Carbon credits, used responsibly and transparently, are a critical part of corporate climate action

Climate action, aligned to science, has always driven our sustainability strategy. We were one of the first companies to set science-based targets back in 2016 and one of the first to have a net zero target validated against the Science Based Targets initiative (SBTi) Corporate Net-Zero Standard.

Underpinning our 2040 net zero commitment is an objective to reduce our emissions by 90% (versus 2019), with the final 10% of residual emissions neutralized through high-quality carbon removal solutions.

We are making good progress on decarbonization, having reduced Scope 1 and 2 by 93% (versus 2019), 37% on Scope 3 operational emissions excluding our supply chains (and 26% including the supply chain). However, climate science tells us we can’t wait till 2040 to begin to address the problem of existing atmospheric carbon – there is too much CO₂ in the atmosphere today, which will continue to exacerbate devastating impacts such as intense rainfall, flooding, drought, and wildfires. This is why, in 2022, we started investing and retiring carbon credits alongside our decarbonization program.

There has been a lot of debate about how corporations should be using carbon credits, and their role in corporate climate action. We want to be very clear and transparent in our approach, which is why our new ESG policy separates our investment in carbon credits from decarbonization objectives.

Our approach is guided by the science: the decarbonization of the world is not happening fast enough, and we need to act as quickly as possible to avoid arriving at dangerous tipping points.

Current global climate plans put the world on track for around 2.6°C to 2.8°C of warming by 2100, according to the UN. This could drop to 1.9°C if all global net zero pledges were achieved, but this would require entire countries to take much more urgent action. Undoubtedly, there is a real risk that we will soon get to dangerous tipping points. We can’t wait decades to address this.

All pathways to net zero require nature and climate tech solutions in addition to decarbonization. But these solutions need to be scaled significantly, and urgently.

Even if we reach the global net zero milestone of 90% carbon reduction by 2050, we would still need to actively remove around five to 10 GtCO₂e per year at the planetary level to get to net zero and keep warming to safe levels. But currently the carbon removal market is simply not big enough, with less than one million tonnes of durable carbon removals being delivered annually. There is also a lack of supply of nature-based removals.

Unfortunately, the carbon market overall has been uncertain, causing a slowdown in investment in near term climate action.

Carbon credits have come under fire in the last few years (in many cases with justification), primarily driven by the lack of transparency or credibility in some corporate claims on “carbon neutrality,” as well as concern about credit quality. As companies have moved away from “neutral” or “zero” claims to avoid further scrutiny, it’s impacted the voluntary carbon market.  There has however been significant work across the market  to improve credit quality notably by the Integrity Council of the Voluntary Carbon Market (IC-VCM).

We want to play a part in supporting the scaling up of investment in nature and climate tech solutions.

This is why, alongside our carbon emissions reduction targets, we have reinforced and clarified a new objective in our ESG policy, which includes a specific commitment on investment in carbon credits.

To choose a level of investment, we’ve linked the amount of credits we buy to our footprint. In practical terms this means from 2025 onwards, we will have purchased and retired carbon credits aligned to our operational footprint, and from 2030 onwards for our full footprint, including supply chain. This approach aligns with the Voluntary Carbon Market Integrity Initiative.

Our position is clear, we continue to be guided by the science: decarbonization is our number one priority, but carbon removal and abatement projects outside our own operations are also critical to address global net zero. There can be no delay.

In terms of how we operate our program, we’ve set out a clear set of guiding principles, which cover everything from types of projects we choose and how we monitor them, to the spread of our portfolio covering both nature solutions and climate tech. Our approach will continue to evolve in line with best practice and available options.

The rigor we apply to our carbon credits investment goes beyond third-party standards.

It’s a given that our carbon credits are validated and certified by third-party standards. For example, focusing on standards that will pass the program level assessment by The Integrity Council for the Voluntary Carbon Market (ICVCM). But we’ve also added our own criteria, including wider social, biodiversity, and economic impacts, and contribution to systemic change, for example.

We have a purposefully diverse portfolio – we have chosen to support different kinds of solutions, in different ways, in different parts of the world.

We look at how we can leverage our investment in different ways. For example, we have projects where we are the only investor and invest directly. This kind of project may be longer term and focused on wider co-benefits to communities. We also buy credits from existing projects, either directly from developers or through trusted intermediaries. This is driven by wanting to support innovative approaches to systemic change and being present in a particular geography. We also work through funds where impact at scale through collaboration is a driver.

We support a mix of activities that both avoid new greenhouse gases entering the atmosphere and that remove existing carbon. them. While we are focusing on nature-based solutions because they can scale quickly and have significant co-benefits, we are aware of their limitations. So, as a technology company with entrepreneurialism as a key value, we seek opportunities to support the development of new technologies, such as direct air capture and storage, which are durable and have the potential to scale. We will continue to learn, listen to evolving best practice, and refine our approach.

Advocacy and public commitments are a key part of our strategy to help the carbon market scale up.

We know the market is complex. Credits from new projects are not “instant” and we need to be agile in our approach, able to adapt to circumstances and evolving best practices. This is one of the reasons why we participate in industry discussions on frameworks for the voluntary carbon market.

We are a member of the LEAF Coalition – a public‑private partnership focused on halting tropical deforestation at jurisdiction level. We are also part of the First Movers Coalition on carbon removal, which aims to accelerate the adoption of emerging climate technologies. Our public commitments drive our program forward, but we also hope they help scale effort globally and advance the future of climate commitments.

No time left to wait

The problem of climate change needs all the tools we have at our disposal thrown at it, fast, with a focus on results, continued learning, and improvement.