BBVA endorses TSVCM report on voluntary carbon market

18 / 08 / 2021

By Marwa Nassar - -

BBVA endorsed the Taskforce on Scaling Voluntary Carbon Market’s (TSVCM) new report which defines a roadmap for implementing a voluntary market that guarantees the quality and integrity of carbon credits. BBVA is the only Spanish bank that is a member of this working group.

Ricardo Laiseca, Head of BBVA’s Global Sustainability Office, pointed out that “the need to carry out actions and have tools to mobilize the capital that a low-carbon economy needs is becoming more urgent every day. This requires driving the transition of the entire economy.”

“All companies and financial institutions will have to adapt their own strategies and business models. BBVA is fully committed to reaching net-zero emissions by 2050. In addition to a clear reduction in emissions, a voluntary carbon market that is transparent as well as robust will also be needed. BBVA supports the work of the TSVCM in promoting a genuine market with high-operational integrity,” he explained.

Private voluntary carbon markets are a useful complement to public markets. A properly designed carbon price is a key element in any strategy for reducing emissions. This mechanism encourages both the reduction of energy consumption and the transition to cleaner energy sources. Setting a fair price for carbon emissions is a critical step in managing climate risk and driving the proper allocation of capital during our transition to a zero-emissions world.

As the number of companies committed to reducing their emissions grows, and investors’ demands for transparent and credible transition plans increase, the importance of a voluntary carbon market subject to optimal operating standards will become more evident. Meeting this growing demand will require a market 15 times larger than the current one, reports the TSVCM.

For this reason, the private sector must take the initiative by offering market solutions that add real value. Thus, carbon markets must play a key role to achieve the goals of the Paris Agreement by 2030 and carbon neutrality by 2050. In this sense, coordination between the public and private sectors is essential.

The TSVCM published the report after an in-depth public consultation in which more than 130 experts from around the world collaborated. The roadmap establishes legal principles to regulate the market and common criteria to ensure that carbon credits are genuine and represent real reductions in greenhouse gas emissions. Going forward the Group will work to form an independent Governance Body that is not dependent on the market.

It should be noted that the public consultation elicited strong support for the mandate and mission of the Governance Body, which include setting the legal principles to guide the market and the criteria for carbon credit integrity – the Core Carbon Principles (CCPs). Respondents also stressed the importance of the Governance Body in unifying what is currently a fragmented market and ensuring the quality and integrity of credits.

The Governance Body will foster the development of the voluntary global carbon market through standardization and high-quality thresholds that will drive market growth and will work independently of the Task Force. This way, the market will allow participants to trade with confidence and the assurance that their activity generates a positive impact for the planet and the world population, in addition to complementing their initiatives to cut greenhouse gas emissions.