Regulatory Alerts2023-06-29
Voluntary Carbon Markets: Supervisory Issues
The Dutch Authority for the Financial Markets (AFM) issues this occasional paper to address supervisory concerns regarding the unregulated voluntary carbon markets (VCMs) and their growing link to the financial sector. The regulator highlights critical integrity risks concerning credit quality, market transparency, and the potential for companies to misuse offsets to undermine genuine emission reduction efforts in their net-zero claims. The AFM mandates that companies claiming net-zero status must maintain full transparency regarding their reduction pathways and limit the use of uncertain voluntary credits, while advocating for stronger legal frameworks within compliance markets to ensure effective climate action.
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