Published on December 27, 2023

Final Report of the Working Group for
Consideration of Voluntary Carbon Credit
Disclosure

GX League
The Working Group for
Consideration of Voluntary Carbon Credit Disclosure

1

Chapter I:

Aim and positioning of the report........................................... 4

1.1

The positioning of carbon credits in climate change countermeasures ..... 4

1.2

The current state of voluntary carbon credits....................................... 4

1.3

The positioning of this report ............................................................ 5

Chapter II:
2.1

Introduction to global trends and discussions .......................... 7

Various discussions on voluntary carbon credits ................................... 7

2.1.1

Discussion of the use of carbon credits and environmental claims ..... 7

2.1.2

Discussion of quality................................................................... 7

2.1.3

Discussion of the types of carbon credits ....................................... 8

2.1.4

Other discussion of carbon credits ................................................ 8

2.2

Various initiatives to expand the various voluntary credit markets........... 9

2.2.1

Voluntary initiatives by companies ................................................ 9

2.2.2

Initiatives for the use of carbon credits and environmental claims ..... 9

2.2.3

Initiatives for quality ................................................................ 10

2.2.4

State-led voluntary trading systems ........................................... 10

2.2.5

Disclosure standards for non-financial information concerning carbon
credits ................................................................................... 15

2.2.6

Use under mandatory systems................................................... 15

Chapter III: Examples of use of voluntary carbon credits by Japanesecompanies and needs and issues for market expansion ........... 18
3.1

Awareness of the needs and issues of Japanese companies ................. 18

3.1.1

The state of use of voluntary carbon credits................................. 18

3.1.2

Bottlenecks and solutions for the use of voluntary carbon credits .... 19

3.1.3

Information disclosure .............................................................. 22

3.1.4

Quality evaluation .................................................................... 24

3.1.5

Early stage investment ............................................................. 26

3.2

Case studies of proactive initiatives by Japanese companies................. 27

2

Chapter IV: Desirable initiatives for Japanese companies towards expansionof the voluntary carbon credit market and expectations of, andrecommendations for, stakeholders ....................................... 30
4.1

Desirable initiatives for Japanese companies ...................................... 30

4.1.1

Initiatives to broaden the scope of carbon credit use (common tobuyers and sellers) .................................................................. 30

4.1.2

Desirable initiatives for buyers ................................................... 32

4.1.3

Desirable initiatives for sellers .................................................... 32

4.2

Expectations of, and recommendations for, stakeholders ..................... 33

Chapter V:

Conclusion ......................................................................... 35

3

Chapter I:
1.1

Aim and positioning of the report

The positioning of carbon credits in climate change countermeasures

The reduction of greenhouse gas emissions to solve the problems of climatechange has been worked on as a global challenge not only at the national level, butalso at the corporate level. The reduction of greenhouse gas emissions can berealized through the introduction of renewable energy and energy-saving
equipment, avoiding deforestation, and planting trees. In response, initiatives basedon laws and regulations (e.g., carbon taxes, emissions trading schemes (ETS),
calculation, reporting and publication schemes (SHK schemes) and information
disclosure like the Energy Efficiency and Global Warming Countermeasures online
reporting System (EEGS) based on the Energy Conservation Act, the Act on
Promotion of Global Warming Countermeasures and the Act on Rational Use andAppropriate Management of Fluorocarbons) have been promoted both in Japan andoverseas to promote initiatives aimed at the reduction of greenhouse gases like theabove by companies and individuals, but on the other hand, carbon credit systems
have been used widely as voluntary initiatives not based on laws and regulations.
In Japan, the “Guidelines on Carbon Offsetting in Japan”1 were compiled in 2008,
and the use of carbon credits has been recognized as an initiative that can beworked on by society as a whole, not just companies, local authorities and thegovernment, as it is possible for the general public and consumers to participate
positively at their own initiative through product purchasing, participating in eventsand the like.
1.2

The current state of voluntary carbon credits

Voluntary carbon credits are carbon credits issued by private organizations andused by private companies to achieve their voluntary goals. In recent years, moves
aimed at achieving carbon neutrality by 2050 have accelerated globally, and haveprogressed not only at the national level but also at the corporate level. The use ofvoluntary carbon credits has received renewed recognition and attention as an
initiative as part of such moves, and both the amounts of carbon credits createdand used have been expanding. In 2022, Verra, the largest carbon credit standard,
issued 160 million tons of carbon credits for the year, while Gold Standard, the next
largest, issued 40 million tons of carbon credits.2
While the market is expanding, there are also new debate about the use ofvoluntary carbon credits and growing criticism of the reduction and absorption
effects of carbon credits. Carbon credits were used widely by companies, consumers,

4organizations, etc., as a means of offsetting emission activities initially in association
with the increased need for climate change countermeasures. However, as outlinedin the “Guidelines on Carbon Offsetting in Japan”1 and even by the IEMA, companies
and others are making efforts to grasp and reduce their own emissions, and somepeople have advocated the idea of using carbon credits to offset emissions only inareas where reductions are difficult, and there are also cases where systems andguidelines that restrict the use of carbon credits have been introduced.3 Moreover,in recent years, consideration has been given to restricting some reduction methods
using carbon credits that were previously carried out, such as the launch of
initiatives that more strongly recommend giving priority to direct efforts to actually
reduce emissions, as opposed to indirect efforts that consider the external reduction
effects of carbon credits as a reduction of the company’s own emissions.4,5
In addition, because of concerns over low-quality carbon credits and initiatives
that rely on carbon credits excessively, there have also been cases seen here andthere where the environmental claims made by companies are criticized as
greenwashing so it is becoming more difficult that voluntary credits effectively
demonstrate the role which they essentially play in the reduction and absorption ofgreenhouse gas emissions on a global basis.6
1.3

