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Greenharbouring: a new way to protect offsetting and carbon neutral claims

Fri, 23 Oct 2026 10:33:37 GMT

A response to IETA’s safe harbour recommendation to governments

A few weeks ago we asked what a WEF/KPMG paper was setting up for the Coalition to Grow Carbon Markets' playbook, and who a safe harbour for carbon credits would really protect. [ 1 ]

Now we have the answer in writing.

This week IETA published Unlocking Demand in Voluntary Carbon Markets through Safe Harbour Mechanisms: A Recommendation to Governments . It was commissioned by the Coalition to Grow Carbon Markets. Its foreword is signed by officials from the UK and Indonesia, who co-sponsor the Coalition workstream that commissioned it, and who "commend this report to our fellow Coalition members." [ 2 ]

It asks governments to give companies a legal defence against greenwashing claims when they use carbon credits. Statutory immunity is the end goal. Government guidance or a government-endorsed label are offered as faster routes in the meantime.

We've read it closely. It gets the problem the wrong way round.

The problem isn't that companies making offset claims get sued. The problem is that many of those claims don't stand up. The paper's answer is not to make the claims more credible. It is to make them harder to challenge.

We have words for greenwashing and greenhushing. We'd suggest one for this: greenharbouring . Using the law to protect the very claims that the courts have been catching.

Offsetting is in scope. The limits are not defined.

The paper is explicit about what it wants to protect. "The scope of the safe harbour may extend to eligible use cases of credits for offsetting purposes." (p.9) [ 2 ]

What are those "eligible use cases"? The paper never says.

It asks the right question: "How, and under what conditions, may carbon credits be used to meet or support the related activity?" (p.10). Then it leaves the answer to each government. It states plainly that it "does not define what is regarded as a high-integrity credit nor a credible corporate net zero pathway" (p.9). And it asks governments to protect "the broadest range of claim types that its law allows" (p.11).

So the one thing that would decide whether a safe harbour protects integrity or undermines it is left blank.

It is clear which claims the paper has in mind, though. Company-level net zero, CO2-neutral and partial-offset claims are "the claims companies most want to make" (p.11). And "companies want to be able to use credits as a tool to help deliver their decarbonisation goals." Its model permitted statement defines "Carbon Neutral" as emissions "reduced along a documented pathway with residual emissions counterbalanced by qualifying credits". In other words, counterbalancing now, with any qualifying credit, not residual emissions at net zero with removals.

To be precise, the paper doesn't say credits should count toward emission reduction targets. But nothing in it rules that out. Its wording, that credits may "meet or support" a decarbonisation pathway, leaves that door wide open.

That matters, because the Coalition's own Shared Principles already allow credits to address "a portion of targeted emissions reductions". [ 3 ] Nobody has yet said which portion.

The science-based standards, set aside

Two processes have spent years working out what credits can credibly be used for: the SBTi Corporate Net-Zero Standard v2 [ 4 ] and the draft ISO 14060. [ 5 ] Both reached the same core conclusion. Credits cannot count toward emission reduction targets. SBTi v2 says so through its target implementation rules. The ISO draft says credits "shall not be used to claim progress towards interim or net zero GHG emission reduction targets."

The IETA paper mentions both in passing. It notes that "work is underway to develop consistent rules on the use of credits (e.g. SBTi, draft ISO 14060)", then says it will focus on litigation risk instead (p.8). Later it says ISO and SBTi "are not sufficient as a stand-alone defence", and suggests "national net zero/transition pathways" should also be recognised, "since not all sectors can follow SBTi (e.g. no SBTi pathway exists for the oil & gas sector)" (p.15).

So the standards are acknowledged, then sidelined. And the oil and gas sector is offered a route around them.

It's not only SBTi and ISO. VCMI, which hosts the Coalition's own Secretariat [ 6 ], says the same thing in its Claims Code: "Carbon credits cannot be counted towards the achievement of within-value chain emission reduction targets." [ 7 ]

Compare how each of these was built.

SBTi v2

A public call for evidence on carbon credits and other environmental attribute certificates drew 438 submissions from 421 individuals. [ 8 ]
Its evidence synthesis found that the least-biased studies suggest "various types of carbon credits are ineffective in delivering their intended mitigation outcomes." [ 8 ]
The first public consultation drew 857 completed responses from 60 countries. [ 9 ]
The second drew 915 responses from 61 countries. [ 10 ]
Expert working groups covered specific topics, including one on Ongoing Emissions Responsibility.

That process followed the backlash against the SBTi Board's April 2024 statement on carbon credits, and also included an independent systematic review of the peer-reviewed literature. We set out that history in an earlier piece on the ISO 14060 vote. [ 11 ]

ISO 14060

Two years of development through national standards bodies.
A 12-week public consultation through national members, drawing nearly 5,000 comments.
A ballot of 88 national bodies, which the draft didn't pass. It is now being redrafted. [ 12 ]

The IETA paper

Three roundtables, at IETA's Barcelona, London and Hong Kong summits, with "over 150 people" drawn from "IETA members, the Coalitions' Business Advisory Group and some of the Coalition member governments" (p.14). The Hong Kong session was listed as "By Invitation Only". [ 13 ] The paper doesn't say how many of the 150 attended more than one session.
A survey of 28 respondents (p.15). Its headline finding, that "69% favoured a form of hard safe harbour", comes down to about 19 organisations.
No sign of civil society, consumer bodies, litigants, standard setters or academics in the process.

