Paris & Grever: Considerations for Carbon Reduction Initiatives
Pressures from shareholders and customers, as well as the goals of many governments to reduce carbon emissions below pre-industrial levels, are driving many companies to implement carbon reduction targets and initiatives to reduce emissions associated with the production and sale of their products. In 2020 alone, more than 1,000 companies pledged to reach net-zero greenhouse gas (GHG) emissions by a certain date in accordance with the United Nations Framework Convention on Climate Change’s (UNFCCC) Paris Agreement. To meet their self-imposed targets, in addition to making direct reductions at their own facilities, companies are increasingly utilizing market-based, voluntary carbon credits to offset their own emissions, which allows them to claim credits for emission reduction elsewhere to reach “net zero emissions” or similar targets. Indeed, article 6 of the Paris Agreement itself supports the development of a voluntary international mechanism by which countries that surpass their nationally determined GHG contributions can purchase emissions reductions from other nations.