The positioning of this report

This report summarizes the discussions of the “Working Group for Considerationof Voluntary Carbon Credit Disclosure” (hereinafter referred to as “WG”) establishedwithin the GX League. The WG was launched based on the background describedabove. Voluntary carbon credits are an important mechanism as an initiative topromote prompt climate change countermeasure activities, but due to unclear
guidelines and various media reports, companies, who are users of the mechanism,
cannot use it with a sense of security.
In this report, we have summarized the current situation and future direction ofvoluntary carbon credits in Japan with the following structure:
Trends in Japan and overseas (Chapter II)
Opinions and initiatives of participating companies (Chapter III)
Recommendations deemed necessary based on the preceding chapters(Chapter IV)
In this report, in the light of changes in the external environment, we thoughtthat the presentation of (draft) guidelines for the disclosure of information on
voluntary carbon credits and their use, which was one of the initial aims of the WG,

5was premature, so we focused firstly on summarizing the current situation andfuture direction. We would like to make (draft) guidelines on information disclosureand use an issue for future consideration.
In this report, we cover voluntary carbon credits used for voluntary purposes. In
other words, separate to mandatory regulations accompanied by fines such ascarbon taxes and ETS, we advance discussions of the carbon credits used to achieve
voluntary aims such as net zero or carbon neutrality. We do focus on the means ofgenerating voluntary carbon credits (technology-derived or nature-derived) or theregion (domestic or overseas).
1.

Ministry of the Environment: February 2008, Guidelines on Carbon Offsettingin Japan

2.

Verra, Gold Standard Registry

3.

IEMA: December 2020, GHG Management Hierarchy updated for net-zero

4.

SBTi: April 2021, SBTi Corporate Net-Zero Standard

5.

VCMI: June 2023, Claims Code of Practice6.

Bloomberg: June 2023, A Greenwashing Lawsuit Against Delta Aims to Set aPrecedent

6Chapter II: Introduction to global trends and discussions
Against the backdrop of the rapid increase in interest in carbon credits since 2021,
various discussions have taken place on the use and quality of carbon credits, andinitiatives have been promoted based upon them towards the improvement of the
carbon credit market.
2.1

Various discussions on voluntary carbon credits
2.1.1

Discussion of the use of carbon credits and environmental claims

Private companies have made various environmental claims while reducing theiremissions to respond to the growing environmental awareness of consumers, suchas that they are aiming for “net-zero” or being “carbon neutral.” Voluntary carbon
credits have been used by private companies making such environmental claims
and as the grounds to support claims of “carbon neutral” products.
There have also been criticisms of the idea of carbon neutrality using carbon
credits. From the standpoint of opposing “carbon neutral” claims, the reasons for
opposing the claims include that they do not motivate the efforts to reduce
emissions that companies should essentially be carrying out, and that fossil fuelemissions are offset by carbon sinks such as forests that are not permanent and are
difficult to quantify.1 In addition, it is also pointed out that despite theabovementioned situation, “carbon neutrality” claims are presented to consumers
without any means of verification and influence consumer purchasing behavior.
2.1.2

Discussion of quality

The quality of carbon credits, centered on nature-derived credits, has become asubject of criticism. In January 2023, the Guardian published a sensational article
stating that more than 90% of nature-derived and emission avoidance-type carbon
credits (REDD+) were not contributing to climate change countermeasures.2
Referring to a number of academic papers, the article asserted that comparing thecase where there are projects that generate nature-derived credits with the casewithout them shows that they do not contribute to the reduction of emissions. The
subjects of assertions about quality are not limited to REDD+, and the risk of theexcessive issue of carbon credits has also been pointed out with regard to IFM(forest management)3 and Cookstove (highly efficient cooking utensils)4. In addition,according to the GHG Management Institute and the Stockholm Environment
Institute, discussion of quality also includes matters such as additionality andpermanence, not just the risk of excessive issue.5
The offset standards organization Verra, which has registered projects subject tothese criticisms, and others have refuted the article’s claims.6 In addition, Verra has

7been working on significant updates to its various nature-derived methodologies,
including REDD+, to enable use of the latest science, data and technology, and thesystem itself is being improved each time.7
2.1.3

Discussion of the types of carbon credits

Recently, there has also been discussion about which should be used either
emission reduction and avoidance credits or removal and absorption credits. The
reduction of cumulative emissions will be important for the achievement of the goalsof the Paris Agreement and this will require both rapid emission reduction andavoidance, and highly permanent removal technologies. Voluntary credits willcontribute as a mechanism that generates a cycle of funds to advance suchinitiatives promptly.
Under initiatives that emphasize removal credits, for example, the SBTi net zerostandard, removal credits are recognized as a means of neutralization.8 On the other
hand, it is also pointed out that reduction and avoidance technologies (renewableenergy, energy saving and the avoidance of deforestation), which are complete
technically, are not being implemented due to a lack of political drive.9 In addition,
while recognizing the value of removal technologies from the perspective of
permanence, an Information Note prepared by the United Nations Framework
Convention on Climate Change Secretariat identifies understanding of theassociated environmental and social risks and their small scale as issues.10 There
are also opinions that the emphasis on removal does not reflect the importance ofaddressing emissions in industries where reductions are difficult or protecting
ecosystems as a priority prior to recovery.11
2.1.4

Other discussion of carbon credits

Attempts are being made to develop various carbon credit projects around theworld in anticipation of the demand for voluntary carbon credits that will be requiredin the future. On the other hand, concerns have been raised that with the current
resource infrastructure, it will not be possible to realize sufficient supply in the future.
The African Carbon Markets Initiative (ACMI), which was launched aimed at
expanding the supply and demand of carbon credits in Africa, points to the need forfinancial instruments that realize the medium to long-term financing required forcarbon projects and advance market commitments (AMC), whereby multiple
companies commit to the purchase of large quantities of carbon credits from Africa
to promote project development.12 Further, it also points out that in order to achieve
such financing and commitments, it will be necessary to procure high-quality credits

8from Africa with transparent co-benefits for local societies and asset owners, which
is difficult at present, and is calling for measures.
In addition to the abovementioned lack of financing mechanisms, ACMI has also
raised the lack of clarity of national regulations (concerning rights over land andcarbon credit created in particular) as a factor restricting supply. In May 2023, thegovernment of Zimbabwe announced revenue sharing rules for carbon credit
projects implemented in the country.13 Its policy is for 50% of project revenue to
go to the government and 30% to local companies. This kind of regulatory
uncertainty makes it even more difficult to promote carbon credit projects that last
a number of decades.
2.2

