Navigating Carbon Markets

Monitoring and reporting of Scope 3 emissions 🌎 Scope 3 emissions represent the largest share of an organization's carbon footprint, encompassing indirect emissions across the value chain. A structured approach to measurement, commitment, transformation, and disclosure ensures comprehensive reporting and alignment with global sustainability standards. Organizations must integrate Scope 3 emissions into their reporting frameworks to enhance transparency and drive meaningful reductions. Accurate measurement is the first step in managing Scope 3 emissions. Methodologies such as the Greenhouse Gas (GHG) Protocol and ISO 14064 provide guidance on calculating emissions across relevant categories. Reporting standards, including GRI, CDP, and IFRS S2, establish principles for disclosure, ensuring that organizations quantify emissions in a way that is comparable and actionable. Setting a clear baseline allows companies to identify high-impact areas and prioritize reduction efforts. Commitment to science-based targets supports long-term emissions reductions. The Science Based Targets initiative (SBTi) offers frameworks for setting ambitious yet achievable decarbonization goals. Alignment with standards such as CSRD ESRS E1, ISSB, and SASB ensures that Scope 3 targets are integrated into broader corporate sustainability strategies. Effective emissions reduction requires collaboration across the value chain, emphasizing supplier engagement and business model innovation. Transforming business operations is essential to reducing Scope 3 emissions. Companies must optimize supply chains, shift toward low-carbon materials, and explore alternative logistics solutions. Investments in circular economy strategies, renewable energy adoption, and efficiency improvements contribute to emission reductions. Partnerships with suppliers and industry stakeholders strengthen impact and accelerate progress toward decarbonization. Scope 3 emissions are categorized into upstream and downstream activities, capturing emissions beyond direct control. Upstream activities include purchased goods and services, capital goods, fuel and energy-related activities, transportation, business travel, and employee commuting. Downstream activities involve emissions from transportation and distribution, product processing, end-of-life treatment, leased assets, and investments. Each category requires tailored approaches to measurement and mitigation. Scope 1, 2, and 3 emissions interact within a company’s sustainability strategy. Scope 1 emissions originate from direct sources such as company facilities and vehicles. Scope 2 emissions result from purchased electricity, steam, heating, and cooling. Scope 3 emissions extend beyond organizational boundaries and often require coordinated efforts with external partners to influence change across the value chain. Source: Deloitte #sustainability #sustainable #business #esg #climatechange #scope3 #emissions

When I speak to buyers of carbon credits, here’s what’s in greatest demand: #trust They are crying out for it. Given previous scandals, they’re very aware how easily they could be caught holding poor-quality credits. We as a sector have let them down. But I believe the #FirstPrinciple answer is simple - albeit an oxymoron - to trust carbon credits, build systems that don’t rely on trusting us. Generally, carbon project developers are great people trying to do amazing things. By and large, we are not bad actors. But we shouldn’t be trusted. We have an inherent conflict of interest in the returns of the project to our investors, teams and partners that weighs us down constantly. It's not easy carrying this weight - the temptation to believe what we want to hear or turn a blind eye is strong. But a trustless goal isn’t aspirational - it’s already happening and why carbon is now clearly a #Kshaped market. Those performing well, like ATEC Global, have robust & independent baseline science combined with project technology such as 100% IoT that means you don’t need to trust us in order to trust our carbon credits. But if as a sector we keep the bar low, allowing developer-controlled assumptions, sampling and conflicts of interest, we will set ourselves up for another market cycle crisis. So let’s build a complete sector that doesn’t rely on trusting us. Then our buyers will finally be able to trust our carbon credits - and an exciting future awaits.

