Nature-based solutions (NbS) leverage activities such as forest conservation, restoration and the sustainable use of natural ecosystems to address critical global issues, from biodiversity loss and climate change to human health risks. Yet, while promising, these solutions are severely underfunded. Approximately  $340-$467 billion is needed to fill the nature finance gap, and public sector funds alone cannot accomplish this.

The voluntary carbon market (VCM) can help make up this shortfall by channeling more private sector finance to nature-based solutions. Done right, carbon credits generated by NbS can help deliver global climate goals, foster the protection and restoration of natural ecosystems, and secure the rights and livelihoods of Indigenous Peoples and local communities.

However, ongoing challenges have limited the growth of the voluntary carbon market. On the supply side, there is a lack of confidence in the environmental and social integrity of carbon credits. On the demand side, there are concerns that the use of credits is diluting corporate climate action.

To help address these roadblocks, WRI is working to promote the credible use of carbon credits and drive finance toward high quality nature-based solutions. We aim to instill trust and confidence in a high integrity voluntary carbon market by promoting jurisdictional approaches to carbon crediting and issuing supporting guidance that increases overall corporate greenhouse gas (GHG) mitigation.

Companies and organizations are increasingly setting net-zero targets and looking to incorporate nature-based solutions into their climate mitigation strategies. WRI is conducting research and engaging with partner organizations and voluntary carbon market initiatives to provide the needed incentives and assurances to be able to deliver on global climate goals.

This initiative has four main objectives:

  • To strengthen the integrity of the voluntary carbon market while increasing financial flows to nature-based solutions.
  • To serve as a resource for companies looking to engage in the voluntary carbon market.
  • To influence outcomes of key voluntary carbon market initiatives.
  • To resolve conflicts among key initiatives within the VCM space and facilitate positioning on tough issues, such as beyond value chain mitigation (BVCM) and nesting.

Some examples of WRI’s work in this space include:

Publishing Guidance on the Voluntary Use of NbS Carbon Credits

In 2022, WRI published guidance on the use of NbS credits in the voluntary carbon market. The guidance provides 10 specific guardrails for companies who wish to use NbS credits responsibly, addressing aspects such as supply-side, demand-side and transaction integrity. These guardrails aim to ensure that NbS credits preserve environmental integrity, respect Indigenous and local communities' rights and livelihoods and safeguard biodiversity. They also reinforce that credits should be used to supplement, not reduce, an organization's emissions reduction efforts aligned with limiting warming to 1.5 degrees C (2.7 degrees F).

Participating in the Integrity Council for the Voluntary Carbon Market (IC-VCM)

The IC-VCM is currently the leading supply-side initiative assessing the integrity of carbon credit categories and the programs that certify them. WRI participated in the development of the IC-VCM's Core Carbon Principles (CCP), a set of 10 principles that act as a global benchmark for high-integrity carbon credits, and the Assessment Framework, the criteria used to determine if organizations meet these benchmarks. Carbon crediting programs can apply to be CCP certified, a label that will allow buyers to confidently identify carbon credits with high environmental and social integrity, and therefore increase investment in credits that are making a genuine impact on emissions. 

Collaborating with Other Organizations to Create the Tropical Forest Credit Integrity Guide (TFCI)

WRI is one of eight authoring organizations of the TFCI Guide, which helps companies evaluate forest carbon credits based on impact, quality and scale. Published in February 2023, the guidance intends to move the market toward credits with high social and environmental integrity by allowing companies to invest confidently in jurisdictional-scale tropical forest carbon credits.