Various initiatives to expand the various voluntary credit markets

Following the above discussions, various stakeholders are undertaking diverse
initiatives to increase the scale of voluntary carbon credits.
2.2.1

Voluntary initiatives by companies

Some companies have set clear guidelines for decarbonization targets and theuse of carbon credits towards their achievement, and are purchasing carbon credits
based upon them.
Aiming to be carbon negative by 2030, Microsoft is reducing emissions in thecompany’s value chain and purchased 1.4 million tons of removal-type carbon
credits in 2022.14 In addition, the company also discloses standards for the removaltype carbon credits it purchases.15 Other companies like Shell and Google are also
disclosing the same kind of information. The analysis results shows that the pace ofemission reductions by companies that use carbon credits in large quantities isdouble that of companies that do not use carbon credits so it is one approach forcompanies positive about decarbonization to contribute to decarbonization.16
Further, a research report on how companies think about climate action foundthat a majority of companies deem voluntary carbon markets a tool that willcomplement long-term decarbonization. On the other hand, issues for the further
use of carbon credits include clarification of where carbon revenues will be used,
understanding of the methodologies, support for quality assessment, thetransparency of claims and the simplification of markets.17
2.2.2

Initiatives for the use of carbon credits and environmental claims

The Voluntary Carbon Market Integrity Initiative (VCMI) has been preparing
guidance on the use of voluntary carbon credits (conditions for environmental claims,

9etc.). The VCMI published “The Provisional Claims Code of Practice”18 in June 2022
followed by “The Claims Code of Practice”19 in June 2023.
In addition, regulations on environmental claims made by companies are being
considered in various countries. In Europe, regulations on environmental claims arebeing discussed. The European Parliament is aiming to prohibit the use of generalenvironmental terms such as “environmentally-friendly,” “natural,” “biodegradable,”“climate neutral” and “eco” if they are unaccompanied by detailed evidence, andalso to prohibit environmental claims based solely on carbon credit schemes.20
In the United States, the Federal Trade Commission (FTC) Green Guides provide
guidance to avoid deceptive marketing to consumers. Public consultation is currently
underway for the first revision since 2012.21
2.2.3

Initiatives for quality

The International Civil Aviation Organization (ICAO) has been operating thecarbon offset scheme called the Carbon Offsetting and Reduction Scheme forInternational Aviation (CORSIA) since 2021 as a market mechanism approach,
aimed at “not allowing total greenhouse gas emissions to increase above 2020
levels.” This initiative has established the “CORSIA Emission Unit Eligibility Criteria”
and the standards that carbon credits should satisfy.22
On the other hand, quality has also been examined by the Integrity Council for
Voluntary Carbon Markets (ICVCM), which was established based on the studies of
the Taskforce on Scaling Voluntary Carbon Markets (TSVCM), which was initiated byMark Carney, former Governor of the Bank of England. The ICVCM released a draftof its “Core Carbon Principles”23 in July 2022. Subsequently, after public consultation,
the ICVCM released updated versions of its “Core Carbon Principles” in March andJuly 2023.24 These Core Carbon Principles present program-level (registry-level)
and category-level (project-level) guidance with regard to the selection of highquality offset standards. The content of these Core Carbon Principles refer to theabovementioned CORSIA criteria, with some items added.
2.2.4

State-led voluntary trading systems

In Scandinavia, the Nordic Dialogue on Voluntary Compensation was held
centered on the Nordic Council of Ministers, and in November 2022, the Nordic Codewas compiled to provide best practices from the Nordic perspective in the voluntary
use of carbon credits.25 The Nordic Dialogue on Voluntary Compensation wasestablished by Nordic stakeholders so that Scandinavian companies can respond
ably to the rapidly evolving guidance on voluntary carbon credits. In addition, it isalso another role of this dialogue to complement the guidance on international

10

voluntary compensation. The Nordic Code presents the following best practices forthe voluntary use of carbon credits (Table 1, Table 2).
1

Robust andThis means quantifying so-called scope 1, 2 and 3

comprehensive

emissions in line with recognized standards such as

quantification of

the ISO, GHG Protocol and SBTi, quantifying relevant

relevant emissions

emissions in line with recognized standards and having
calculations verified by a competent third party.

2

Reducing own

This requires the application of recognized guidance,

emissionssuch as the SBTi, standards and tools.

consistently with a
1.5°C-aligned
pathway3

Voluntary use ofBest practice encourages the use of carbon credits

high-integrity

related to a contribution to adaptation and an overall

carbon credits

reduction in global emissions. The Code’s criteria areconsistent with, inter alia, the CCQI and ICVCM’s draftCore Carbon Principles, as well as Article 6 of the Paris
Agreement.

4

Reporting ofThis means publicly communicating relevant

emissions,information in enough detail to allow stakeholders to

mitigation action

assess it against best practice criteria. This includes atand use of carbon

least direct and indirect emissions, mitigation targets,

credits

pathways and plans, annual changes in emissions,action and progress towards targets and pathways,
voluntary use of carbon credits, etc.

5

Ensuring theBest practice means making differentiated claims for

integrity of claims

the use of carbon credits that are a “national
mitigation contribution,” “offsetting” or “overall
mitigation in global emissions.”

Table 1. Nordic Code: Best Practice Requirements and Recommendations
Real

Real mitigation outcomes means that mitigation
outcomes shall be verified ex-post.

Additional

It can be demonstrated that mitigation activities
exceed what is required by host country law,regulation, or a legally binding mandate, and that the11activities would not be financially viable without therevenue from the sale of carbon credits.
Conservative Baseline

Mitigation outcomes shall be conservatively quantified
against a credible emissions baseline that is set below
the business-as-usual level of emissions.