The SBTi and ISO processes were open, evidence-based and international. The IETA process was small and closed, and drew almost entirely from the market. Yet it is the IETA paper that now asks governments to legislate.

Litigation is access to justice, not a nuisance

The paper never calls these cases frivolous. It doesn't need to.

It describes a "disproportionate level of litigation risk" (p.8). It lists thirteen cases, "collated with the help of AI" (p.19), and deliberately leaves out the outcomes, because "the litigation does not have to succeed to be a success for the claimant" (p.18). The message is clear enough: these cases are an obstacle to legitimate business, to be managed away.

So here are some outcomes the paper doesn't mention.

KLM. In March 2024, the Amsterdam District Court found KLM's "Fly Responsibly" claims misleading. [ 14 ]
Apple. In August 2025, a Frankfurt court found Apple could no longer advertise its watches as "CO2-neutral" in Germany. [ 15 ]
EnergyAustralia. Missing from the paper's list altogether. In May 2025, Parents for Climate's Federal Court case ended with EnergyAustralia publicly acknowledging that "offsets do not prevent or undo the harms caused by burning fossil fuels". [ 16 ]

These weren't attempts to block legitimate climate action. They were consumers and citizens holding companies to account for claims that didn't stand up. In many jurisdictions, this is one of the only avenues they have.

What courts and treaties say about access to justice

The Inter-American Court of Human Rights addressed this directly in its 2025 advisory opinion on the climate emergency. [ 17 ] It's a voice many in the nature-based carbon market rely on when it comes to rights and nature. It said States must "adopt a range of regulations to discourage greenwashing and undue corporate influence in the political and regulatory domains" (para. 347).

On voluntary best practice, it is even more pointed. Self-regulatory frameworks should be built into regulation, but "this regulation must, in any case, establish binding conditions to avoid practices such as greenwashing" (para. 360). The Court also devotes a full section to access to justice in climate matters.

That is the opposite direction to a safe harbour. The Court wants voluntary standards turned into binding conditions that prevent greenwashing. The IETA paper wants them turned into a legal shield against challenge.

The same principle is written into treaty law. Under the Aarhus Convention, to which both the UK and the EU are parties, each party must ensure members of the public "have access to administrative or judicial procedures to challenge acts and omissions by private persons and public authorities which contravene provisions of its national law relating to the environment" (Article 9(3)). [ 18 ] How far that reaches into green claims is for lawyers to argue. But access to justice in environmental matters is an obligation, not a courtesy. A safe harbour points the other way.

The International Court of Justice's advisory opinion doesn't address greenwashing. It does confirm that States must "regulate the activities of private actors as a matter of due diligence" (para. 428), with rules "accompanied by effective enforcement and monitoring mechanisms" (para. 282). [ 19 ] It is hard to square that with weakening enforcement against misleading climate claims.

The direction of consumer law

Consumer law is moving the same way. From 27 September 2026, EU rules ban claims that a product has a neutral, reduced or positive climate impact on the basis of offsetting. [ 20 ] The IETA paper accepts that a safe harbour cannot protect claims the law prohibits. Its answer is to focus protection where the law hasn't yet caught up: company-level neutrality, net zero and partial-offset claims. The EU's broader Green Claims Directive has stalled since June 2025 [ 21 ], so the picture isn't entirely one-way. But the destination is clear, and a safe harbour would be travelling in the opposite direction.

Who is left to challenge a claim?

The paper's summary of its roundtables is unusually candid about the aim. A safe harbour only helps once a dispute reaches court, it notes, and it can't prevent reputational damage. So "this points toward an immunity-style approach (e.g. AB 1911) that reduces the likelihood of litigation being brought at all" (p.15).

That is the heart of the matter. The goal isn't only to win cases. It's to stop them being brought.

The eco-label route shows how. Under the EDF model in the appendix, "information a certification scheme does not require is not 'material information' a company can be faulted for omitting". And "a public authority that has set the criteria, accredited the assessors and issued the certificate faces obvious difficulty in later contending that the claim it authorized misleads the public" (p.20). Consumers lose the right to argue a claim misled them. The regulator loses the ability to say so. Who is left?

This isn't a hypothetical risk. Canada, a Coalition member, has already removed the public's right to bring greenwashing complaints about business activities to its Competition Tribunal. Canadian environmental groups opposed the change in exactly these terms. Private access to the Tribunal was "the most effective way to challenge greenwashed business claims", they argued, because "Canadians cannot rely on the Competition Bureau for enforcement". [ 22 ] Australia's climate disclosure law limits enforcement of some disclosures to the regulator alone for three years. The Annex sets out these and other examples of how safe harbours have been used, and how they've fared.

The pattern is a familiar one. Immunity statutes are defended on the grounds of litigation risk, and criticised for leaving harmed parties without a remedy. Several of the examples in the Annex follow it, from US securities law to Canada's Competition Act. The IETA paper makes the first argument at length. The second is the one governments should weigh before they legislate.

There is a simple answer

If companies are worried about being sued over offset claims, they can stop making compensation claims. The paper's own research shows contribution claims are the "safest formulation" in every jurisdiction it reviewed (p.16). Which brings us to the part of the paper we find hardest to accept.

A government label has been tried. It didn’t work.

