Key Takeaways:

• Governments and stakeholders are moving quickly to clean up the voluntary carbon market and protect consumers from exaggerated or false claims of sustainability by companies.
• The California Legislature has passed two new climate disclosure bills that will require companies doing business in the State of California to make substantial annual disclosures regarding carbon emissions and climate risk.
• In order to comply with the new wave of “greenwashing” legislation, companies will need to develop comprehensive environmental claims management frameworks that emphasize both transparency and reliance on verified data.

As businesses across the globe strive to fulfill carbon-neutral and net-zero promises over the coming decades, the voluntary carbon market has emerged as a necessary resource to help businesses bridge the gap to sustainability. However, the absence of standardized protocols and rigorous verification procedures in this nascent market has led to claims of “greenwashing,” whereby businesses exploit the market’s lack of standards to make exaggerated or false claims regarding their carbon credit and offset portfolios. As a result, regulators and industry stakeholders have begun to focus their efforts on enhanced transparency and more robust reporting standards. Over the last month, these efforts have accelerated through the following:

SBTi Overhaul

The Science Based Targets Initiative (SBTi) was established by the United Nations Global Impact, World...

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