credits.

[01:30] What impact will increased corporate disclosures have on the carbon markets? There are 2 main points:

1. Already on the Agenda: Increased corporate sustainability disclosure may already fit into the changes that are taking place within the thinking of a company.  If a company is spending time on creating and publishing reports on their sustainability initiatives, it is likely that they will  be exploring their options for how they can take action more broadly.This is likely to be associated with increased engagement with the voluntary carbon markets, both through offsetting of carbon footprints and investing in carbon credits or project developers.
2. Project Developer benefits: Project developers will likely benefit from increased insight to the kinds of projects that buyers are purchasing credits from. As a by-product, there may be more focused projects created based off what certain sectors are willing to offset or invest in.

[02:55] What are the rates of decarbonisation across different sectors? To give a macro view from the public data available in corporate sustainability reports over the last few years, the biggest total polluters by sector continue to be energy, maritime, transportation and materials and mining.

Looking at the positives, the energy sector, which has historically been the biggest polluter, has decreased its emissions in both scopes 1 and 2 since 2019. However, there’s still a very long way to go, and with major emitters recently rolling back their climate commitments, one shouldn’t assume that that trend will continue linearly.

Another sector facing an interesting decarbonization journey is aviation, whose emissions have been increasing in recent years, although not quite to pre-COVID pandemic levels. This sector will have to grapple with its emissions whilst contending with forecasted growth in both consumer and business travel over the next decade. Many aviation companies are both committed to Science Based Targets initiatives (SBTi) and fall under CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation), applying pressure on the sector to decarbonize as a whole.

On a positive note, 18 sectors assessed by AlliedOffsets have decreased their average carbon emissions in scope 2 over the past few years, due in large part to increased renewable energy sourcing and improved energy efficiency.

[07:10] What are the emerging buyer trends within the VCM?: AlliedOffsets are in a particularly good position to provide insight to this due to their comprehensive view of both historic buyer activity and new market entrants across the world.

Chinese and German manufacturers have become a steady presence in the market, distinguished by their especially detailed credit retirement information. They’ll go as far as to specify the products and operating periods that are being offset, showing really high levels of engagement with their environmental impact and giving clear insight on their targeted offsetting approach.

Another buyer trend to highlight is occurring within the Australian market, where AlliedOffsets is seeing lots of credit retirement associated with the carbon neutrality certification scheme Climate Active. This is driving most voluntary retirements from the region, particularly from real estate and pension funds.

[09:15] What is an internal carbon price? An internal carbon price is a specific cost or budget set by a company for the carbon or other greenhouse gas emissions that are associated with their specific business activities.

This is typically based off of something like the World Bank calculations on the cost of climate change to society, or it could be based on the price of carbon set by an compliance emissions trading scheme (ETS) that is local to that business.

[10:20] How can companies use a carbon price to ensure that their sustainability goals are financially viable?: For example, EasyJet has an internal carbon price that’s based off of the UK emissions trading scheme. That internal carbon price is factored into the airline’s master financial models and that drives their 5 – 10 year long financial plans. That helps to determine things like the geographical routes that EasyJet operates, which can affect profitability. An internal carbon price makes emissions tangible and material, playing a role in the wider business decisions. An airline operator is considered a big emitter and is likely to already be exposed to some kind of compliance carbon scheme which has a financial impact on the company.

Nonetheless, having an internal carbon price can be useful regardless of how big your business is, as it can be used to budget certain activities and see where emissions might be centralised in a particular department.

An example of this in practice may be that you have an internal carbon price of £50 per tonne, you can take that to an emissions calculator or advisor to work out a budget based on the carbon footprint of different activities or departments in the business. The idea being that if you can identify the cost associated with the emissions created, you know how much to spend to decarbonize. This process may also highlight where you can make further reductions, i.e. reducing air travel and supporting staff on switching to less polluting forms of transport.

[12:55] How can AlliedOffsets data help companies interested in an internal carbon price?: AlliedOffsets has data on the carbon pricing programmes used by companies to set their internal carbon price, as well as the specific price itself for hundreds of different companies.

This dataset also includes companies that haven’t chosen to use a particular pricing scheme but have set an internal carbon price based just off of their unique activities. 

This helps to contextualize the current range of internal carbon prices and the logic behind them.