As businesses face increasing pressure to address climate change, eg the EU’s Carbon Border adjustment mechanism coming into force very shortly, AI and blockchain are emerging as key technologies in the drive towards sustainability. These innovations go beyond simple compliance—they offer new ways to promote transparency, accountability, and resilience. One example of this shift is how companies like Changeblock are reshaping the carbon credit market. Through the use of AI and blockchain, they’ve created a platform where carbon credits can be traded with greater confidence and reliability. This helps to solve long-standing issues of credibility and trust, turning carbon credits into a valuable tool for sustainability. Moreover, Changeblock’s Systems Monitoring Technology (SMT) integrates AI, IoT, and blockchain to provide real-time insights into sustainability projects across the globe—from biochar projects in Zambia to clean water efforts in Kenya. This enables businesses to meet environmental standards with precision and speed, ensuring that sustainability becomes an integral part of day-to-day operations. For businesses, the challenge is no longer about whether to embrace AI and blockchain, but how to leverage them to build a future where transparency and trust underpin success. The companies that adapt now will be those that thrive in the sustainable economy of tomorrow. For more information: https://lnkd.in/dAGaMZu3 #Sustainability #AI #Blockchain #BusinessLeadership #CarbonCredits #FutureGrowth

In a global economy, emissions don’t stop at borders – they move with the goods we trade. Almost every major economy is both an exporter and an importer of emissions. Around a quarter of global emissions are embedded in traded goods, and the G20 accounts for over 80% of these flows. This week at COP30 Brazil, the Climate Club released "Industry on the Road to 2050". My contribution with my colleagues Richard Baron, Samuel Leré and Matthew L. focuses on these “embedded emissions” – one of the largest blind spots in global climate governance. If we want to cut global emissions effectively, we need ways to reflect the carbon that moves through global value chains. It is also a politically sensitive area: decisions on accounting and responsibility can trigger concern about competitiveness or fairness. All the more reason to avoid fragmented responses and work towards cooperative approaches. Our paper highlights a political entry point: a cooperative system – bilateral or plurilateral – grounded in common data and shared monitoring, made possible by technical alignment. Some data already exists, but more work is needed to refine it. The European Climate Foundation will play its part by publishing a tracker at the end of 2026. But measurement alone will not deliver change. We also need practical cooperation and political will. This could help major economies – including the EU, China, India and Brazil – work together on standards for near-zero industrial materials, and align public procurement and industrial policies so they reward cleaner production rather than penalise development. The details are complex. What looks like slow progress from the outside often reflects difficult work on definitions, baselines and compatibility. Yet a larger picture is emerging: cooperation on embedded emissions can bridge industrial competitiveness, climate ambition and a fairer trading system. In practical terms, our paper outlines several steps: – harmonising core accounting principles so that data can be trusted and compared; – a voluntary coalition of countries must regularly publish their imported emissions and set reduction targets – developing shared benchmarks for low-emissions materials; – using public and private procurement to create real markets for clean industrial products; – ensuring emerging economies have the support needed to participate fully. You can read the full report here: https://lnkd.in/ecyjxdh9 Many thanks to the Climate Club team for their leadership, and to all those building the spaces where this cooperation can take shape. On the road to Belém and beyond, trade policy must now become core to the decarbonisation effort – and support the essential task of phasing out fossil fuels.

99% of professionals can explain Scope 1, Scope 2, and Scope 3 emissions in theory. But far fewer can confidently calculate them❗🤷♂️ That’s where many sustainability and ESG initiatives get stuck. Understanding the formulas behind GHG accounting is essential if you want carbon footprint results that are accurate, auditable, and decision-useful. The GHG Protocol groups emissions into three categories: • Scope 1 – Direct emissions from sources owned or controlled by the organization (fuel combustion, company vehicles, onsite processes) • Scope 2 – Indirect emissions from purchased electricity, heating, steam, or cooling • Scope 3 – All other indirect emissions across the value chain, often representing the largest share of an organization’s footprint At the core, the calculation follows a simple principle: Emissions = Activity Data × Emission Factor × Global Warming Potential (where applicable) Key inputs include: ✓ Activity Data (fuel used, electricity consumed, distance travelled, waste generated, etc.) ✓ Emission Factors (GHG emitted per unit of activity) ✓ Global Warming Potential (used to convert gases into CO₂e) A few practical reminders: • Good carbon accounting starts with good activity data. • Always use the most recent and credible emission factors available. • Document assumptions and data sources. • Report emissions in CO₂e for consistency. • For Scope 2, understand the difference between location-based and market-based reporting. • For Scope 3, engage suppliers early because data availability is often the biggest challenge. A strong carbon footprint is not built by software alone. It is built by understanding the logic behind the calculations, selecting the right data, and applying internationally recognized methodologies consistently. Organizations that master these fundamentals are better positioned to identify reduction opportunities, set credible targets, and meet stakeholder expectations. For practical sustainability and ESG, Carbon footprint, and LCA masterclass courses: visit: 365sustainability.com #Sustainability #ESG #CarbonFootprint #GHGProtocol #Scope1 #Scope2 #Scope3 #ClimateAction #NetZero #Decarbonization #LifeCycleAssessment #LCA #CarbonAccounting #SustainabilityReporting

