The Net Zero Asset Owner Alliance (NZAOA), an investor group committed to climate change, has banned members from counting carbon removal schemes towards their emissions reduction targets before 2030, as the fast-growing market for carbon offsets continues to get criticism from stakeholders and groups.
The group said that the plan was to get members to focus on encouraging investee companies to reduce emissions across all sectors, rather than removing carbon that has already been emitted.
The move, which reflects broad concerns about the quality of some carbon removal schemes and criticism of companies that buy carbon credits instead of improving their own carbon footprints, is coming as the United Nations has said that carbon removal will be required to slow or stop climate change by 2050.
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The new policy applies to NZAOA members and the companies in which they invest, after a previous version prohibiting carbon offsets generated questions from members.
For the longer term, the NZAOA still wants members to invest in and support the development of a liquid and fully accountable market for carbon removal certificates.
“Investments in high-quality carbon removals will encourage demand and the development of the market,” said Jessica Andrews, UNEP FI investment lead and senior project manager for NZAOA. “However … we expect members to prioritise real-world abatement (decarbonisation) at least until 2030.”
Story was adapted from Reuters.