[13:50] The need for regular review: Internal carbon pricing is something that needs to be reviewed on a regular basis as the costs associated with emitting in some business locations is not going to remain the same. This can also be affected by national legislation, which can increase the financial risk of emitting.

Tiffany recommends reviewing your internal carbon pricing at least annually. They’re seeing an emerging trend within the environmental space where sustainability related impacts within a company are being sequestered into their wider financial operations.

The impacts of climate change are going to become more material to businesses in the very near future. As a result of this, it makes sense for businesses to assess their internal carbon price as part of their annual financial reviews. 

[16:30] What are the critical steps businesses should take to mitigate price volatility and ensure that they’re investing in high quality, impactful projects? Tiffany recommends the following steps:

1. Focus on decarbonising your business operations first and engaging with your suppliers to tackle scope 3 emissions as well. It’s more beneficial to both the business and environment for you to reduce emissions as much as possible, so you have a smaller residual footprint to offset.
2. Decide what kind of projects / carbon credits you want to spend money on, whether it’s offsetting or investing. Besides the climatic impact, there are many co-benefits of carbon projects to choose from, such as improved biodiversity, water supply, or workplace gender equality. Knowing what is valuable to you and your business will help in the selection of these projects.
3. Build strong relationships with developers directly where possible and buy credits directly, in advance. This also has the benefit of ensuring a supply of carbon credits into the future without the worry about how the market might change or become more volatile within the next couple of years.
4. If your business is operating at quite a significant scale, it would be wise to work with another company that’s focused on the voluntary carbon market, like AlliedOffsets. They can provide guidance and forecasting for the specific projects or sectors you’d like to buy from, reducing uncertainty on the future of the market.

[20:00] Have faith in the impact of the voluntary carbon market  – The voluntary carbon market has been through a turbulent period of time, and it’s alright to feel cautious about entering a space which has been unstable in the past.

The concerns about reputational risk associated with offsetting have greatly reduced in the last few years, and it’s set to reduce further as the voluntary and compliance markets merge and integrity improves.

However, if you decide that offsetting isn’t right for your business, there are still other tools that you can take from the voluntary carbon markets to help drive decarbonisation, such as internal carbon pricing.

If you’d like to learn more about AlliedOffsets, visit their website!

If you’d like any assistance with carbon standards, get in touch with Carbonology, they’d be happy to help!

We’d love to hear your views and comments about the ISO Show, here’s how:

• Share the ISO Show on Twitter or Linkedin
• Leave an honest review on iTunes or Soundcloud. Your ratings and reviews really help and we read each one.

Subscribe to keep up-to-date with our latest episodes:

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No business can operate with zero emissions, there’s only so much you can reduce before you need to look at offsetting the remainder to truly achieve Net Zero.

Carbon offsetting comes in many forms, but the ones people will be most familiar with include purchasing carbon credits for nature restoration projects and tree planting efforts.

Historically, the voluntary carbon market has been troubled by project developers who haven’t operated their carbon offsetting projects to the environmental and social standards expected by buyers. With the use of offsets on the rise, it’s clear that there is a need for transparency and standardisation within these voluntary markets.

In this episode Mel is joined by Tiffany Cheung, the Corporate Engagement Lead at AlliedOffsets, to explain what the voluntary carbon market is, how carbon credits work from purchase to retirement and what quality controls are in place to ensure they are reliable.

You’ll learn

• Who are AlliedOffsets?
• What is the voluntary carbon market?
• What are carbon credits, and how do they work?
• What quality controls are in place for carbon credits?
• How will the voluntary carbon market affect future regulatory requirements?
• What does it mean to retire a carbon credit?
• What services do AlliedOffsets offer?

Resources

• AlliedOffsets website
• AlliedOffsets LinkedIn
• Carbonology

In this episode, we talk about:

[00:30] Episode Summary – Tiffany Cheung joins Mel to discuss the voluntary carbon market, explaining the carbon credit lifecycle and what quality controls are in place to ensure they are reliable.

[01:40] Who are AlliedOffsets?: AlliedOffsets aggregates data from over 30 carbon registries and compliance schemes as well as off-registry transactions to present the most comprehensive dataset on carbon offsetting activity globally.

