The UK Government published on 15 November 2024 the Carbon and Nature Market Integrity Principles. The six Principles are designed to enhance the integrity and use of voluntary carbon and nature credits by organisations. The Principles were accompanied by notice of a public consultation to take place in early 2025 on endorsing particular standards for assurance of voluntary credits and evaluating green claims, and the use of those standards as benchmarks for future guidance, policymaking and potentially regulation in this area. The consultation will also consider how the Principles should be put into practice to free up green investment.  

The Six Principles

With developing environmental and nature protection imperatives driving changes in corporate and consumer behaviour, markets are developing rapidly. Concerns have been raised about the quality and integrity of some voluntary carbon credits available in the market and allegations of ‘greenwashing’. This is thought to be holding back the potential of the voluntary markets as a complementary tool to finance projects with climate change and biodiversity benefits. The UK Government has responded with a set of principles to guide conduct. The adoption of the Principles responds to calls on the Government to:

• identify key elements of good practice, and provide confidence to organisations on the use of credits and enhance trust amongst consumers, investors, and civil society;
• respond to calls for policy clarity and better access to markets for developing countries, and in the UK, for farmers and land managers;
• enable stakeholders and regulators to act where good practice is not adhered to in the context of existing and future regulatory codes; and
• support coherence across voluntary carbon and nature markets whilst respecting their differences.

The Principles are non-binding and set out how the Government plans to evaluate high-integrity credits and how it believes they can be used responsibly and appropriately by buyers as part of meeting their climate or environment goals.

Carbon and Nature Market Integrity Principles

1. Use credits in addition to ambitious actions within value chains: Credits should complement, not replace, ambitious actions to reduce emissions and environmental impacts within value chains. The aim would be to minimise impacts first (using “every reasonable effort”), including within participant value chains, signalling the need to monitor Scope 3 value chain impacts.
2. Use high integrity credits: Credits should meet include independent validation and verification, and be clear about and support mitigation of associated social and environmental harms. This includes mitigating leakage risk and double counting, identifying environmental, gender and social co-benefits and going beyond legal compliance.
3. Measure and disclose the planned use of credits as part of sustainability reporting: This would include information on the underlying project type, certifying standard, and how the planned use of credits relates to wider environmental objectives or targets. 
4. Plan ahead: Set and disclose long-term and interim targets and strategies to achieve them, including science-aligned targets to achieve net zero by 2050. As part of the carbon purchase strategy, setting quantified and independently verified science-aligned target across Scope 1,2 and 3 emissions is encouraged.
5. Make accurate green claims using appropriate terminology: When making a claim based on credits, the claim should accurately communicate the organisation or product's overall environmental impact, using appropriate and accurate terminology. There may be a need for further guidance to clarify terms such as ‘carbon neutral’ or evaluating green claims.
6. Co-operate with others to support the growth of high integrity markets: Credit buyers should collaborate with other market actors to support standardisation, information sharing, equitable market access, reduced transaction costs, transparency and interoperability between carbon and nature registries.

The 2025 consultation

The consultation will be released in early 2025 and is expected to focus on:

1. Standards for High-Integrity Markets, including ICVCM's Core Carbon Principles and Assessment Framework and VCMI's Claims Code of Practice, and integrating them into official guidance, policy, and potentially regulation.
2. Governance models, regulatory approaches and supporting infrastructure to embed those high-integrity practices.
3. Conditions for the limited use of high-integrity carbon credits to offset a proportion of Scope 3 carbon emissions, referencing VCMI's beta Scope 3 claim.
4. Elaborating on how the UK Government Carbon and Nature Market Integrity Principles can be put into practice to reinforce green investment policies across the UK.

What Happens Next

The UK’s emerging framework of ESG-related requirements is trying to keep pace with the EU and various global initiatives. Whether the Carbon and Nature Market Integrity Principles will support the architecture of a robust UK system remains to be seen. We look forward to scrutinising the consultation when it is released early in 2025.