1. Home
  2. Thought Leadership
  3. Voluntary carbon markets:…

Voluntary carbon markets: is the nuance lost in the noise? – Federated Hermes Limited

The integrity of some of the world’s voluntary carbon market (VCM) schemes is a hot-button issue. However, Federated Hermes Limited believe it’s important to understand some of the differences in standards around the world – as well as the progress being made towards tightening them.

Posted on Feb 20, 2024

Only members with restricted access (ie. academics, asset owners, government and regulatory, independent advisers/trustees and sponsoring employers) can view this article. Please login or join to view.

...
... Fast reading:
  • Recent press about global VCM has, rightly, raised concerns about the integrity of some of the schemes available for investors looking to offset their carbon footprint.
  • Not all VCMs are built the same, however. VCMs endorsed by the UK government use a methodology based on scientific consensus and are free from methodological subjectivities and uncertainties, which is in contrast with the international schemes currently attracting criticism.
  • This means commonly cited concerns around VCMs overstatement of impact in other parts of the world are not relevant or applicable to the UK context.
  • The UK Nature Impact team is aware of this nuance. Indeed, the creation of the strategy and its UK-only investment universe was motivated by Federated Hermes Limited's belief in the integrity of the UK methodological VCM framework.
  • Federated Hermes Limited continue to monitor the situation and welcome progress on tightening non-UK VCM standards.

To the extent that anything on this website constitutes a financial promotion it is exempt from the general prohibition in S21 of FSMA on the basis that the site is only intended for investment professionals as such term is defined in S19 of the Financial Promotions Order. Please note that Pensions for Purpose does not provide consultancy services, advice or personal recommendations on any of the investment opportunities mentioned on the platform. We curate content written by members and do not endorse any underlying funds.

Learn more here