A new study assessed carbon crediting mechanisms, addressing whether carbon credit projects lead to REAL emission reductions. Analyzing 2,346 carbon mitigation projects that account for nearly 1 billion tons of CO₂ (about 20% of all credits issued), researchers found that less than 16% of carbon credits issued constitute real emission reductions. Wind power projects in China and improved forest management in the US showed no statistically significant emission reductions. Cookstove projects achieved only 11% of claimed reductions, SF6 destruction 16%, and avoided deforestation 25%. Even the best-performing category, HFC-23 abatement, reached only 68% of claimed reductions. This assessment comes at a moment of carbon market expansion. The "offset achievement gap" identified by the study - 812 million credits that don't represent actual emission reductions - exceeds Germany's annual emissions. The research reveals three systematic issues: project developers often choose favorable data for their baseline or make unrealistic assumptions, methodologies sometimes use outdated data, and adverse selection leads to crediting projects that would have happened anyway (aka not "additional"). This evidence suggests carbon crediting mechanisms need reform to raise their potential for climate mitigation. It underscores the importance of scrutinizing carbon credit quality and prioritizing direct emission reductions over offsetting for businesses and investors. Kudos to Benedict Probst, Malte Toetzke, Andreas Kontoleon, Laura Diaz Anadon, Jan Minx, Barbara Haya, Lambert Schneider, Philipp Trotter, Thales A. P. West, Annelise Gill-Wiehl, Volker Hoffmann from great institutions.

Environmental imbalance has cost the world much more than it can comprehend. Carbon Credit Trading Schemes are floated to remove or reduce carbon emissions. Such credits can be purchased, sold, transferred exchanged due to the existence of carbon markets. The Carbon Credit Trading Scheme i.e. CCTS is a program that aims to reduce carbon emissions by establishing a domestic carbon market in India. It is a strong National Framework for the Indian Carbon Market -ICM via dependable national carbon credit electronic platform that is being established in light of necessity for the nation to achieve its ambitious climate goals. By pricing its additional actions towards reducing greenhouse gas -GHG emissions, this framework seeks to assist and complement various organizations that are working on programs to decarbonize the Indian economy. A comprehensive approach to decarbonize economy is provided by the two main mechanisms of Indian Carbon Market Framework: the Compliance mechanism, which attempts to address emissions from the country's energy use and industrial sectors, and Offset mechanism, which encourages voluntary actions for GHG reduction from entities not covered by compliance. India is taking a step toward lowering greenhouse gas emissions in line with its obligations under the Paris Agreement with CCTS 2023. This plan developed by the Ministry of Power's Bureau of Energy Efficiency will control carbon emissions by establishing a market-based system that allows businesses to exchange carbon credits. A permit that gives one ton of carbon dioxide emissions a monetary value is called carbon credit. The government sets quota on total emissions permitted in the nation, and CCTS works on the cap-and-trade basis. Companies are granted carbon credits depending on this cap, with each credit representing one ton of CO2 emissions. Companies that lower their emissions might provide financial incentive to do so by selling their extra credits to other businesses that need them. In the current year 2024, India made a bold move by updating its CCTS to allow non-obligated companies to participate in the carbon credit market. These new rules represent major step forward in India's developing carbon pricing regime by outlining the essential components of compliance mechanism under the CCTS. This initiative enables businesses and individuals to voluntarily reduce their emissions that contribute to global warming. With the introduction of an offset system, these entities can now register projects and obtain marketable carbon credit certificates. The goal of this update is to expand voluntary carbon market and effectively price emissions through trading of carbon credit certificates. In conclusion, the global push for carbon pricing and India's aggressive reforms of the carbon market are essential milestones in the direction of a sustainable future. Contribution by: Devanshi S. Jain I ANB Legal #carboncredits #environment #trading