Alongside government guidance, the paper's other route that avoids new legislation is a government-endorsed certification or eco-label (p.12). It argues that "because the government endorses and sponsors the certification programme, compliance binds the regulator and provides a safe harbour from 'greenwashing' litigation for companies that use the certification mark or ecolabel." The EDF note in its appendix goes further: "The State, not the company, defines what the claim means" (p.20).

Australia has run exactly this experiment. Climate Active was the federal government's carbon neutral certification scheme, complete with a government-backed trademark.

It didn't stop litigation. EnergyAustralia's Go Neutral product was certified under Climate Active, and Parents for Climate took the company to the Federal Court anyway. [ 23 ] The case ended with the admission quoted above: offsets "do not prevent or undo the harms caused by burning fossil fuels." Parents for Climate called the scheme "a kind of state-sponsored greenwashing". [ 23 ] The Environmental Defenders Office had already criticised it for relying heavily on offsets of questionable integrity, for not requiring scope 3 emissions, and for putting the government in the position of both regulator and beneficiary of trademark licence fees. [ 24 ]

In July 2026 the Australian Government announced it would close Climate Active, with certification ending on 30 June 2027. [ 25 ] Its stated reasons were the arrival of mandatory climate disclosure, more mature international guidance, and public demand for direct emission reductions. [ 26 ] Parents for Climate's view is blunter. The label had become "the shield companies held up whenever anyone questioned their claims." [ 27 ]

The IETA paper doesn't name Climate Active. It refers only to "companies who followed a government-run programme (Australian) that provided both guidance on process and permissible claims, yet they still faced litigation" (p.15). The lessons it draws are that government programmes "don't necessarily keep pace with litigation risk" and need to "align internally with other regulation". It doesn't mention that the programme is being closed. And it still recommends the same model to every other government.

The one national certification scheme that has actually been tested didn't protect companies from litigation. It didn't protect consumers from misleading claims either. It is now being shut down.

The answer they dismiss

The paper accepts that contribution claims are "the natural ceiling for safe harbour protection in most jurisdictions". Then it dismisses them in the same breath: they "do not meet the commercial needs of most companies and currently have no clear use case" (p.14).

No clear use case? In June, SBTi built one into its Corporate Net-Zero Standard v2. [ 4 ]

Its Ongoing Emissions Responsibility (OER) recognition rewards companies that take responsibility for the emissions they are still producing on the way to net zero. It funds verified mitigation and other climate action beyond their value chain, at three levels: Engaged, Advanced and Leadership. It is "a complement, not a substitute" for cutting a company's own emissions. Those outcomes are reported separately and never netted against the inventory.

That's a business case. It is four months old. It hasn't yet been given a chance.

This week Giulia Carbone of the World Business Council for Sustainable Development made exactly this point on Ecosystem Marketplace. [ 28 ] A WBCSD member survey found companies know OER well but are not yet acting on it. "The value to the company is ultimately in recognition," she writes. Companies "showing leadership on ongoing emissions responsibility will take courage", and those "testing, trying and addressing their ongoing emissions deserve to be celebrated."

Her article is titled "OER needs air cover, not just an obligation." She's right. If governments want to give companies air cover, they should give it to contribution claims.

The IETA paper takes the opposite route. It assumes compensation claims are the only ones companies will pay for. It treats litigation as the barrier. So it proposes protecting compensation claims from the courts.

The better route is to make contribution claims recognised and valued, so companies no longer need to make compensation claims at all. That route needs no change in the law.

Why this matters now

The Coalition's policy playbook is due at COP31. It will "outline a range of ways for policymakers to take action on the Coalition's Shared Principles". [ 6 ] This paper was commissioned by the Coalition and published only weeks before it. Its closing call is for governments "to seek convergence through The Coalition to Grow Carbon Markets" (p.13). It even suggests "the Coalition could work to develop a harmonised position" on how companies may use credits (p.23).

Put those pieces together:

Shared Principles that allow credits to address "a portion of targeted emissions reductions" [ 3 ]
a safe harbour that extends to "offsetting purposes" without defining which uses are eligible
governments invited to recognise national pathways where SBTi doesn't fit

Together, these would give the use of credits toward decarbonisation targets something it has never had: the appearance of government backing.

It also lands at a sensitive moment for ISO 14060. The paper names the draft as "potentially a foundation for safe harbour claim-setting rules" (p.14). The draft already goes one step further than SBTi. It allows credits as "one possible remedial action" to "maintain or regain a claim" when a company misses an interim target. [ 5 ] If safe harbours are anchored to ISO claims, that remedial use becomes legally protected. And the pressure on the redraft will be to widen it.

Questions for the Coalition before COP31

Will the playbook allow credits to count toward decarbonisation targets? If so, which "portion"?
Will any safe harbour be anchored to SBTi v2 and ISO 14060, or to national pathways designed around them?
Why should governments protect offsetting claims, rather than recognise the contribution claims that every jurisdiction already treats as safest?
How does a safe harbour square with the Inter-American Court's call for "binding conditions to avoid practices such as greenwashing"?
And where in the process were consumers, civil society and the people who brought these cases?

We support high-integrity carbon markets, and the finance they can bring to forests and developing countries. But integrity isn't something you can legislate into a claim after the fact. Make the claims credible, and they won't need a safe harbour.

Interested in others' views, particularly from those involved in the SBTi and ISO processes, the lawyers and NGOs who have brought these cases, and companies already making contribution claims.

