The world’s biggest companies, from Netflix to Ben & Jerry’s, are pouring billions into an offsetting industry whose climate claims appear increasingly at odds with reality
Standards for the offsets for many companies are set by Verra. Founded in Switzerland in 2007 and now based in Washington DC, Verra’s original two-person team has swelled to more than 80. At the time of writing, Verra was advertising 26 vacancies, seven of them with six-figure salaries. Household names like British Airways and Gucci rely on Verra to authenticate their credits, which now approves three out of every four carbon credits globally. Growth is ramping up, with sales jumping from around $7 million in 2018 to $41 million in 2021.
During last autumn’s climate negotiations in Egypt, Verra announced it had issued its billionth carbon credit, meaning that in 15 years it has rubber-stamped projects claiming to cancel out three times the emissions the UK produces in a year. Verra’s main role is to publish methodologies for creating carbon offsetting projects, including forest protection initiatives, and authenticate the credits they generate.
‘Avoided deforestation’ has always been controversial. At best, it underpins projects that save some of the planet’s most precious resources from destruction. At worst, it risks degenerating into a sort of protection racket where landowners extract fees in return for promises not to fire up the chainsaws. Often, it occupies a grey area in between, relying on hypothetical projections that can be tough to verify.
Gold Standard, Verra’s main competitor, refuses to issue credits from avoided deforestation. But rather than discrediting the methodology, this has simply helped Verra to corner a market, says Axel Michaelowa, head of international climate policy at the University of Zurich. Verra’s stance means that at least 30 per cent of credits currently being sold globally are for avoided deforestation.
“Verra has always been very good at somehow undercutting other standards in the voluntary market by being cheaper, by being less demanding,” Michaelowa said. “And less demanding, of course, means having lower environmental integrity.”
SourceMaterial’s investigation casts doubt on vast numbers of Verra’s carbon credits, raising the prospect that a $2 billion market, predicted to expand rapidly, is widely based on exaggerated claims.
Verra is becoming increasingly important. In 2021 a court in the Netherlands ordered a buyer of Verra-backed credits, Shell, to reduce its emissions. The oil major aims to get its annual carbon credit purchases up to 120 million by 2030 and is using its offsetting plans as part of an appeal against the decision.