Their data has been featured in publications such as the Financial Times, Forbes, The Guardian and many more.

[03:20] How did Tiffany get involved in carbon markets?: Tiffany has been working with AlliedOffsets for over a year, and a lot of their role as Corporate Engagement Lead includes talking to a variety of stakeholders on the buying side of the carbon market, understanding what their motivations for being in the space are, what their strategies are going into the future and their wider decarbonisation process. Tiffany also looks at their transactional activity and how that has changed over time.

Prior to their position at Allied Offsets, Tiffany worked in a major environmental advisory and brokerage firm based in London. There they gained a knowledge of both voluntary carbon markets as well as renewable energy markets in that space, this in addition to learning more about the accompanying compliance trading and risk side of things.

[06:00] What is the carbon market?: Carbon markets describe markets where carbon is translated from a greenhouse gas into an asset, or a commodity that can be traded. These tend to represent actual tonnes of atmospheric carbon dioxide that have been sequestered somewhere else in the world through various projects.

Compliance carbon markets work differently from voluntary carbon markets. Compliance carbon markets provide regulated ways of pricing carbon, both in terms of reducing emissions and generally making polluters aware of the environmental impact of their emissions in a financial way. They may be associated with the voluntary carbon market, also known as the VCM, or they may be referred to as a kind of carbon tax.

[07:05] What’s the difference between a voluntary carbon market and a non-voluntary carbon market? If you are engaging in the voluntary carbon market, there is no legislative impetus for you to be involved in it. It’s mostly driven by a business’ own desire to offset emissions.

The offsetting of residual emissions is done through the purchase of carbon credits, which are representative of 1 tonne of CO2 equivalent removed from the atmosphere.

If you offset all of your remaining emissions, then you may be able to claim carbon neutrality for the year that the credits apply to.

The benefits of carbon credit-issuing projects aren’t always related to solely greenhouse gas removal, and depending on a businesses motivations, you can help to fund a wide range of beneficial projects such as clean water provision or improved cook stoves which improve air quality in domestic settings.

[09:25] What type of organisations are leading the way with carbon credit purchasing? – AlliedOffsets has unique access to the transaction history across 30 different global registries, enabling them to provide an up to date and wide ranging view on the voluntary carbon market.

There is a very strong relationship between how polluting a sector is and how well engaged it is with the voluntary carbon markets. So major players include energy producers, aviation, maritime, ground transportation and mining and materials.

There is also an increase in financial services, technology and telecommunications services entering the carbon market. Tiffany expects this trend to continue with increased data centre usage and artificial intelligence driving up energy consumption across these sectors.

[11:10] How does the voluntary carbon market operate?: When a company first decides they want to buy carbon credits, ideally they would engage with a well-established broker or intermediary who can source a variety of carbon credits.

It’s helpful for the broker to know what sort of carbon credits or projects a company is looking to invest in. There’s a lot of different options, including:

• Forestry
• Alternative land use
• Blue Carbon
• Engineered carbon dioxide removal

The company will let the broker know how many tonnes of carbon credits they’d like to buy, attributed to a certain period of time or activity based on their quantification and existing carbon reporting.

Market prices will range quite significantly based off of what technology type or methodology you’re going with, but most carbon credits are currently sub $15.

Once agreed, your intermediary will secure and retire the credits for you, from the registry and project developer.

Retiring a carbon credit means they are taken entirely off the market and they’re considered to be “spent” or used. Nobody else can use those as an investment or offset at that point, and the purchasing company can consider their carbon footprint to have been neutralised for the specified period.

[12:00] What quality controls are in place for the voluntary carbon market? Whilethere isn’t a master registry, there are several registries across the world that generally dominate the market. They vary in terms of the methodologies that they may or may not specialise in, as well as with geographies. The biggest ones that you’re most likely to see in the market are known as VCS, GS, ACR, and CAR. These account for about 80% of the total market volume by retirement and issuance.

The way that these registries work is that they perform a bookkeeping function within the space. Projects will register their sequestered tonnes of CO2 removed with these registries, who will then check to see if these projects have complied with their methodology, which would have been set by a Standards Body.

Once approved, those project developers can sell their credits as a commodity. When a business wants to buy credits, the type of projects they want to engage with will dictate the sort of registries they’ll be engaging with.