Annex: How safe harbours have been used, and how they have fared

Safe harbours are not new, and they are not confined to any one legal system. The examples below show where they have been used to shield corporate statements from legal challenge, and what happened next.

1. United States: gun industry immunity (2005)

The Protection of Lawful Commerce in Arms Act bars most civil suits against gun makers and sellers for harm caused by someone else's criminal or unlawful misuse of a gun, and it ordered pending suits by victims and cities to be dismissed. Congress's findings called such suits "an abuse of the legal system". [ 29 ] Critics say it "has largely closed the courthouse doors to victims and municipal leaders", and repeal bills have been introduced in successive Congresses without success. [ 30 ] But the Act deliberately leaves marketing exposed. Its "predicate exception" allows suits against a maker or seller that knowingly broke a law applicable to the sale or marketing of guns. That is how the Sandy Hook families' claim against Remington, brought under Connecticut's unfair-trade-practices law, survived and settled for $73 million in 2022. [ 31 ] It protects companies from liability for what others do with their products, not from challenges to their own claims.

2. United States: forward-looking statements in securities law (1995)

The Private Securities Litigation Reform Act protects company forecasts from private securities claims where they are accompanied by "meaningful cautionary statements" and are not knowingly false. Congress passed it over a presidential veto. It has drawn sustained criticism from investor advocates and scholars, one of whom asked whether it was a "safe harbor for the innocent or modern day Port of Tortuga for the buccaneers of Wall Street". [ 32 ] It applies to forward-looking statements, not to claims about what a company has already done, and it excludes knowingly false statements.

3. United States: the SEC climate disclosure rule (2024)

The Securities and Exchange Commission's climate disclosure rule extended a similar safe harbour to transition plans, scenario analysis, internal carbon prices and targets. [ 33 ] The rule was challenged in the courts, and in March 2025 the SEC voted to stop defending it. [ 34 ] The safe harbour never took effect.

4. Australia: modified liability in climate disclosure law (2024)

Australia's mandatory climate disclosure regime includes "modified liability" for scope 3 emissions and scenario analysis during its first three years. Only the regulator, ASIC, can take action on those disclosures, and only for injunctions and declarations, not penalties. The Environmental Defenders Office argued that this "waters down ASIC's enforcement powers at a time when greenwashing is prolific" and removes the role third parties play in holding companies to account. [ 35 ] The protection is time-limited and covers estimates that are inherently uncertain, not marketing claims.

5. Canada: rolling back greenwashing provisions (2026)

In 2024 Canada amended its Competition Act to require environmental claims about a business to be substantiated "in accordance with an internationally recognized methodology", and allowed private parties to bring such claims to the Competition Tribunal. Bill C-15, which received Royal Assent on 26 March 2026, removed both for claims about a business or its activities. [ 36 ] Business groups welcomed the change. Environmental lawyers and civil society groups warned that it would "weaken the enforcement architecture necessary to meaningfully deter deceptive environmental claims". [ 37 ]

6. United States: "light" cigarettes (2008)

In Altria Group v. Good , cigarette manufacturers argued that federal law and the Federal Trade Commission's handling of tar and nicotine testing shielded their "light" and "lowered tar" claims from state consumer-fraud suits. The US Supreme Court disagreed. It held that the claims concerned "a duty not to deceive", and that where a pre-emption provision has more than one plausible reading, courts should "accept the reading that disfavors pre-emption". [ 38 ] Government involvement in the measurement method did not license a misleading claim.

Observations

The safe harbours that have endured tend to share three features. They protect statements about the future, not claims about what has already been achieved. They are limited in time or scope, or they preserve the regulator's role. And they exclude knowingly false or misleading statements. The proposal in the IETA paper would protect claims about outcomes, such as carbon neutrality or partial offsetting. It sets no time limit. And under its eco-label route, the state rather than the courts would settle what a claim means. The closest real-world precedent for that route, Australia's Climate Active scheme, discussed in the article above, is now being closed.

References

[1] Climate Contributions, "Reading the Play: How a WEF/KPMG Paper Sets Up the Coalition to Grow Carbon Markets' Playbook" , LinkedIn, 1 October 2026.

[2] IETA, Unlocking Demand in Voluntary Carbon Markets through Safe Harbour Mechanisms: A Recommendation to Governments , commissioned by The Coalition to Grow Carbon Markets, October 2026. Page numbers refer to the printed pages. Announced in "IETA calls on governments to offer safe harbour to companies using carbon credits" , 22 October 2026.

[3] Coalition to Grow Carbon Markets, Shared Principles for Growing High-Integrity Use of Carbon Credits by Companies and Other Buyers , November 2025.

[4] Science Based Targets initiative, Corporate Net-Zero Standard, Version 2.0 , June 2026. See C25-C26 (target implementation), section 6 and C43 (Ongoing Emissions Responsibility), and Annex A.9.

[5] ISO, ISO/DIS 14060 Draft International Standard (net zero aligned organizations) , June 2026, clauses 5.4 and 16.6.

[6] Coalition to Grow Carbon Markets, Policy Playbook announcement , 23 June 2026.

[7] VCMI, Claims Code of Practice, Version 3.0 , April 2025, Box 1, p.14.

[8] SBTi, Evidence Synthesis Report Part 1: Carbon Credits , July 2024.