Robust Monitoring &Reporting
Address Leakage

Mitigation outcomes shall be quantified using robust
monitoring methodologies.
Credit program measurement tools shall include
adjustments for carbon leakage.

Permanent

If activities may be reversed, the non-permanence of
mitigation outcomes shall be addressed in a robust
manner through the implementation of safeguards(e.g., insurance, buffer pools, liability rules).

Third-party validation

Mitigation activities shall be validated by a competentof activity

third party that the proposed activity design meetsrelevant criteria.

Third-party verificationof outcomes
Avoided Double
Counting
Local Stakeholder
Consultation

Mitigation outcomes shall be verified ex-post by anauthorized third party.
All double counting of mitigation outcomes shall be
avoided.
Mitigation activities shall include consultations withlocal stakeholders during the design andimplementation/monitoring phase.

Social andEnvironmental
Safeguard

An ex-ante assessment of the mitigation activities’
potential negative impacts shall be carried out, robustsocial and environmental safeguards as well as agrievance mechanism shall be put in place to mitigate,
manage and, where possible, avoid any negative
impacts, and related monitoring and reporting shall be
carried out throughout the activity’s lifetime.

Sustainable impact

Ex-ante assessment and ex-post monitoring andassessment

reporting of significant sustainable development
impacts shall be carried out.

Table 2. Nordic Code: Mitigation Outcome Criteria
The Energy Transition Accelerator is a mechanism to accelerate the transition toclean energy announced by the U.S. Department of State along with the Rockefeller

12Foundation and the Bezos Earth Foundation.26 It is a mechanism for projects that
accelerate the introduction of renewable energy and the transition away from fossil
fuel assets in developing countries, and the credits generated will be used ascontributions to voluntary targets or to help host countries achieve the NDCs (Table
3, Table 4).
Aim

To encourage the transition to clean energy in emerging anddeveloping countries

Eligible projects

Facilitate private investment under a comprehensive energy
transition strategy that will accelerate the deployment of
renewable energy and the retirement of fossil fuel assets indeveloping countries

Fund-raising

The ETA, which is operated at the national and local

mechanism

government level, generates verified greenhouse gas
emission reductions, which participating governments canuse to issue marketable carbon credits.

Use (draft)

To promote environmental conservation in the use of carbon
credits, only companies that promise to achieve net zero by2050 at the latest and set science-based interim targets areable to use these carbon credits.
Companies can use credits to support mitigation above
intermediate targets, to contribute to climate finance orother voluntary targets or to contribute to the achievementof the NDCs by the host country.
It is conceivable that some credits could be used to meet alimited portion of Scope 3 emissions within a company’s
short-term targets.

PeriodUntil 2030 (may be extended to 2035 depending on
circumstances)
Table 3. Overview of the Energy Transition Accelerator

1

Near-term

Promoting ambitious efforts by countries andcompanies to rapidly reduce greenhouse gas
emissions (GHGs) now, in this critical decade.

2

Inclusive

Advancing programs that deliver on broader
sustainable development goals, including expanded
energy access and poverty alleviation, and that are13

underpinned by strong transparency and social,environmental, and other just transition safeguards.
3

Comprehensive

Supporting ambitious power sector-wide energy
transition strategies that accelerate the deploymentof renewable power and the retirement of fossil fuelassets.

4High-integrity

Ensuring strong environmental integrity by offering
payments only for GHG reductions that are based on
and verified to a robust standard and by seeking
strong alignment with best practices for the pursuitof global net zero GHGs, including for private sector
net zero strategies and the use of carbon credits.

5

Supplemental

Incentivizing new private-sector climate finance for
mitigation and adaptation that augments, notsubstitutes for, other sources of public, private,multilateral, and philanthropic finance andcompanies’ continued investments in deep emissions
reductions within their own value chains.

6

Transitional

Helping, on a time-limited basis, to kickstart theenergy transition by rewarding accelerated power
sector decarbonization and by providing an option forcompanies to responsibly use the resulting verified
GHG emission reductions to reinforce science aligned
progress toward global net zero GHGs.

HIGH-LEVELCONSULTATIVE
GROUP

SBTi, UNEP, WBCSD, NRDC, MDB, CPI, WRI, BASCS,The Africa Climate Foundation, CEEW, Growald
Climate Fund, ICCCAD, UN, AIGCC, ClimateWorks
Foundation, SMI, IC-VCM, Environmental JusticeHealth Alliance, LSE, IESR

Table 4. Energy Transition Accelerator Guiding Principles

14

2.2.5Disclosure standards for non-financial information concerning
carbon credits

Initiatives that promote the disclosure of climate-related non-financial information
have been advanced following the publication of the TCFD recommendations, etc.
In Japan too, the revision of the Corporate Governance Code in 2021 encouraged
companies listed on the Prime Market to disclose information in line with the TCFD
framework, further accelerating this trend. The TCFD framework requires thedisclosure of information such as the amount of offsetting used to achieve targets.27
IFRS S2 Climate-related Disclosures, issued by the International Sustainability
Standards Board (ISSB) in June 2023, requires the disclosure of more in-depth
information than the TCFD framework.28 Companies must disclose the following
information when presenting plans to use carbon credits: 1) the extent to which theachievement of GHG emission reduction targets depends on credits; 2) the scheme(third-party scheme) by which the carbon credits will be certified; 3) the type ofcarbon credits (nature-derived or technology-derived, reduction or elimination);and 4) other factors required to understand the reliability and integrity of the carbon
credits (e.g., assumptions concerning persistence).
2.2.6

Use under mandatory systems

Some national and state governments have designed systems that recognize
voluntary carbon credits as a means of complying with mandatory systems.
Singapore introduced a carbon tax in 2019. The tax rate is S$5 per tonne for the
first five years (until 2023) and will increase to S$25 in 2024 and 2025, S$45 in
2026 and 2027, and then to S$50 to S$80 by 2030. From 2024, taxable emissions
can be offset using high-quality international carbon credits.29 The amount of carbon
credits that can be used is limited to 5% of taxable emissions to encouragecompanies to make efforts to reduce their own emissions. In addition, eligible
carbon credits that can be used under the Carbon Tax Scheme must be of highenvironmental integrity and comply with Article VI of the Paris Agreement.
Singapore plans to publish a list of eligible carbon credits in the second half of2023.30
Although not an example of the use of voluntary carbon credits, a similar systemdesign can be seen in the ETS introduced in Korea in 2015. If a Korean company
has a certain level of ownership or makes a certain level of contribution in
decarbonization, it is allowed to use credits issued by the Clean Development
Mechanism (CDM) limited to 5% of its subject emissions.31

15

* The WG is dealing with voluntary carbon credits that have no mandatory
constraints. The case of Singapore above has been described as an example of amethod of use of voluntary carbon credits.
1.

