Navigating Climate claims

Using domestic carbon credits in Finland's credible claims
Event Overview

On 23 January 2024, Finnish stakeholders gathered in Helsinki to discuss credible climate claims, focusing on the demand for contribution claims based on domestic carbon credits. The event was organised jointly by Perspectives Climate Research, Tyrsky Consulting and the Finnish Chamber of Commerce. It is part of Nordic project on building capacity for voluntary carbon markets, funded by the Nordic Council of Ministers.

Part 1 - Introducing good practices for the voluntary carbon market

The event was opened by Teppo Säkkinen, Senior Advisor for Industrial and Climate Policy from the Finnish Chamber of Commerce. The Chamber of Commerce aims to promote functioning markets and fair competition, corporate responsibility and cost-effective, market-based climate action. For example, they have a Council of Ethics in Advertising and a Board of Business Practice. The Chamber has also recently launched a programme to support climate action by small- and medium-sized enterprises (SMEs), which together with insurance and investment company LähiTapiola. In his welcome speech, Teppo noted that carbon credits have a role in many companies’ climate work. Therefore, this event would focus on the demand for high-integrity carbon credits that are generated in Finland or elsewhere in the EU and are suitable for contribution claims and supporting host country targets, in line with good practices.    

Hanna-Mari Ahonen, Senior Consultant at Perspectives Climate Research, introduced good practices for climate claims that are based on carbon credits. She explained how emission reductions and removals that meet relevant minimum criteria can be certified as carbon credits and used for voluntary or compliance purposes. Using carbon credits voluntarily in line with good practices can help to achieve the Paris Agreement’s global 1.5-degree goal by contributing either to national climate targets or to mitigation beyond these targets. Good practices require, inter alia, reducing own value chain emissions in line with science, using only high-integrity carbon credits, reporting transparently and comprehensively and making only credible claims. Currently, carbon credits generated in Finland and the EU can contribute to the Finnish and EU climate targets and serve as a basis for contribution claims.

Photo by Emilie Yliheljo

Companies' perspectives on the Voluntary carbon Markets

Domestic carbon markets have potential but more regulation and guidance is needed to make them work, said Suvi Järvinen, senior specialist on the climate and environment at LähiTapiola, a Finnish insurance and investment company. LähiTapiola aims for carbon neutrality of its own operations by the end of 2025 and for a net-zero investment portfolio by 2050. While science-based reductions in own emissions are prioritised, LähiTapiola expects some emissions to remain and be addressed by buying carbon credits from the voluntary carbon market. LähiTapiola has an interest in domestic credits, since they are easier to understand and communicate, but also identified the need to avoid double claiming as a key challenge for current domestic markets. Suvi noted that, as awareness is rising, some companies are looking to adjust their climate targets and related communication to enable the use of domestic credits in a way that avoids double claiming. She also highlighted that many of LähiTapiola’s clients, including farmers and forest owners, can have a key role in providing climate solutions, including through the voluntary carbon market. LähiTapiola is motivated to be part of the solution, also by supporting the development of a credible domestic market. Finally, Suvi stressed that trust is a critical precondition for engaging in markets, especially for entities like LähiTapiola that operate in a highly regulated environment. They must comply with requirements and apply good practice, and they cannot take risks that could undermine their credibility. LähiTapiola calls for cooperation to further develop regulation and guidance so that the domestic carbon markets could truly contribute to climate targets and we could agree on common ways to communicate about it.

SMEs struggle to navigate the voluntary carbon market guidance and (mis)information, stressed Jussi Tamminen, founder and CEO of Maku Brewing, a small Finnish craft beer brewery. Since their launch, Maku Brewing has been seeking climate-smart solutions in their operations, such as using emission-free electricity and biogas for transport. They implement a new emission reduction activity each year. In addition, since 2020, Maku Brewing has calculated its value chain emissions and bought an equivalent amount of carbon credits to make their operations carbon neutral. For an SME, the costs relating to calculating carbon footprints and building carbon credits is disproportionally high compared with the potential benefits, which are limited only to marketing and communication. Finance and insurance providers have not taken carbon neutrality into consideration. Besides being the only upside, marketing also comes with risks of negative press and accusations of greenwashing. Jussi noted that guidance is often targeted at larger companies and there is a lot of unhelpful “noise” about the voluntary carbon markets. For an SME, it is very challenging to know which information and advice to trust when engaging in these markets.

Photo by Hanna-Mari Ahonen

Domestic credits are attractive to companies with a domestic client base, said Terhi Naukkarinen, sustainability manager at SOK, which is part of a Finnish network of companies in the retail and service sectors. Ninety per cent of their value chain emissions occur in scope 3, related to groceries and transport fuels. SOK’s current climate targets focus on their own operations, but include also goals that could change consumer behaviour and thus reduce scope 3 emissions, e.g. through increasing the share of plant-based groceries. SOK is also planning to set a net zero target for 2050, including targets for scope 3 emissions. In this context, the calculation of Forest, Land and Agriculture (FLAG) emissions is especially complex. Although the focus is on prioritising value chain emission reductions, carbon credits can also play a role in achieving the climate targets. Given their domestic client base and strong local presence, SOK has a strong interest in domestic credits and is following the market closely.   

Voluntary support for domestic climate action is very important for meeting Finland’s climate targets, concluded Karoliina Anttonen, Senior Ministerial Adviser, Legal Affairs for the Finnish Ministry of the Environment. She stressed that the government of Finland is responsible for all emissions that occur within its boundaries, and further domestic climate action is needed to meet the ambitious national climate target. She called for domestic voluntary carbon markets to contribute to the national target.

Part 2: Workshops on domestic carbon credits and contribution Claims

The workshop focused on the demand for domestic carbon credits and related contribution claims. Participants discussed the following questions:

  • When and for whom contribution claims can be useful?
  • What could these contribution claims look like?
  • What influences the demand of domestic carbon credits and related contribution claims?
  • Who are the key actors and what are their roles?
  • What could be the next steps for promoting domestic carbon credits and claims?

Photo by Hanna-Mari Ahonen

Take-home messages

Regarding domestic carbon credits, participants noted that:

  • They would be of interest to companies with a domestic client base
  • They could be used for communications targeted at consumers and/or investors
  • There is a need to increase companies’ awareness of contribution claims
  • Especially SMEs need support and readily available solutions for their climate action
  • Buyers expect carbon credits to be of high quality
  • The mitigation associated with carbon credits should be reflected in Finland’s national greenhouse gas inventory
  • There is currently interest in domestic carbon credits but actual demand is very limited
  • Currently marketing is the main driver for demand – domestic carbon credits do not help e.g. in accessing finance
  • There is a need for common, science-based rules and reducing “noise”
  • The potential for linking domestic carbon credits with ecological compensation should be explored

 

Regarding contribution claims, participants noted that:

  • Claims should be clear, easy to understand, concrete, standardised, trustworthy and verified by an independent third party
  • Claims could consist of a label (e.g. Nordic Swan Ecolabel?) and a QR code that provides access to additional information
  • The possibility to communicate claims as sponsorship should be explored. In this context, impact and effectiveness would need to be considered
  • There is a need to avoid the proliferation of claims of different types and levels
  • There is scope for national regulation, e.g. a green deal with the government and guidance from the consumer authority
  • Self-regulation and cooperation between non-state actors is needed to complement regulation

The role of the Finnish Chamber of Commerce should be explored, e.g. Council of Ethics in Advertising, Board of Business Practice and support programme for SMEs’ climate work

The recording of this event can be found here.

Share :
Share on facebook
Share on twitter
Share on linkedin