There are also checks in place set by the registries to ensure that project developers use third parties to further validate their project activities.

[16:45] What are the methodologies used in the voluntary carbon market? A methodology refers to the way in which a specific project should be undertaken in order to ensure that the pace of carbon sequestration and storage is consistent throughout the project’s life.

Registries are ultimately responsible for issuing the appropriate methodology, and the project developers need to be able to evidence compliance to that methodology.

The process for a project to be registered is quite complicated, and it generally takes 2 – 3 years from concept to being in a position to issue credits.

There is also a requirement to have their work validated by a Verification and Validation Body (VVB). These are third party auditors who check the evidence provided by project developers to ensure they comply with the necessary methodology. This may include the VVBs undertaking a site visit.

[19:30] Will regulatory requirements be introduced within the voluntary carbon market?  – Tiffany states that there is definitely a demand for regulatory requirements in the space. There a two key drivers for this:

The need for integrity among buyers – There are many sectors where engaging in a more unregulated space can be risky. Sectors such as the legal and financial sectors need a certain level of oversight to ensure they are making sound investments.

Convergence of compliance and voluntary markets – This is a change that’s been happening over the past few years. This is being driven by governments taking part in the voluntary carbon market space and realising that they can yield returns for the country. Additionally, when they’re spending public funds, there needs to be a certain level of assurance in the projects they’re engaging with.

There is also a growing appetite for businesses engaging in this market to ensure that they are doing the best thing possible ahead of the curve. There’s been a lot of negative press around greenwashing projects, leading to potentially tarnished reputations, to the need for proper checks and regulation is becoming a necessity. 

[22:45] What does it mean for a carbon credit to be retired? – The point at which a carbon credit is retired is when it has been taken totally out of circulation for the market. That means that no other broker, intermediary or end buyer would be able to use that credit in any kind of capacity.

It’s like having the receipt to say this person has purchased this product, it belongs to them now and nobody else can use it.

[24:30] How are stakeholders using the data provided by AlliedOffsets? – AlliedOffsets has a very wide data set, with an equally wide range of stakeholders.

Some particularly interesting use cases include:

Benchmarking against the competition – Corporate buyers use their data to compare how their activity measures up to competitors or peers within their sector due to AlliedOffsets long view of historic activity. It highlights what projects are being favoured by their competitors and what kind of price points they should be looking at as well.

Project developer research – Another common use case is that project developers will want to see who is active in the market and who they should be targeting for funding. AlliedOffsets can see specific buyer activity broken down by region as well as methodology, which means project developers have a really good chance of being able to engage with buyers who are entering the space and might not have established those direct procurement relationships.

Government consultation – Markets can be a huge source of income from the private sector into the public purse. For example, you might have a voluntary carbon market scheme that’s associated with a compliance scheme, which can mean tax benefits for complying businesses alongside socio-environmental benefits for the country.

If you’d like to learn more about AlliedOffsets, visit their website or reach out to Tiffany for more about buyer activity in the VCM!

If you’d like any assistance with carbon standards, get in touch with Carbonology, they’d be happy to help!

We’d love to hear your views and comments about the ISO Show, here’s how:

• Share the ISO Show on Twitter or Linkedin
• Leave an honest review on iTunes or Soundcloud. Your ratings and reviews really help and we read each one.

Subscribe to keep up-to-date with our latest episodes:

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Businesses looking to tackle their environmental impact will need to look at how they can reduce their carbon emissions and offset any remaining emissions to ensure that they reach Net Zero.

One of the most common ways businesses offset their emissions is through the purchasing of carbon credits that typically go towards planting trees or re-wilding.

However, there are a number of new emerging trends following on from the current commodification of nature, resulting in an attitude shift from businesses who are looking to get a lot more involved in the offsetting process.

We invited Luke Baldwin, Co-founder and CEO of Nature Broking, back onto the show to explain the latest trends in the carbon market.  

You’ll learn

• What are the latest trends in the carbon market?
• The importance of high integrity within carbon offsetting
• Looking for impactful solutions
• Why education around carbon offsetting is key for long-term sustainability commitment
• How buying carbon credits now can lead to significant savings

Resources

• Nature Broking
• Isologyhub

In this episode, we talk about:

[00:30] Join the isologyhub – To get access to a suite of ISO related tools, training and templates. Simply head on over to isologyhub.com to either sign-up or book a demo.