[9] SBTi, Corporate Net-Zero Standard V2: First Public Consultation Feedback Report , November 2025.

[10] SBTi, Corporate Net-Zero Standard V2.0: Second Public Consultation Feedback Report , June 2026.

[11] Climate Contributions, "ISO 14060 and the NO vote: separating the fair critique from the unsupported fix" , LinkedIn, 3 September 2026.

[12] Trellis, "ISO members send net-zero draft back for revisions" , 23 September 2026. See also ESG Today, "ISO's Proposed Net Zero Standard Fails Initial Vote Amid Record Feedback" , 29 September 2026.

[13] IETA, Asia Climate Summit 2026 agenda , "Safe Harbour for Corporate Use of Carbon Credits Roundtable", 7 July 2026, Hong Kong Convention and Exhibition Centre.

[14] Al Jazeera, "Dutch court ruling considers national airline guilty of greenwashing" , 20 March 2024.

[15] ESG Dive, "'Carbon neutral' Apple Watch not actually carbon neutral, says German court" , August 2025.

[16] ABC News, "EnergyAustralia apologises over claims of 'greenwashing' with Go Neutral products" , 19 May 2025.

[17] Inter-American Court of Human Rights, Advisory Opinion OC-32/25, Climate Emergency and Human Rights , 29 May 2025, paras. 347, 360 and 521, and section on the right of access to justice.

[18] UNECE, Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters (Aarhus Convention) , Article 9(3), UK Treaty Series No. 24 (2005). The UK ratified in 2005; the European Community approved it in 2005 .

[19] International Court of Justice, Obligations of States in respect of Climate Change, Advisory Opinion, 23 July 2025, paras. 282 and 428. Full text in International Legal Materials .

[20] Directive (EU) 2024/825 on empowering consumers for the green transition, 28 February 2024, Annex I point 4a; applies from 27 September 2026.

[21] Hogan Lovells, "On Hold: EU pulls the plug on Green Claims Directive" , 1 July 2025.

[22] Ecojustice, Canadian Association of Physicians for the Environment, Équiterre, Greenpeace Canada and Centre québécois du droit de l'environnement, "Budget 2025: Don't water down Canada's anti-greenwashing rules" , December 2025.

[23] RenewEconomy, "Parents for Climate put utilities on notice after landmark win against 'state sponsored greenwashing'" , 30 May 2025.

[24] Environmental Defenders Office, "Questionable Climate Active certification scheme is coming to an end" , 28 July 2026.

[25] Enviliance, "Australia Climate Active Carbon Neutral Certification to End 2027, Successor Scheme Consultation Open" , August 2026. See also the DCCEEW announcement .

[26] The Fifth Estate, "Climate Active is closing, but what does this actually mean for the industry?" , 30 July 2026.

[27] Nic Seton, "Parents took an energy giant to court over 'carbon neutral'. The government just scrapped the scheme that made it possible" , The Point, 4 August 2026.

[28] Giulia Carbone (WBCSD), "OER needs air cover, not just an obligation" , Ecosystem Marketplace, October 2026.

[29] Congressional Research Service, The Protection of Lawful Commerce in Arms Act: An Overview of Limiting Tort Liability of Gun Manufacturers , R42871, 20 December 2012.

[30] Center for American Progress, "Frequently Asked Questions About Gun Industry Immunity" , 4 May 2021.

[31] Jacob D. Charles, "Sandy Hook Gun Settlement Marks a Turning Point" , Bloomberg Law, 28 February 2022.

[32] "Private Securities Litigation Reform Act of 1995: safe harbor for the innocent or modern day Port of Tortuga for the buccaneers of Wall Street?", law review article (vLex) .

[33] Deloitte, "Heads Up: Comprehensive Analysis of the SEC's Landmark Climate Disclosure Rule" , March 2024, updated April 2024.

[34] Eversheds Sutherland, "SEC ends defense of climate disclosure rules" , March 2025.

[35] Environmental Defenders Office, "New climate disclosure laws improve corporate accountability, with loopholes" , 5 February 2024.

[36] KPMG Canada, "Changes to Canada's anti-greenwashing laws and business risk" , April 2026.

[37] Environmental Justice and Sustainability Clinic, Osgoode Hall Law School, "Regulatory Retreat: How Bill C-15 Could Undermine Greenwashing Enforcement in Canada" , 12 March 2026. See also CBC News, "Businesses welcome changes to Canada's greenwashing laws, but environmentalists aren't happy" .

[38] Altria Group, Inc. v. Good , 555 U.S. 70 (2008), syllabus (Cornell LII) .

A full PDF version of this piece is available for download here .

ISO 14060 and the NO vote: separating the fair critique from the unsupported fix

Thu, 03 Sep 2026 08:41:37 GMT

This is a subtitle for your new post

Alexia Kelly runs the Carbon Policy and Markets Initiative at the High Tide Foundation, and sits on the oversight bodies of both the Integrity Council for the Voluntary Carbon Market and the Voluntary Carbon Markets Integrity Initiative. Over the past fortnight she has published two LinkedIn posts recommending a NO vote on ISO/DIS 14060 Net Zero Aligned Organizations. Most of the first post is a fair critique of a genuinely rough draft. Buried in the second is a different kind of request, and it is the one worth pulling apart on its own: carbon credits, she argues, should be allowed to count toward Scope 1, 2 and 3 emissions targets.