Hot take: Geography and proximity to emissions matter far more than many people assume. While carbon credits can technically be sourced from anywhere, location plays a critical role in integrity, accountability, and climate relevance. Increasingly, buyers are looking closer to home, especially in developed markets such as the UK and New Zealand, because proximity offers clearer oversight and stronger governance. High-integrity projects located near the industries they aim to compensate tend to provide: ✔️ Stronger regulatory frameworks and legal protections ✔️ More transparent monitoring and verification ✔️ Better alignment between credit impact and the buyer’s footprint ✔️ Greater community, biodiversity, and economic co-benefits Local and regional carbon projects - such as UK woodland creation, peatland restoration, and engineered removals like biochar - are gaining traction because they offer climate impact that’s easier to validate, observe, and report on. The voluntary carbon market is shifting away from the idea that “a tonne is a tonne” regardless of geography. Instead, the emerging view is that where the climate action happens can be just as important as how it happens. For those looking to compare UK and international projects in one place, this directory provides a useful starting point: 🔗 https://lnkd.in/e5yE-5V4 Climate action is global, but trust and accountability often begin locally.

ISO - International Organization for Standardization x Greenhouse Gas Protocol (GHG Protocol) : A Partnership That Could Redefine Carbon Accounting One of the persistent challenges in global decarbonization efforts has been the fragmentation of greenhouse gas (GHG) standards. Companies often juggle ISO frameworks for compliance and GHG Protocol standards for disclosure, leading to overlaps, inefficiencies, and at times, confusion. The newly announced ISO–GHG Protocol partnership changes that equation. By harmonizing their portfolios into co-branded international standards, they are creating what amounts to a “common language” for emissions accounting. 💡 Why this matters: For businesses: Fewer frameworks to navigate, stronger clarity in reporting, and greater efficiency in supply chain engagement. For investors: Consistent, comparable, and reliable data to inform capital allocation decisions. For policymakers: A unified foundation that simplifies regulation and raises accountability standards. ⚙️ Strengthening Industry Loops This partnership has the potential to tighten the feedback loops across the sustainability ecosystem: 1.Corporate reporting feeds into investor decision-making with greater credibility. 2.Policy and regulation can align seamlessly with global standards. 3.Supply chains gain consistency, reducing duplication of efforts and enabling more granular data-sharing. ♻️The Bigger Take ! If successful, the ISO–GHG Protocol collaboration could accelerate the pace of corporate decarbonization, raise ambition levels across industries, and build trust in net-zero pathways. More importantly, it reframes carbon accounting not as a compliance burden, but as a strategic enabler of sustainable growth. In other words: harmonization is not just technical-it’s transformational. #Sustainability #ClimateAction #ISO #GHGProtocol #Decarbonization

Did you know that weak measurement and verification systems can undermine the credibility of entire sustainability and climate programs? Recent analysis by Senken of more than 2,300 carbon projects found that in some categories, fewer than 16% of issued carbon credits corresponded to real emission reductions, highlighting the risks of inadequate monitoring and verification systems. At the same time, global climate finance and carbon markets depend on rigorous Measurement, Reporting, and Verification (MRV) processes; because one verified carbon credit represents one tonne of greenhouse gas emissions reduced or removed, a unit that governments, investors, and institutions rely on to track real progress. These numbers reinforce a simple but critical lesson: credibility in sustainability is built on systems, not promises. In practice, this means investing in robust monitoring frameworks, conducting independent compliance audits, and ensuring that data can withstand scrutiny from regulators, financiers, and stakeholders. Organizations that prioritize these systems are not only better prepared for evolving disclosure requirements, they are also better positioned to attract investment, manage risk, and deliver measurable impact. As sustainability expectations continue to rise globally, the institutions that will lead are those that understand that accountability is not an administrative requirement; it is a strategic asset. Because in sustainability and climate action, what gets measured, verified, and audited is what ultimately builds trust and delivers lasting results.