[02:05] Episode summary: Today Mel is joined by guest Luke Baldwin, Co-founder and CEO of Nature Broking, to discuss emerging trends in the carbon market that help businesses tackle their carbon offsetting.  

[02:50] What are the key trends in the Carbon Market  – As of 2024, Luke states the leading trends as:

• High Integrity
• Impactful solutions
• Education
• Purchase carbon credits now and save later

[04:10] High Integrity – There’s now a lot of carbon credits available and due to the nature of the unregulated carbon markets, it’s led to an increase in bad actors generating revenue in a bad way.

Once example of this is Kariba, a project in Zimbabwe that aimed to tackle deforestation, which was recently exposed in the Guardian and The New Yorker for having incorrect calculations. Credits purchased towards that programme were then called into questions and any associated companies were accused of greenwashing.

To avoid this, businesses are now putting a greater focus on high integrity solutions, which involves considerations such as:

• Are the credits durable? Will the carbon be stored long term?
• Are their significant CO2 benefits?
• Are the credits contributing anything besides just removing carbon? i.e. regenerative agriculture or woodland plantation

[06:20] Impactful Solutions: The carbon markets offers a lot of fantastic solutions and businesses are moving away from the quick commodification of those solutions, and are instead looking to really understand the impact of how they chose to offset their emissions.

It’s becoming more of a question of buying carbon credits that align with your values, whether this be social values or sustainability values.

They’re looking to invest in projects that will have a tangible outcome. Which is exactly what Nature Broking sets out to assist businesses with by tailoring bespoke solutions that adhere to their specific values.

[08:10] Education  – The need for more education around the carbon markets is crucial.

Luke remembers the quote “you can’t love what you don’t know”, which applies as how can a business truly invest in something that they don’t fully understand.

Sustainability is a mindset, and a cultural shift towards more sustainable practices starts with an education.

Carbonology uses an ISO framework, but also provide an education around the carbon reduction plan provided to inspire a mindset shift change towards sustainability.

[09:05] Blackmores experience – Blackmores have been implementing environmental and energy Standards for over 18 years, but it’s only been in recent years that we’ve seen a mindset shift in leadership towards sustainability.

While people may be aware of Standards such as ISO 14001 or B Corp, but may not be aware of other governance frameworks that can help businesses to manage their carbon footprint and carbon neutrality.

[10:20] Join the isologyhub – Don’t miss out on a suite of over 200+ ISO tools, templates and training, sign-up to become a member of the isologyhub  

[12:25] How can you make significant savings when purchasing carbon credits? – A lot of carbon solutions currently are very cost effective, in particualr forestry credits and carbon removal credits.

Some of the more technological ones such as direct air capture or bioenergy and carbon capture and storage can be more expensive now because the technology utilised is still so innovative and in it’s infancy. However, that will change in time.

 If you’re looking at building a carbon portfolio for your net zero journey, for example, say are going through a science based targets initiative and you’ve decided that you cannot avoid the 10% of remaining emissions your net zero journey and you need to buy carbon removals – you’re much better purchasing carbon removals now than in the future.

This is because there will be a supply shortage in future, especially when we see more enforced regulations come into play between 2030 and 2035. This will mean that the price of those carbon credits will rise significantly.

What may cost £20-£30 per tonne for carbon removal now may go up to anywhere between £100 – £150 per tonne!

So it’s worth investing in your carbon portfolio now, especially in the case of tree planting as those tress are going to take a while to grow and actually start storing carbon.

If you finance projects now, you will have already made an amazing impact from the start, and will potentially save yourself a lot of trouble and money in future by planning ahead.   

If You’d like to learn more about Nature Broking and their solutions, check out their website.

If you’d like to book a demo for the isologyhub, simply contact us and we’d be happy to give you a tour.

We’d love to hear your views and comments about the ISO Show, here’s how:

• Share the ISO Show on Twitter or Linkedin
• Leave an honest review on iTunes or Soundcloud. Your ratings and reviews really help and we read each one.

Subscribe to keep up-to-date with our latest episodes:

Stitcher | Spotify | YouTube | iTunes | Soundcloud | Mailing List