A Natural Approach to Net Zero

Abstract

A widely accepted view among leading sustainability standard setters and guidance providers holds that to achieve Net Zero, companies must first prioritize reducing the greenhouse gases (GHG) in their value chains before compensating for any unabated emissions that remain through the use of carbon credit offsets. This chapter argues that this view, the received Net Zero logic, suffers from conceptual failings that threaten to divert private sector resources from one of the most underfunded but critically important areas for climate action, namely Nature Based Solutions (NBS). The chapter provides examples of how the received Net Zero logic has disincentivized the purchase of carbon linked to the protection of natural ecosystems. In response, the chapter argues that recent innovations in the carbon markets linked to NBS credits, particularly the use of a jurisdictional rather than a project-based approach, offer an improved way to incorporate carbon credits into a credible corporate Net Zero strategy. In addition, the chapter explores how structuring NBS credits through the lens of “contributions” to supply-country emissions reductions efforts, rather than “offsets,” may offer a way to avoid double-counting and misleading claims. These innovations help ensure greater “demand side” and “supply side” integrity as well as improve the accuracy and integrity of the global accounting framework for Net Zero. The paper concludes by calling for increased investment into NBS credits to bring greater scale, integrity, and impact to the voluntary carbon market.