Carbon Market Watch: February 2022, Regulating corporate green claims andgreenwashing - policy recommendations

2.

Guardian: January 2023, Revealed: more than 90% of rainforest carbon offsets
by biggest certifier are worthless, analysis shows3.

B. Haya et al.: March 2023, Front.For.Glob.Change, 21 March 2023 Sec. Forest
Management Volume 6 - 2023

4.

A. Wiehl et al.: February 2023, (Pre-print) Cooking the books: Pervasive overcrediting from cookstoves offset methodologies

5.

GHG Management Institute & Stockholm Environment Institute: November
2019, Securing Climate Benefit - A Guide to Using Carbon Offsets

6.

Verra: January 2023, Verra Response to Guardian Article on Carbon Offsets

7.

Verra: October 2022, Revisions to VCS Avoiding Unplanned Deforestation
and/or Degradation Methodologies

8.

SBTi: April 2021, SBTi Corporate Net-Zero Standard

9.

UNEP: May 2021, State of Finance for Nature 2021

10. UNFCCC: May 2023, Information Note Removal activities under the Article 6.4
mechanism
11. IETA: March 2023, The Evolving Voluntary Carbon Market
12. Africa Carbon Markets initiative: October 2022, Roadmap Report Harnessing
carbon market for Africa
13. Bloomberg: May 2023, Zimbabwe to Take over Carbon Credit Trade, Void Past
Deals
14. Microsoft: March 2023, 2022 Environmental Sustainability Report
15. Microsoft:Carbon Dioxide Removal
16. Trove Research: June 2023, Corporate emission performance and the use ofcarbon credits
17. Conservation International & We Mean Business Coalition: January 2023,
Corporate Minds on Climate Action
18. VCMI: June 2022, Provisional Claims Code of Practice
19. VCMI: June 2023, Claims Code of Practice
20. European Parliament: May 2023, Parliament backs new rules for sustainable,
durable products and no greenwashing16

21. Federal Trade Commission: January 2023, Federal Trade Commission Extends
Public Comment Period on Potential Updates to its Green Guides for the Use ofEnvironmental Marketing Claims
22. ICAO: March 2019, CORSIA Emissions Unit Eligibility Criteria
23. ICVCM: July 2022, Core Carbon Principles
24. ICVCM: March 2023, Core Carbon Principles
25. Nordic Council of Ministers: November 2022, Harnessing voluntary carbon
markets for climate ambition
26. U.S. DEPARTMENT OF STATE: November 2022, U.S. Government andFoundations Announce New Public-Private Effort to Unlock Finance toAccelerate the Energy Transition
27. Taskforce on Climate-Related Financial Disclosure: October 2021, Guidance on
Metrics, Targets, and Transition Plans
28. ISSB: June 2023, IFRS S2 Climate-related Disclosures
29. National Climate Change Secretariat Singapore:Carbon Tax
30. National Environment Agency:Carbon Tax
31. International Carbon Action Partnership:Korean Emission Trading Scheme

17

Chapter III: Examples of use of voluntary carbon credits by Japanesecompanies and needs and issues for market expansion
3.1

Awareness of the needs and issues of Japanese companies

The WG held this discussion with five lead companies plus 46 member
companies.1 This WG is composed of members who are particularly interested involuntary carbon credits among the companies that support the GX League (679companies as of January 2023 when the WG was launched). We carried out aqualitative and quantitative questionnaire with these member companies to survey
the issues companies face in using voluntary carbon credits.
3.1.1

The state of use of voluntary carbon credits

Voluntary carbon credits are still a new area for Japanese companies. Many of thecompanies that participated in the WG are interested in the purchase and use ofvoluntary carbon credits in various roles, but only about one-third of the companies
have actually purchased any (reference: Q3, Q4).
Have not considered
11%
Purchased and using

33%

56%
Considering purchase and use[Q3] Please tell us the state of your company’s initiatives with voluntary carbon
credits as a consumer.
(Single answer)

18

4%
YES

50%

50%

39%
54%

96%
NO

50%

50%

Project
developer

Trader61%
46%

Consultant

Consumer

Have notyetconsidered[Q4] Please tell us the format of your company’s involvement in voluntary carbon
credits. (Multiple answers. If you have not yet purchased or considered purchasing
voluntary carbon credits and expect to be involved in some format, please enter
how you expect to be involved.)
3.1.2

Bottlenecks and solutions for the use of voluntary carbon credits

As described above, many companies are considering the purchase and use ofvoluntary carbon credits, but have been unable to do so, or have been unable to doso more positively. The number one reason raised was lack of clarity regarding theuse of voluntary carbon credits. The most common opinion pointed out the lack ofclarity of the international standards (ICVCM, VCMI, SBTi, etc.). In addition, a lot of
opinions pointed out the need for Japan to issue guidance as a country (an initiative
like the Nordic Code or ETA) (Q5).

19

11%

18%
50%

89%

82%

75%

We do notunderstand credit
quality

We are not eligible for theJapanese voluntary carbon
credit trading market

We are not eligible for theJapanese mandatory
market61%

50%

There is no guidance on
the use of voluntarycarbon credits in Japan

39%

The method of use ofcredits is unclear ininternational standards onvoluntary use

NO

89%

We are unable tounderstand information on
voluntary carbon credits
sufficiently (international
trends, information
disclosure, quality, etc.)

