Carbon Credits: new disclosure item proposed in the GRI Standards.

Today is Wednesday, February 28, 2024.

GRI has its Climate Change and Energy Topic Standards being reviewed in a public audience that started last November 2023 and goes until tomorrow, 29 February 2024. More specifically, certain climate change-related disclosures focusing on Energy (GRI 302), Emissions (GRI 305) and Economic Performance (Disclosure 201-2: Financial implications and other risks and opportunities due to climate change).

The new exposure drafts emphasize the following key actions that organizations must undertake and report:

• reducing GHG emissions;

• reducing energy consumption;

• the social aspect of climate change; and

• just transition perspective.

"The project is not limited to reviewing the current contents of existing GRI climate change-related disclosures. It also incorporates new topics such as transition plan, adaptation plan, GHG emissions reduction targets, just transition and GHG removals" and - something specific that we would like to bring to the attention of our readers - carbon credits.

Yes, a new disclosure on carbon credits is being proposed.

"The aim of this disclosure is to increase transparency regarding the use of carbon credits. Organizations shall disclose the total amount of carbon credits cancelled and provide information on the projects they purchase the carbon credits from. Organizations shall report details on the adherence to quality criteria and on the purpose of the carbon credit cancellation. As carbon credits projects may result in positive and negative impacts, organisations are expected to report on the evaluation and continuous monitoring of such impacts".

The organization also should report if an internal carbon pricing scheme is in place, a description of it, including which of the organization’s GHG emissions sources are covered by the scheme and the prices used per metric ton of CO2.

Disclosure CC-6 Carbon Credits, about which there is a whole chapter, specifies that for each project for which carbon credits have been canceled, the organization must report:

1. Project name and project ID;
   

2. Project type, i.e., whether a reduction (such as renewable energy projects, to replace planned fossil fuel power plants or improve cookstoves’ energy efficiency, and REDD+ projects) or removal project, for example, afforestation, reforestation, soil carbon sequestration, direct air carbon capture and storage (DACS), and bioenergy with carbon capture and storage (BECCS);
   

3. Cancellation serial number, cancellation date and vintage;

Eight quality criteria have to be explained.

The Claims Code of Practice of the Voluntary Carbon Market Integrity Initiative (VCMI) is mentioned when referring to credit vintage and the verification process, besides being listed in the bibliography.

The final Standards are expected to be approved in Q4 2024.

Click here for GRI's portal "Project for Climate Change Standards".

And at the image below for GRI Topic Standard Project for Climate Change – Climate Change Exposure draft.

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www.carboncreditmarkets.com

Chapter Disclosure CC-6 Carbon credits. GRI Topic Standard Project for Climate Change – Climate Change Exposure draft.