Navigating Carbon Credits: Assessing Their Role in Cooperative Climate Initiatives and Corporate Climate Behaviour

Non-state actors play a critical role in achieving the goals of the Paris Agreement, with increasing numbers of actors committing to net zero targets. Many non-state actors rely on voluntary carbon credits to achieve their targets, but substantial concerns around over-crediting, social harm, and greenwashing have weakened their credibility. Cooperative climate initiatives have the potential to address such issues. However, it remains unclear how cooperative climate initiatives address carbon credits and how this affects the climate behaviour of initiative members. In this study, we first conducted a text analysis of 42 mitigation-focused cooperative climate initiatives to evaluate their guidance on purchasing carbon credits for offsetting claims. Our findings show that almost two thirds of initiatives provide some form of guidance. However, over 20% of initiatives promoting net zero targets fail to provide carbon credit guidance, indicating a substantial gap in guidance. Among those providing guidance, most emphasise the importance of prioritising emission reductions over carbon credit purchases, although clear definitions are typically not included. Guidance to ensure strong environmental and social integrity in carbon credits is also often lacking. In a second step, we use a recurrent neural network approach to assess how the companies’ climate behaviour has evolved after joining a cooperative climate initiative. This statistical model combines characteristics of the guidance provided by initiatives with carbon credit purchases, emissions, targets, and company data. Based on these findings, we encourage cooperative climate initiatives to provide more detailed and comprehensive guidance on purchasing carbon credits for offsetting claims, particularly addressing environmental and social integrity.