61%

25%
39%

We do not need tostart now

YES

11%

[Q5] Why is your company not currently using voluntary carbon credits ornegative about their use? Please give multiple answers from among the following.
While the WG focused on “the voluntary use of voluntary carbon credits,” 40% of
respondents raised “not being eligible for Japan’s mandatory market” as a reason
for being negative about the use of voluntary carbon credits. This means that acertain number of companies in Japan think the use of carbon credits is difficult
without mandatory restrictions.
As solutions to allow companies to use voluntary carbon credits more positively,
it is desirable that: 1) the methods of use of credits are clarified in international
standards; and 2) Japanese public organizations provide guidance on the use ofvoluntary carbon credits (Q6).

20

11%
32%

36%
54%

57%
YES

71%

89%
68%

64%
46%

43%

Trading markets that
select only high-quality
credits

Regular reports on
information on voluntarycarbon credits (international
trends, information
disclosure, quality, etc.)

Eligibility for the Japanesemandatory market

Eligibility for the Japanesevoluntary carbon credit
trading market

Guidance by public
institutions on the useof voluntary carbon
credits in Japan

29%

Clarification of the methodof use of credits ininternational standards onvoluntary useNO[Q6] Under what circumstances (or mechanisms) would you be more positive
about the use of voluntary carbon credits? Please select multiple responses fromthe following to answer on your minimum requirements.
(Multiple answers possible)
On the other hand, many respondents answered that recognizing the use ofvoluntary credits within the framework of the Act on Promotion of Global WarmingCountermeasures, GX-ETS, etc., would be important to promote the purchase ofvoluntary carbon credits within their companies. Alongside that, many respondents
indicated that recognizing the use of voluntary carbon credits in influential
international mechanisms such as SBTi and CDP would be important (Q7). It must
be noted that this questionnaire was aimed at companies particularly interested involuntary credits among GX League members.

21

11%

0%

4%

100%

96%

25%

YES

75%

79%

61%

68%

50%

89%

I don’t know

None

SEC

50%

ISSB

CDP

VCMI

21%

39%

32%

SBTi

25%

GX-ETSNO

Act on Promotion of
Global WarmingCountermeasures75%[Q7] Which of the following mechanisms has an impact on the use of voluntarycarbon credits at your company? (Multiple answers possible) (What kind of
mechanism would make it easier to persuade your company internally to use
voluntary carbon credits if it endorsed them?)
3.1.3

Information disclosure

Almost no cases could be seen where companies are using or creating voluntarycarbon credits for themselves (Q9, Q10). And only about half of those companies
disclose information on the state of their own use and creation of voluntary carbon
credits.

22

We only disclose limited
information that we are using
VCCs (whether or not VCCs areused. Response to CDP, etc.)
We use VCCs, but do
not disclose
information

We are using VCCs anddisclosing information including
project information

4%

7%

7%

81%

We do not use VCCs so
we do not disclose
information[Q9] Please tell us about your company’s disclosure of voluntary carbon credit
information as a consumer. (Single answer)

We create VCCs, but do
not disclose information

We create VCCs and disclose
project names and overviews

4%4%

93%

We have notcreated VCCs

[Q10] Please tell us about your company’s disclosure of voluntary carbon credit
information as a project developer.
(Single answer)
Few companies are motivated to disclose information voluntarily if there are nointernational rules or Japanese guidelines (Q11). Some opinions were also heard ofbeing negative towards information disclosure because it could increase the risk ofcriticism.

23

32%
64%

71%

68%

Rules with penalties
from the Japanese
government or public
institutions

29%

Guidelines from theJapanese government or
public institutions

36%

International rules
on information
disclosure

NO

75%

Introductions to bestpractices in information
disclosure

YES

25%

[Q11] Under what circumstances (or mechanisms) would you be positive about
information disclosure? Please select multiple responses from the following toanswer on your minimum requirements. (Multiple answers possible)
3.1.4

Quality evaluation

Slightly less than half of the companies in the WG recognized the need to evaluate
the quality of voluntary carbon credits, and about half of those companies answeredthat they actually carry out internal quality evaluations (Q12). The methods for
quality evaluations differed at each company, but there are a lot of cases where
they confirm the content of the registry of the credit standards, search on the web
for the projects or make inquiries with brokers. Although few in number, there arealso companies that have established their own quality evaluation standards (Q13).

24

YES

26%

NO

We do notrequire 56%
evaluation

19%[Q12] Does your company carry out independent evaluations of the quality ofvoluntary carbon credits? (Single answer) * If you implement additional quality
evaluations of certified credits, please answer YES.

50%

60%

30%

70%

We confirm withproject
developers

60%

40%

We confirm withbrokers

70%

50%

We search for
information about
projects on theinternet

80%

40%

We confirm
information stored incarbon credit
registries

30%

We prepare our own
quality standards
and perform
evaluation

NO

20%

We refer to thirdparty evaluation
reports(Sylvera, Bezero,
etc.)

YES

[Q13] (For respondents who answered YES in Q12) What methods do you use toevaluate credits? (Multiple answers)
There were opinions regarding evaluation of the quality of voluntary carbon
credits that there is not enough information to carry out quality evaluations(companies do not know how to access information). This kind of opinion was also
seen in the questionnaire, and requests for the organization and transmission of
information on international trends concerning quality by public institutions andthink tanks, the disclosure of information at an appropriate level of granularity bystandards bodies and project developers, and simple quality evaluation mechanisms
were raised.
25

3.1.5

Early stage investment

As mentioned above, 90% of companies feel that it is necessary to invest in
carbon credit projects at an early stage prior to the issue of credits (Q16). On theother hand, there are many barriers to investing in early stage projects, andconcerns have been raised about matters such as the price fluctuations of carbon
credits created, country risks and other project risks when investing in early stage
projects (Q18).
I cannot say either way

11%

89%
YES (necessary)[Q16] Do you think early stage investment in voluntary carbon credit projects isnecessary? (Single answer) (Do you think it is necessary to invest in a carbon
credit project itself prior to issue, rather than buying carbon credit units that havealready been issued?)
0%
22%

YES

78%

70%

78%
100%
78%

I don’t know

Not having a use

22%

Other project risks(Natural disasters,
community, etc.)

