Not all credits are the same. Here’s what companies need to know.

Navigating the complex world of carbon credits can be challenging for companies because not all are equal. 

Senior Manager, Resilient Food and Forest

A new report highlights differences in the approaches used to produce agricultural soil carbon credits and how this can cause uncertainty for companies looking to purchase or generate them. The findings put into focus the need to standardize protocols for quantifying how much soil carbon is sequestered. Doing so ensures that the carbon removed from the atmosphere is real and the carbon credits are equivalent.

Until consistent, high-quality standards are established for agricultural soil carbon credits, companies should pursue other opportunities today to reduce agricultural and land-based emissions at the scale and pace needed to meet ambitious climate goals. 

Companies must focus on reducing emissions from their own operations and supply chains as a guaranteed way to mitigate climate change. At the same time, especially in cases where there are emissions that will take more time to abate, companies should purchase high-quality carbon credits to accelerate near-term mitigation opportunities, such as investing in the LEAF program for REDD+ tropical forest carbon credits. 

Does soil carbon have a role to play in corporate climate strategies? 

Yes, but only in certain situations. The practices that have the potential to increase soil carbon sequestration can also improve water quality and build overall climate resilience. For food and agricultural companies whose supply chains include farms, deploying these practices could drive down their own Scope 3 climate footprint. 

However, the challenge arises when soil carbon credits are purchased to compensate for emissions elsewhere. That is because the current lack of comparability or consistency in protocols makes it difficult to reliably account for the exact amount of carbon sequestered. 

The protocols also manage differently for issues of additionality, leakage and permanence – critical elements of high-quality carbon credits. This makes it difficult to ensure that overall climate benefits have been achieved. In other words, is a “ton of carbon” actually a ton of carbon? This especially matters if the carbon sequestered is used to offset a ton of carbon elsewhere. 

Sure bet opportunities: Avoiding climate pollution and protecting forests 

Until rigorous guidelines are set for soil carbon credits that ensure environmental integrity, companies should prioritize setting science-based climate goals for both their own operational footprint as well as their value chain. These goals should encompass all greenhouse gas emissions, not just carbon. For example, food and agricultural companies can prioritize reductions in nitrous oxide and methane — often overlooked, invisible sources of climate pollution lurking in agricultural supply chains. 

We need companies to scale up investments in forest protection now, because we cannot solve climate change without it. In fact, protecting tropical forests offers one of the biggest opportunities for seeing immediate climate benefits. 

Business leaders can protect forests by eliminating deforestation in their own supply chains and supporting jurisdictional approaches to reduced deforestation. They can also purchase high-quality forest carbon credits through organizations like Emergent, which follow rigorous standards to ensure environmental and social integrity. Companies, too, can restore forests that, due in part to climate change, have experienced catastrophic fire or other emissions.

This is especially urgent as we are already seeing the effects of climate change in real time, such as the devastating wildfires tearing through the West, wreaking havoc on communities and posing immediate risks to local businesses. Despite these devastating fires, now is the time for businesses to double down on investments in high-integrity nature-based solutions. In other words, as fires continue to increase in severity and frequency, a “do nothing” approach is no longer viable.

Companies have both an opportunity and a responsibility to help put us on a path to a stable climate and to meet their climate targets in a meaningful way.