Where the critique is fair

A voluntary standard that requires companies to publish phase-out schedules, asset-stranding risk and cash-flow implications inside their core financial planning documents, as Clause 9 currently does, is not going to clear legal and risk review at most companies. A standard only the largest, best-resourced firms can operationalise is not much of a standard at all. Five separate target types, each carrying its own governance and assurance burden, is genuine over-engineering, particularly where they overlap. Energy efficiency, for instance, is already a subset of Scope 1–3 performance. And "a competent person or party" is a considerably weaker verification bar than the independent, accredited third-party verification that CORSIA, Article 6.4 and the ICVCM's own Core Carbon Principles already require.

None of that is an argument for letting credits count toward targets. It is just good drafting advice, and ISO's Technical Committee should take it.

The line that matters

The line worth scrutinising more closely is this one, from Kelly's second post: "Both supply chain-tied and global mitigation market-based instruments (in current parlance ECCs and carbon credits) should be allowed to count towards specified thresholds of Scope 1, 2, and 3 targets." It sits as one item among ten, wedged between simplification requests that are hard to argue with. It deserves to be pulled out and judged on its own terms.

What the evidence actually says

When the SBTi Board tried to open this exact door in April 2024, without its own technical council's sign-off, the backlash was immediate. The UN's own High-Level Expert Group on Net-Zero Commitments had already concluded that credits "cannot be counted toward a non-state actor's interim emissions reductions." SBTi's staff then did the thing that arguably should have happened before the Board statement, not after it.

Two evidence documents came out of that process in July 2024. The broader one, an Evidence Synthesis Report drawing on submissions across several confidence tiers, concluded that "various types of carbon credits are ineffective in delivering their intended mitigation outcomes," and flagged clear risk that corporate offsetting could hinder the net-zero transformation and reduce climate finance. The narrower one, an independent systematic review restricted to peer-reviewed academic literature, screened over ten thousand articles and found five, maybe six, rigorous enough to include at all. It called the resulting evidence base negligible.

Where SBTi's own thinking has actually landed is more interesting, and more useful. The Corporate Net-Zero Standard V2.0, released this June and effective from February 2027, does not leave the question to inference. Chapter 5 sets the baseline: "Changes in the physical GHG inventory shall constitute the basis for any emissions reduction claims." Credits never touch that inventory, so they cannot touch the claim. A company that underperforms against its target is recommended to buy removals, but the standard is explicit that "such removals shall not be counted toward target progress." Where credits do fund mitigation outside the value chain, the standard gives that its own name, a "system contribution claim," and limits it accordingly: the company may say only that it is "contributing to the decarbonization of the systems in which the company's value chain activities are embedded," never that its own inventory has moved. Alongside all of that sits a separate, voluntary track, Ongoing Emissions Responsibility, for funding verified mitigation beyond a company's target requirements. SBTi's Board Chair, Francesco Starace, describes it as "a complement to reducing your own emissions, not a substitute for it."

That is essentially the Ongoing Emissions Responsibility distinction we have written about on this site before: taking responsibility for what has not yet been eliminated is a different act from claiming it has been cancelled out. SBTi has not just floated that distinction. It has finalised it, written into a released standard rather than a consultation draft.

VCMI's own rules do not support it either

This is the part that should give ISO's Technical Advisory Group the most pause, given who is making the request. VCMI's Claims Code of Practice, the framework Kelly's own initiative helps govern, says it twice. "Carbon credits cannot be counted towards the achievement of within-value chain emission reduction targets." And later: credits "are not counted towards the internal emissions reductions that a company undertakes to meet decarbonization targets." The Silver, Gold and Platinum tiers reward credit retirement only as mitigation beyond the value chain, layered on top of a science-aligned target already being met. Never a substitute for one.

Even VCMI's one real carve-out for Scope 3, the Scope 3 Action Code of Practice launched at the end of April this year, is considerably narrower than what Kelly is asking ISO to adopt. It caps credit use at 25 per cent of a company's total Scope 3 emissions in any given year, requires full gap-matching, and sets a hard 2040 deadline to close that gap through real reduction. And even that bounded, time-limited exception drew criticism at launch. NewClimate's Thomas Day warned it "risks dialling back the already insufficient levels of corporate climate ambition" and could let laggard competitors "exaggerate their own efforts" against genuine climate leaders. Carbon Market Watch's Lindsay Otis Nilles was more direct: VCMI, she said, "risks undermining its own credibility by allowing companies to present themselves as climate leaders while, in reality, falling behind on their commitments."

So the outer edge of what the VCMI is prepared to defend is a capped, gap-matched, deadline-bound exception for one scope, and a contested one at that. Full target-counting across all three scopes sits well outside that edge. It is not a modest extension of flexibility VCMI already allows. It is a different proposal altogether.

The empirical case is thinner than it looks

The study usually reached for here is the 2023 Forest Trends and Ecosystem Marketplace finding that companies buying credits are 1.8 times more likely to be decarbonising year over year, and 3.4 times more likely to hold an approved science-based target. It is a real dataset, 7,415 companies, $110 trillion in assets. But the paper itself says the relationship is correlational, and credits made up roughly 2 per cent of those companies' total emissions. Firms that are already climate leaders for other reasons are also the firms most likely to be buying credits. That is not evidence the credits caused the leadership.

