Transition Plan Taskforce – Consultation Response
In April 2022 the UK Treasury launch a new taskforce to develop the gold standard for private sector net zero transition plans. In Autumn 2023 the Transition Plan Taskforce (TPT) held a consultation on its proposed recommendations and framework. Sylvera broadly supports the proposals but suggests that disclosure requirements regarding carbon credits should be further developed. Read our full response below:
We are fully supportive of clear requirements for disclosing the use and impact of credits.
This has already been proposed by financial regulators (e.g., SEC) and we would welcome a standardised set of disclosures for financial regulators to follow.
We suggest those disclosures should cover the following, for each group of credits with like characteristics:
- Number of credits purchased
- Credit ID and certification standard
- Host country
- Whether a corresponding adjustment has been applied
- Price paid
- Date of purchase
- Number and ID of credits retired
- Date of retirement
- The specific use to which the credit retirement was put, including the emissions scope retired against
- Whether third party verification was used, and if so of what form and from which organisation(s) - see second paragraph below
All of the above details should be provided comprehensively, meaning that in any given year reporting entities should provide this information for every credit they have bought, every credit they hold, every credit they have retired, and any claims made in association with any credits bought or retired.
To further aid this assessment of risk, credit buyers should also disclose the due diligence they have performed on the credits purchased, and how they assessed the impact, additionality, permanence, and risk of leakage of the credits (per Key Consideration 5). This could include both internal processes or verification, authentication, or subsequent monitoring / assessment by a reliable third party, for example carbon credit ratings agencies. This could also include information from independent initiatives such as IC-VCM, including whether a credit meets their Core Carbon Principles. However, this should be with the understanding that this is a binary judgement, and more nuanced quality assessments help further mitigate risk.
Per the proposed disclosures for the toolkit as part of Key Consideration 5, these disclosures should be made in the context of disclosures around how the purchaser is using credits as part of their climate pledges and how they have ensured they are not abusing credits to maintain business as usual emissions.
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