VCMI Claims Code of Practice – Important Progress but the Difficult Stuff Still Lies Ahead

Blog post
5 min read
MSCI Carbon Markets
June 29, 2023
Key findings
  • The Voluntary Carbon Market Integrity Initiative’s new Claims Code of Practice could help companies make high-integrity claims related to their voluntary use of carbon credits.
  • Four steps are outlined to making a claim and include three categories — platinum, gold and silver — based on the percentage coverage of residual emissions with high-quality carbon credits.
  • The guidance clarifies some aspects of how much of a firm’s emissions need to be covered for different claims, though the difficult and more-controversial work still lies ahead.
This blog post originally appeared on trove-research.com. MSCI acquired Trove Research — now known as MSCI Carbon Markets — in November 2023. The Voluntary Carbon Market Integrity Initiative (VCMI) published its finalized Claims Code of Practice yesterday to great fanfare. This document follows from the Provisional Code published in June 2022. The purpose of the Code is to help companies credibly make voluntary use of carbon credits within their emission-reduction targets. As in the Provisional Code, there will be four steps to making a VCMI claim, but there is some language variation in the finalized version. The four steps are now as follows:
  1. Meet the foundational criteria — including transparent reporting, set near-term science-based targets, demonstrate the company is "on track" and supportive policies toward the Paris Agreement.
  2. Identify claim(s) to make when using carbon credits:
    • Silver — coverage of 20-60% of residual emissions with high-quality carbon credits.
    • Gold — coverage of 60-100% of residual emissions with high-quality carbon credits.
    • Platinum — coverage of more than 100% of residual emissions with high-quality carbon credits.
  3. Purchase the highest-possible quality credits aligned with the Core Carbon Principles (CCPs) of the Integrity Council on the Voluntary Carbon Market (ICVCM).
  4. Report transparently and conduct independent validation on the use of credits aligned with the VCMI Monitoring Reporting and Assurance (MRA) Framework.
What does this mean for corporate climate commitments and the Voluntary Carbon Market?
While this guidance has taken a year to produce since the initial draft and it clarifies some aspects of how much of a firm's emissions need to be covered for different claims, it still does not address some important issues — specifically how companies that cannot comply with foundation criteria (i.e., committing to the Science Based Targets initiative (SBTi) net-zero targets by 2050) should use carbon credits. This is critical, as the vast majority of carbon credits used by corporations today are used by firms that do not meet these criteria. Trove Research's analysis of over 470 companies using carbon credits shows that:
  • 3.8% of firms would meet VCMI silver or above
  • 2.7% of firms would meet VCMI gold or above
  • 2.3% of firms would meet VCMI platinum
Firms using carbon credits would fail to meet the current VCMI criteria on several fronts:
  • Only 25% of firms using carbon credits have made a net zero commitment that meets VCMI's requirements (interestingly, an additional 15% have a net zero target where the net zero definition and/or framework used is not currently sufficient for VCMI)
  • Only 66% of firms using carbon credits disclose the exact credits they are using
  • Only 38% of firms are on track to meet near-term emissions-reduction targets
In VCMI lexicon, this is the "on ramp" to encourage firms to start to engage in the voluntary carbon market, even if they are unable to commit to and achieve SBTi targets. The VCMI has committed to add more details on these additional claim tiers in November 2023 along with the VCMI MRA framework. Yesterday's Claims Code also punts another important issue into the future — decisions on the emissions scope companies should claim to "offset." This is a crucial issue as the SBTi requires scope 3 emissions to be included in net-zero commitments. The provisional code allowed companies making bronze claims to meet 50% of their Scope 3 interim emissions-reduction targets using carbon credits. The new lowest silver tier requires the purchase and retirement of high-quality credits in an amount equal to or greater than 20%, and less than 60%, of a company's residual emissions once it has demonstrated progress toward its near-term targets. But the scope of emissions coverage to be included in a VCMI claim is left for future consideration. These deliberations will be the most controversial. They will pit the purists against the pragmatists. The purists will still want to see high levels of ambition, which may be unachievable for many firms, while the pragmatists will want to give confidence to companies that are starting their decarbonization journey in hard-to-abate sectors. We expect the VCMI will also settle on a language that is simple and intuitive. The finalized Claims Code now uses silver, gold and platinum. This change may be confusing for market stakeholders who are not familiar with the tiered system of claims. It is possible that some stakeholders might assume gold is the highest tier, without realizing that platinum is part of the scale. In summary, yesterday's VCMI Claims Code of Practice helps move the debate forward, but the difficult and more-controversial work still lies ahead.
MSCI Carbon Markets
MSCI Carbon Markets

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