A more recent Carbon Market Watch analysis, published last November and drawing on Max Planck Institute research, goes further and finds no proven causal link at all, with some evidence pointing the other way: heavy credit purchasing can crowd out internal reduction effort through something close to moral licensing. The empirical pillar under "credits accelerate real decarbonisation" is thinner than the campaign built on top of it.

The argument moved because the evidence didn't

Two processes have now actually tried to answer this question properly, and both were run by people with every reason to want credits to succeed. SBTi commissioned the most rigorous review this question has had anywhere, an evidence synthesis and an independent academic literature review, and when its own Board tried to jump ahead of that process in 2024, its own staff's findings overruled it. VCMI, an initiative built by and for market participants, wrote the opposite conclusion into its foundational Claims Code instead of the one Kelly wants. Neither of those was a hostile audience. Both looked at the evidence and landed on no.

That has not ended the push to get credits counted toward targets. It has just moved off the ground where it lost.

On the ISO side, that shows up exactly the way it does in Kelly's post: as one line inside an otherwise reasonable ten-point list, the kind of item that gets waved through alongside genuine drafting fixes if nobody stops to pull it out and look at it on its own. On the government side, it shows up as momentum instead of an argument. The Coalition to Grow Carbon Markets has published three documents since COP30, Shared Principles, a Plan of Action, and a Programme of Work for 2026, without ever answering the one question that matters here. Principle A of the Shared Principles allows companies to retire credits against remaining emissions, "which may include a portion of targeted emissions reductions," and/or for action above and beyond targets. Which portion, under what conditions, or how that squares with a target at all is still not stated anywhere in the two documents that followed. In June, at London Climate Action Week, the Coalition announced that a policy playbook is coming, timed for release at COP31, meant to tell governments how to act on those same Shared Principles. In August it added Turkiye, Ghana and Luxembourg, taking its membership to fourteen governments.

A playbook is meant to tell policymakers how to implement a position. You cannot implement a position you have never stated. An organisation that has spent a year publishing on exactly this topic, and is now moving straight to implementation guidance while the underlying definitional question sits untouched, is not being vague by accident. Recruiting governments and shipping documents is easier than winning an evidence review, and it produces the same result without ever having to defend it in the open the way SBTi did.

Where credits do belong

None of this means credits have no role. ISO should not let anyone talk it into that position either. It means credits belong somewhere else in the standard than where Kelly is trying to move them.

We have made this argument before, from the other direction, in our Explainer on Clause 11.3.3 of this same draft. That clause sets up an emissions-linked climate finance mechanism, close in logic to SBTi's own Contribution Budget Approach, and it is fundamentally contribution-oriented: organisations recognise their remaining emissions still occur, and finance additional mitigation alongside reducing them, rather than claiming the emissions have been cancelled out. Our concern with Clause 11.3.3 is that Note 3 then muddies this by treating ISO 14068 carbon neutrality as an apparently equivalent pathway, when, as we wrote at the time, "contribution approaches and compensation-based carbon neutrality claims rest on different foundations."

Kelly's proposal is a version of the same error, applied to a different clause. Ruling credits out of target accounting in Clause 5.4 is not the standard failing to give credits a role. It is the standard, correctly, refusing to let a compensation claim disguise itself as target progress. The role credits should have, funding real mitigation for emissions a company has not eliminated yet, disclosed transparently, verified independently, never described as offsetting or neutrality, is a contribution claim. Nothing in Clause 5.4 stops ISO from spelling that out properly in the next draft. That is the fix worth pushing through the U.S. TAG. Not letting credits back into the target maths, but giving them a clearly defined, rigorously audited home as a responsibility mechanism, kept separate from the target itself.

Conclusion

It is also worth being honest about why this particular fix keeps resurfacing. High Tide Foundation's Carbon Policy and Markets Initiative sits inside a network of organisations, including a carbon-credit marketplace its founder co-founded, whose value proposition depends on credits keeping a direct role in target compliance rather than only funding mitigation alongside it. That does not make everything in Kelly's post wrong. Several of her points are right, and ISO should act on them.

But the specific request to count credits toward Scope 1–3 targets is not a science-based correction to an overcautious draft. It runs against a conclusion SBTi, the UN's own expert group, and, on paper, VCMI itself have all already reached, and it repeats a tension we think ISO has already got right elsewhere in this same standard. ISO does not need to relearn that lesson from scratch, and it should not unlearn it here either.

A full PDF version of this piece is available for download here .

The one thing we wish had made it into the SBTi CNZSv2

Tue, 30 Jun 2026 10:17:06 GMT

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The "Climate Finance Portfolio" of draft ISO14060

Mon, 22 Jun 2026 11:38:22 GMT

Ongoing Emissions Responsibility

Sat, 13 Jun 2026 10:58:48 GMT

What we are missing about the update to the Absolute Contraction Approach

Tue, 05 May 2026 09:19:39 GMT

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The ACA update and the OER framework

The Science Based Targets initiative (SBTi) has recently updated its Absolute Contraction Approach (ACA), one of the core methodologies used to set corporate emissions reduction targets. The ACA determines the rate at which companies are expected to reduce their absolute greenhouse gas emissions over time in order to align with global climate goals.

The update has generated considerable debate. Some commentators argue that it results in a less demanding near-term decarbonisation pathway for certain companies, while SBTi maintains that the change improves consistency, implementation and target-setting practicality without weakening long-term net-zero ambition. Regardless of where one stands in that debate, the discussion has focused almost entirely on the emissions reduction pathway itself.

