The second edition of the GenZero Climate Summit — held as a partner event to Temasek’s Ecosperity Week 2024 — was most well-attended on its second day. The draw? An afternoon of panels featuring carbon market players Verra and Gold Standard, and representatives from the Integrity Council for the Voluntary Carbon Market (ICVCM) and the Voluntary Carbon Markets Integrity Initiative (VCMI).
Industry leaders who arrived during Gold Standard CEO Margaret Kim’s opening keynote on April 16 were forced to stand as seats were completely filled.
Kim veered on the defensive in her 11-minute speech, saying the “entire ecosystem has to change, from supply to demand”.
She adds: “We love debating over things. We love clickbait titles. But are we doing this to put positive pressure on actors to act with high integrity? Or are we doing it because it’s just human nature to debate?”
Last year, a slew of media exposés accused carbon credit players like Verra, Gold Standard and South Pole of overstating the actual environmental impact of their products.
After months of dismissing the claims, Verra’s founding CEO stepped down in June 2023. South Pole’s chief followed suit in November that same year.
In contrast, Kim has held on to her five-year-old role. She says: “We need to create a community where we are observing, watching [and] supporting that progressive journey; I cannot stress this enough.”
Image rehab
If the inaugural GenZero Climate Summit last June was a reckoning for the embattled carbon markets, this year’s iteration was a precious chance to rehabilitate their image.
See also: At COP28, carbon market players attempt to recoup trust after global scandal
Among the panels was one unabashedly titled: “Carbon Markets 2.0: Will 2024 be a Year of Redemption?”
Except for Robin Rix, Verra’s chief legal policy and markets officer, the headliners were placed shoulder-to-shoulder in a 40-minute panel immediately following Kim’s keynote.
As the first speaker to be called by GenZero’s moderator, Peter Bakker delivered the first zinger just two minutes in.
“We need to think about carbon the way we think about money,” says the president of the World Business Council for Sustainable Development (WBCSD). The rehabilitation had begun.
Mark Kenber, executive director of the VCMI, says transparency is important. The non-profit organisation focuses on the claims made by individuals and businesses who buy carbon credits, while the ICVCM focuses on the sellers in the voluntary carbon markets.
The UK-based Kenber, formerly VCMI’s co-executive director for external affairs, acknowledged that “there’s been a lot of turmoil in the carbon markets over the last year because of scrutiny of projects”.
See also: A decade on, Temasek's Ecosperity Week tackles nature, blended finance and carbon markets
He adds: “We welcome that; we need that scrutiny if it makes us all perform better. It enables people to see where things are failing and where things are succeeding.”
Transparency works both ways, he adds. “It pulls out the bad example that allows us to review and that’s what we’ve seen over the last couple of years [at] organisations like mine; Chris, I’m sure if you’re talking about the Integrity Council [for the Voluntary Carbon Market], raising the bar to have great policy and transparency is at the heart of what we both do.”
After listing the merits of transparency, however, Kenber and ICVCM board member Chris Leeds evaded a question about the Science Based Targets initiative’s (SBTi) controversial move earlier in April to approve carbon credits for Scope 3 emissions.
The SBTi, formed after the Paris Agreement was signed in 2015, is considered the most stringent criterion. Companies with SBTi-validated targets are said to be aligned to limit global warming to 1.5°C above pre-industrial levels. Until April, the SBTi had not allowed companies to use carbon credits to offset their emissions.
Instead, WBCSD’s Bakker took the question by repeating his refrain: “We need to manage carbon the way we manage money.”
However, the deflections towards the media throughout the afternoon were more concerning. “The press, of course, don’t publish stories about ‘This was a great project’,” says VCMI’s Kenber, “because it’s not as newsworthy.”
GenZero CEO Frederick Teo mentioned the press four times in his closing address on April 16. Under a slide emblazoned with the words “Ensuring governance is key, but who has the right to govern?”, Teo drew an analogy from the Roman poet Juvenal with a phrase repeated in the 2009 superhero film Watchmen. “Who watches the watchmen?” Teo mused.
The media plays a “very important and constructive role”, he adds. “[It] keeps us all honest, points out issues, helps us advance our thinking; but then do we just listen to everything the media tells us? Probably not.”
According to Teo, a broad push for rules may alienate investors in the fragile carbon markets. “At the end of the day, we are grappling with not a lack of rules. We are grappling with who has the right to ultimately decide that this is the right way to do things.”
Ready for scrutiny?
Readers come to financial publications like The Edge Singapore for the latest market-moving information, investing ideas and updates on their portfolio holdings.
This is a strong pull factor — a significant advantage for papers like ours — compared to those covering general news or current affairs.
Experienced investors know the level of detail company executives are expected to provide at quarterly results briefings. Analysts and media quiz these leaders about every financial metric — right down to the dollar — especially for larger, reputable companies. Sceptical shareholders may even follow up with their questions at annual general meetings.
Bakker’s refrain, which bookended the panel, comes to mind. If carbon market players wish for the world to treat carbon the way they do money, they should be prepared to face the same level of scrutiny.
Some degree of bungling may be chalked up to teething pains, but pushing for progress unencumbered by rules or frameworks widens a worrying gap between the two.
In that case, filling the vacuum will undoubtedly be a series of cynical articles, with the media waiting for the players to slip up again.
Back on the panel, Bakker added an important qualifier about the SBTi after repeating his catchphrase: “Think how regulated the financial market is [and] think how unregulated the non-financial, in this case, the carbon market is. Organisations, basically NGOs, can come up with statements that disrupt markets because there is no standard; at least, not generally accepted by everyone.”
Until the carbon markets stabilise, perhaps with a clear business case for carbon credits, its players must choose between trial by regulation or trial in print.
One is less damaging than the other.
Photos: GenZero
Learn more about the carbon markets:
- High-quality carbon credits can help attract private capital to fund clean energy tech: GenZero, IEA report
- Classify voluntary carbon credits as intangible property, say Temasek’s GenZero, Allen & Gledhill
- At COP28, carbon market players attempt to recoup trust after global scandal
- Mediation could better resolve disputes over voluntary carbon markets
- Voluntary carbon market body publishes rulebook for credible use of carbon credits
- Singapore-backed carbon credits data platform CAD Trust launches 20-member user forum
- Verra CEO resigns after 15 years, president appointed in February set to take over
- Are carbon credits credible?
- IETA responds to The Guardian's claims that carbon offsets are 'worthless'