30%

Country risk

22%

Risk of price fluctuations

NO[Q18] What are your concerns when investing in early stage projects? (Multiple
answers)26

3.2

Case studies of proactive initiatives by Japanese companies

As mentioned above, although there are not many companies actually using
voluntary carbon credits at present, there are some that do. Below we introduce
case studies of Japanese companies working proactively on voluntary carbon credits
based on interviews with companies that participate in the WG and publishedmaterials.
Industry

Role in VCC

Examples of initiatives(Creation, distribution/
sales, use)

Manufac- Useturing• The company introduced and uses LNG offset with VCC to contribute to
the achievement of various SDGs such as the conservation of
biodiversity, not just climate change countermeasures.
• The company recognizes that the choice of carbon-neutral energy is an
important solution linked directly to climate change countermeasures,contributions to the realization of the SDGs and ESG corporate
management.
• As an initiative to ensure the quality of the VCCs, in addition to the basic
requirements of the bodies operating the VCCs such as Verra or Gold
Standard, the company has established its own requirements, such as
not using energy-saving-type credits, based on the trend in domestic
and international debate on dependence on easy credit, and has
strengthened governance to deal with greenwashing criticism.
• The company plans to use VCCs further in future to achieve theoffsetting of the greenhouse gases that are almost impossible to reduce,such as semiconductor business process gases, the Net-Zero target
under the SBTi standard and the company’s own internal targets.

Manufac- Useturing• The company is using carbon neutral LNG based on voluntary credits forthe natural gas it uses in its boilers. The company introduced this as aproactive initiative with understanding that voluntary credits cannot
currently be used under the Act on Promotion of Global WarmingCountermeasures or GHG Protocol.

Finance

Use• About 10% of the company’s CO2 emissions come from city gas used incomputer centers, etc. Although city gas is an energy source necessary
for private power generation, adjustment of peak power consumption,etc., CO2 emissions are unavoidable because the gas is burned on-site(on company premises).
• Because of that, on a project to contribute to global warming
countermeasures, the company adopted carbon neutral city gas with
attached credits created from projects that contribute to the solution ofenvironmental and social issues such as the conservation of biodiversity,
local employment and education, and the securing of water and energy.
• By taking in the idea of co-benefits, contributing to climate change andother issues simultaneously, and adopting carbon-neutral city gas with
attached credits issued under highly reliable certification standards, thecompany selected a measure that contributes indirectly to an equivalent27

reduction in CO2 emissions to that resulting from the use of gas incompany buildings.
FinanceCreation
Distribution/Sales• The company is considering investment in a forest fund. It is planning tolead market growth and development in sustainable investment bystimulating investment in the forest fund, and will contribute to thecreation and consolidation of the carbon credit market in Japan and theactivation of the global market through carbon credit trade.
• In addition, the company has also started a matching service that
introduces carbon credits provided by superior overseas companies toJapanese customers. By doing so, it will be able to provide carbon credits
in line with customer strategies for carbon neutrality, and enable thelong-term procurement of high-quality carbon credits certified by third
parties mainly from nature-derived projects involving renewable energy,etc.

Trading

Creation• The company is working in the VCC market on initiatives that contributecompany Distribution/Sales

to the expansion of the technology-based carbon removal market byconnecting buyers (VCC purchasing companies) specializing in highquality technology-based carbon removal VCCs with projects (VCC
creation companies) and guaranteeing a certain level of VCC demandand supply.
• For buyers, it will be possible to procure high-quality technology-based
VCCs with third-party certification in compliance with ICROA over thelong term.
• For projects, being able to acquire long-term commitments to VCC
revenue in advance will enable project development based on certain
future demand.

Trading

Creation• The company supports the acquisition of accreditation for, and sale of,company Distribution/Sales

credits using the Japan Blue Economy Association system to contributeto CO2 seabed fixation through seagrass bed creation and conservation
activities in coastal areas of Japan.
• It is currently considering the possibility of cooperation with companies
that have technologies in new fields such as CO2 mineralization and soil
storage of CO2 through regenerative agriculture, including the creation ofcarbon credits.
• While a unified definition of “high-quality credit” does not yet exist
internationally or in Japan, the company has established its own internal
standards for checking the risks associated with carbon credits and is
promoting project development and credit transactions.

Other

Distribution/Sales• The company combines remote sensing and causal inference technology
to analyze greenhouse gas reduction and absorption effects in forest andpeat-land afforestation and conservation projects, and provides
information on the quality and risks of individual projects.
• The quality of nature-derived VCCs has attracted considerable
international attention, and it is an area of major change, including therelease of related articles and papers, and the updating of international
standards. The company collects information globally in cooperation withoverseas developers and experts, and develops and updates solutions
continuously.

28• In addition to quality analysis and corporate depreciation analysis, thecompany aims to bring greater transparency to the voluntary carbon
market by providing a forum for project developers and investors tocommunicate mutually on a web platform released in 2023.

Table 5. Case studies of Japanese companies working proactively on the use ofvoluntary carbon credits, etc.
1.

Fiscal year 2022. Some companies that participated in the WG in fiscal year
2022 did not participate in the GX League in fiscal year 2023 so the number ofmember companies in fiscal year 2023 was 39.