What has received far less attention is how this adjustment interacts with another major innovation currently being introduced through the draft Corporate Net-Zero Standard (CNZS v2): the Ongoing Emissions Responsibility (OER) framework.

That interaction matters because the ACA determines how quickly emissions are reduced, while OER addresses how companies take responsibility for the emissions that remain while that transition is underway. Seen through that lens, the significance of the ACA update may extend beyond target-setting methodology and into the evolving architecture of corporate climate responsibility itself.

Historically, SBTi was largely interpreted as a reduction-only framework

Reduce emissions in line with a science-based pathway, and deal with the residual emissions that remain at the point of net-zero.

Whether that interpretation was entirely accurate is debatable. But it broadly reflected how the system was understood.

There is now a second mechanism doing real work: the Ongoing Emissions Responsibility (OER) framework.

Introduced in CNZS v2, OER operates alongside the emissions reduction pathway:

the ACA governs how fast emissions come down
OER governs how companies account for the emissions that remain while that is happening

That’s a structural change. Not a tweak.

What the ACA means in that context

The ACA adjustment looks, in practical terms, like a recalibration of the near-term trajectory. Less front-loaded, more spread over time. Whether you see that as pragmatic or problematic is a separate question.

But there is a consequence that deserves attention.

If the revised ACA results in a more gradual near-term decarbonisation pathway for some companies, then a larger volume of emissions will remain on the pathway during the transition period than would otherwise have been the case.

Those emissions are not outside the system. They are inside it.

Which raises a more interesting question than simply asking whether ambition has increased or decreased:

what happens to those emissions while they remain?

OER is designed to address that question

OER is often described as a voluntary add-on. That’s not how it functions in the draft.

It is the only component of the draft Corporate Net-Zero Standard that explicitly engages with the reality that companies will continue to emit while transitioning towards net-zero.

And crucially, it does that without relying on compensation logic.

That’s the real innovation.

Because it creates a category of action that is:

not abatement
not neutralisation
not offsetting

But still recognised as part of credible net zero action.

That space has never previously been formalised within the SBTi framework.

The interaction is not subtle

If pressure on the abatement pathway is eased in the near term, even modestly, the challenge does not disappear.

A larger volume of emissions remains on the pathway for longer. Those emissions become part of the transition journey rather than being eliminated immediately.

Within CNZS v2, OER is the only mechanism specifically designed to recognise responsibility for those emissions while they remain ongoing.

That is why the relationship between ACA and OER matters.

Why OER becomes more central, not less

This is not primarily a question of increasing demand in a narrow market sense. It’s more fundamental than that.

The ACA defines the pace of transition.

OER defines how responsibility is exercised during that transition.

If emissions remain on the pathway for longer, the importance of demonstrating responsibility for those emissions increases.

And OER is the only mechanism within the draft Standard designed for that purpose.

There’s also a political economy dimension

SBTi is trying to hold two things together:

maintaining scientific credibility
maintaining corporate participation

The ACA update speaks, at least in part, to the second objective.

OER helps protect the first.

Not because it substitutes for emissions reductions, but because it creates a framework through which companies can demonstrate responsibility for emissions that remain while reductions are still being delivered.

That is not an accidental feature of the architecture. It is one of its core design principles.

What much of the current commentary is missing

Most discussion of the ACA update treats ambition as though it resides entirely in the reduction pathway.

Under the previous paradigm, that was a reasonable assumption.

Under CNZS v2, it is no longer sufficient.

Corporate climate ambition is increasingly expressed through two separate questions:

how quickly emissions are reduced
and how seriously companies take responsibility for the emissions that remain

The first question is governed by ACA. The second is governed by OER. Focusing on one while ignoring the other only tells part of the story.

Where this leaves us

If the ACA adjustment results in a more gradual near-term trajectory for some companies, then more emissions may persist along the pathway for longer.

That’s not the end of the story. It’s the starting point.

Because the integrity of the system increasingly depends on whether those emissions are:

ignored
compensated
or addressed through credible forms of ongoing responsibility

OER is the mechanism that helps determines which of those outcomes dominates.

Bottom line

The ACA update does not, by itself, tell us whether the overall system has become stronger or weaker. What it does tell us is that the architecture of corporate climate action is evolving.

The reduction pathway remains essential.

But it is no longer the whole story.

As CNZS v2 develops, OER is becoming the mechanism that addresses a reality every net-zero pathway must confront:

emissions continue while the transition is underway.

climate-contributions-tim-clairs

Greenharbouring: a new way to protect offsetting and carbon neutral claims

﻿ A response to IETA’s safe harbour recommendation to governments

ISO 14060 and the NO vote: separating the fair critique from the unsupported fix

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The one thing we wish had made it into the SBTi CNZSv2

This is a subtitle for your new post

The "Climate Finance Portfolio" of draft ISO14060

Ongoing Emissions Responsibility

What we are missing about the update to the Absolute Contraction Approach

This is a subtitle for your new post

The ACA update and the OER framework

Historically, SBTi was largely interpreted as a reduction-only framework

What the ACA means in that context

OER is designed to address that question

The interaction is not subtle

Why OER becomes more central, not less

There’s also a political economy dimension

What much of the current commentary is missing

Where this leaves us

Bottom line

A response to IETA’s safe harbour recommendation to governments