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Narrowing in on net zero: three pillars to support an expanded Carbon Management Hierarchy

  • Louisa O'Connell
    Sales Specialist
  • Stuart Leaver
    Research Associate
Underpinning ambitious net zero strategies are the three pillars of accounting, engagement and governance. Many companies designing a strategy will employ the Carbon Management Hierarchy (CMH), a mitigation strategy prioritising direct elimination, avoidance or reduction of emissions before additional offsetting.

Engagement with the Voluntary Carbon Market (VCM) needs to become a critical part of a corporate net zero strategy. Growing awareness of the VCM’s potential requires companies to consider how carbon credits can be best placed in an overall strategy. This is especially important for hard to abate emission categories due to their complexity to decarbonise.

Supported by the three pillars, a company could develop an expanded CMH model, which embeds carbon credits, to accelerate both corporate and global decarbonisation.

Here are some key takeaways from the report

  • Corporate emissions account for approximately 40% of the global total. Despite ongoing efforts to align to 1.5°C pathways, corporate net zero strategies are falling short of achieving this.

  • Accounting, engagement and governance are three core pillars that underpin the effectiveness of net zero strategies and an expanded Carbon Management Hierarchy (CMH) model.

  • Strategically offsetting emissions as part of a net zero strategy allows companies to set ambitious climate objectives, engage with hard to abate emissions, and contribute to global decarbonisation.

Contents

  • 01 Introduction & context

  • 02 The role of carbon markets

  • 03 Accounting

  • 04 Engagement

  • 05 Governance

  • 06 How the pillars support an expanded CMH

  • 07 Conclusions

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