Carbon Credits and Green Reporting: CDP, GRI and SBTi Standards

As the effects of the climate crisis reshape the dynamics of the business world on a global scale, sustainability is no longer an option for organisations, but a legal and strategic necessity. Companies can transparently present their environmental impacts to stakeholders in line with the ‘Net Zero’ vision through green reporting (sustainability reporting).

One of the most powerful strategic tools for organisations in these reporting processes is high-quality carbon credits. However, reporting carbon credits in accordance with international standards requires expertise. As the Green Gold Foundation, in this guide, we detail how carbon offsetting projects can be integrated with the standards of the world's most prestigious reporting frameworks: CDP, GRI and SBTi.

The Place of Carbon Credits in Green Reporting Frameworks

Whereas in the past companies were evaluated solely on their financial statements, today Environmental, Social and Governance (ESG) performance is an integral part of corporate value. Carbon credits support the ‘Environmental’ (E) aspect of this performance. However, each standard has strict rules governing the use of carbon credits to prevent ‘greenwashing’.

1. CDP (Carbon Disclosure Project) and Climate Leadership

CDP is the world's largest transparency platform where companies report their environmental impacts to investors. CDP expects companies to first reduce their own Scope 1, 2, and 3 emissions. However, in CDP's climate change survey, investments in high-quality carbon credits are a powerful tool to demonstrate an organisation's leadership vision in climate action.

In CDP reporting, companies can improve their assessment scores and demonstrate their environmental sensitivity by transparently declaring the type of carbon credits they purchase (e.g., nature-based REDD+ projects), the quantity, and the certification standards (VCS, Gold Standard, etc.).

2. Transparent Communication with GRI (Global Reporting Initiative)

GRI is the most widely used sustainability reporting standard worldwide. GRI's standards on emissions (particularly GRI 305) focus on transparency.

According to GRI standards, a company's gross greenhouse gas emissions and offsets made using carbon credits must be reported separately. In other words, instead of saying ‘We are carbon neutral,’ the company should say, ‘We produced this much emissions, reduced this much through our internal processes, and offset the remainder with high-quality carbon credits.’ Green Gold Foundation's transparent, traceable and verified carbon credits perfectly meet this transparency requirement in companies' GRI reports.

3. SBTi (Science Based Targets initiative)

SBTi is today's most rigorous and respected net-zero framework. The SBTi's ‘Corporate Net Zero Standard’ focuses on direct emissions reduction (typically 90-95% absolute reduction in Scope 1, 2 and 3). So where do carbon credits stand in the SBTi?

The SBTi does not accept carbon credits as a substitute for direct emissions reduction.

However, it strongly encourages and mandates carbon credits in two critical areas:

• Beyond Value Chain Mitigation (BVCM): While companies strive to decarbonise their own value chains, they must also finance external climate projects to limit global warming to 1.5°C. Carbon credits from forest conservation (REDD+) projects are an excellent tool for BVCM.

• Neutralisation of Remaining Emissions: After reducing all emissions by 90-95%, the company must use high-quality credits that capture or sequester carbon from the atmosphere (afforestation, forest conservation) to offset the final 5-10% of ‘residual emissions’ that are technically impossible to eliminate.

Green Gold Foundation: Reliable and Standard-Compliant Carbon Offsetting

All international standards (CDP, GRI, SBTi) converge at a single point: The quality and transparency of carbon credits.

As the Green Gold Foundation, we offer the business world the ‘high-quality, nature-based solutions’ required by reporting standards through our mega REDD+ project in the Nordubanga region of the Democratic Republic of Congo:

• 1.3 Million Hectares of Impact: By protecting this vast forest area, we prevent deforestation by 30% annually. The carbon credits generated are fully aligned with the SBTi's BVCM (Beyond the Value Chain Mitigation) targets.

• Social and Environmental Co-benefits: Our credits are not just about carbon tonnage. The education, sustainable agriculture support and community empowerment programmes provided to local people in the region directly enrich the ‘Social’ (S) metrics in your GRI reporting.

• Traceability and Transparency: Credits earned through our Green Gold Wings, Wheels and Stay programmes are internationally audited and backed by robust data that will demonstrate your climate leadership in your CDP surveys.

CDP, GRI and SBTi Standards and Green Reporting Topic Summary

The Relationship Between Carbon Credits and Green Reporting: Carbon credits are measurable financing tools that companies use to achieve their Net Zero and ESG (Environmental, Social, and Governance) goals. Global frameworks such as CDP, GRI, and SBTi link the use of these credits to specific transparency and quality rules.

CDP (Carbon Disclosure Project) Approach: Carbon credit purchases are reported as a step towards ‘climate leadership’ that supports the company's emission reduction strategies and positively impacts the company's transparency score.

GRI (Global Reporting Initiative) Approach: Companies' gross emissions and purchased carbon credits must be reported as completely separate and transparent items (GRI 305), without being mixed together.

SBTi (Science Based Targets) Approach: Companies must reduce their internal emissions (Scopes 1-2-3); however, high-quality carbon credits are a mandatory/encouraged step for ‘Beyond the Value Chain Mitigation (BVCM)’ and neutralising the remaining 5-10% residual emissions.

Green Gold Foundation Solution: Protecting 1.3 million hectares of forest in Congo, the foundation provides companies with high-quality REDD+ carbon credits that are compatible with CDP, GRI and SBTi reporting.

Frequently Asked Questions (FAQ)

1. Can I obtain SBTi approval by simply purchasing carbon credits from the Green Gold Foundation without reducing my emissions at all? No. According to SBTi rules, companies must first reduce their Scope 1, 2, and 3 emissions within their own operations in line with scientific targets (typically by 90-95%) before using carbon credits. Carbon credits are used concurrently with this process for ‘Beyond the Value Chain Mitigation’ (BVCM) and to neutralise residual emissions at the end.

2. How should I indicate that I have purchased carbon credits in my CDP reporting? The CDP questionnaire has specific fields for carbon credits in the emissions reduction initiatives and targets section. Here, you should transparently enter the amount of credits you have purchased from the Green Gold Foundation, their type (e.g., forest conservation/REDD+), the verification standard, and the project details.

3. How do the Green Gold Foundation's forest conservation projects contribute to the Social (S) criteria in GRI reporting? Our foundation does not just protect trees; through our ‘Community Empowerment’ approach, we involve local communities in planning processes and provide them with sustainable economic opportunities. This social impact can be documented in your GRI reporting as your contribution to the development of local communities.

4. What is BVCM (Beyond the Value Chain Mitigation) and why is it necessary for my company? BVCM refers to investments your company makes beyond its own operations and value chain to mitigate the global climate crisis. Achieving net-zero emissions from your own operations could take decades; during this time, funding forest conservation projects by organisations like the Green Gold Foundation to offset atmospheric carbon is a necessity for climate responsibility and leadership.

Would you like to learn more about verified, high-social-impact carbon credits that will support your company's green reporting processes (CDP, GRI, SBTi)? Contact us to plan customised sustainability integrations for your organisation.