29

Chapter IV: Desirable initiatives for Japanese companies towards
expansion of the voluntary carbon credit market andexpectations of, and recommendations for, stakeholders
The environment surrounding voluntary credits remains is constantly changing
and highly uncertain. On the other hand, even in such circumstances, Westerncompanies such as Microsoft and Volkswagen are contributing to the reduction of
global greenhouse gas emissions overall through the use of voluntary credits, andconnecting that to the improvement of their corporate value and competitiveness.
Reduction and absorption effects are recognized in Article 6 of the Paris
Agreement, and it is assumed that the need for both will increase.1 It is thoughtthat if Japanese companies use carbon credits strategically, increasing theirpresence in the global carbon credit market and promoting Japan-led rulemaking
will lead to the strengthening of their international competitiveness.
Although certain issues remain with regard to the reliability of voluntary carbon
credits, given the potential for future market expansion and the point that they are
an important means of emissions reduction in the hard-to-abate sector, there isconcern that focusing only on the issues and eliminating their use as an option may
induce other sorts of risk from the perspective of diversity of means.
Because of that, rather than waiting for issues to be resolved, we think it isimportant for each stakeholder to face up to those issues and overcome them on
their own.
4.1

Desirable initiatives for Japanese companies

We describe below the desirable initiatives by Japanese companies for the
expansion of the voluntary carbon credit market based on the standpoints of the“buyers” who use carbon credits and the “sellers” who create, sell and broker them.
4.1.1

Initiatives to broaden the scope of carbon credit use (common tobuyers and sellers)Issues are emerging at companies that intend to use carbon credits, such as lackof knowledge of carbon credits and difficulty in grasping the latest trends. The
Carbon Credit Report was issued by the Ministry of Economy, Trade and Industry inJune 2022, but as described in Chapters I and II, the environment surrounding
carbon credit has changed continuously since then, and it is necessary to update
the status as needed. In addition, discussion of carbon credits is led by Europe andthe United States, and access to up-to-date information and language stand in theway as barriers unique to Japanese companies. Because of that, the government30

and the private sector need to cooperate to establish the foundations that make iteasy for Japanese companies to access basic knowledge and the latest trends
related to carbon credits, and enables them to incorporate carbon credits into theirclimate change strategies and plans appropriately.
Further, as introduced in Chapter II, voluntary carbon credit transactions have notbeen established, and issues have been raised over price transparency andinformation symmetry. In addition to initiatives at each company themselves, it isthought that forming a market in which those involved in carbon credit transactions
can cooperate to reduce reputation risk so carbon credits can be traded withconfidence would be effective to promote the use of carbon credits at Japanesecompanies further. This would include improving the soundness of the market byraising its overall level through awareness-raising activities by business partners,
the government and local authorities, building ratings and evaluation systems andformulating transaction guidelines.
Further, carbon credits are also being used for the offsetting of products andservices, not just for corporate climate change strategies and plans. Products andservices offset using carbon credits could become a driver of credit use in corporate
climate change strategies. Evaluating the use of appropriately managed goods andservices in the same way as the direct use of credits by buyers would create demandand contribute to the further expansion of credit use.
As detailed in Chapter III, various initiatives are being carried out in Japan for
expansion of the voluntary carbon credit market. Taking into account international
discussions such as VCMI, SBTi and ICVCM, it would also be useful to share andaccumulate precedents and best practices in various business opportunities
including the use and creation of credits, information disclosure, and products andservices that use offsetting.
In addition, apart from the co-benefits of carbon credits and their contribution to
the SDGs, attention has also been paid recently not only to offsets within acompany’s own value chain, but also to contributions to reductions outside of thevalue chain based on the provision of funds through carbon credits.2,3 The
perspective of companies that handle credits discovering value aside from CO2
offsets and incorporating it into their business strategies, as well as the formationof a market environment in which that is evaluated appropriately, will also be
important.

31

4.1.2

Desirable initiatives for buyers

As detailed in Chapter II, discussions are being held on the quality of carbon
credits and environmental claims when they are used, while Chapter III discussed
concerns over the risk of greenwashing with regard to the use of carbon credits.
Using carbon credits with transparency is important to avoid the risk of being
criticized for carbon credits. Specifically, issues such as the disclosure of information
including the attributes of the carbon credits to be used, and the disclosure of thecompany’s way of thinking on their use can be raised.
With regard to the way of thinking on use, as introduced in Chapter I, the conceptof reducing one’s own emissions and offsetting using carbon credits is of reference.
Moreover, it is thought that it would be effective to use external expert knowledge
as necessary to consider and disclose externally the company’s own climate change
strategies and plans, not limited to carbon credits, and its policy on the use of carbon
credits.
Communication with the seller is also effective, such as requesting information
disclosure by the seller on the attributes of the carbon credit itself. In addition, it isalso thought that the registration and disclosure of a company’s use of credits ineach voluntary carbon credit system’s registry would be effective in improving
transparency and reliability with regard to the use of credits. By disclosing
information in such a registry, companies can contribute to the improvement of theregistry’s transparency.
4.1.3

Desirable initiatives for sellers

In light of the fact that companies that are sellers of carbon credits have relatively
more knowledge of carbon credits than companies that are buyers, it is desirable
that sellers play certain roles in the formation of a healthy carbon credit businessmarket in Japan, such as providing buyers with appropriate information about thecredits they provide, conducting awareness-raising activities on the use of carbon
credits and communicating with upstream companies as required. If companies
provide offset products and services, it is important they carry out highly reliable
and transparent product design, and they should consider the use of third-party
verification of the carbon footprint, etc., as required.
In addition, it is also conceivable that Japanese companies, including buyers aswell as sellers, will go to the credit-creation business side themselves through longterm off-take or project investment, etc. Through such initiatives, it is conceivablethat companies will become able to access required information on carbon credits
in timely fashion, and Japanese companies becoming able to manage carbon credit

32risks proactively could contribute to the improvement of the reliability of carbon
credits and be effective in the formation of a healthy carbon credit market in Japan.
4.2

Expectations of, and recommendations for, stakeholders

To this point, this report has been organized around the use of carbon credits at
companies as one initiative for carbon neutrality (Chapter I), the various guidance
and regulations that have started to be issued overseas (Chapter II), the awarenessof issues at companies participating in this WG (Chapter III), and a number of casestudies of the proactive use of carbon credits at Japanese companies.
The results of the questionnaire show that whether or not it is possible to use
voluntary carbon credits under a public system (GX-ETS or the Act on Promotion of
Global Warming Countermeasures) is an important factor in the use of voluntarycarbon credits for many companies that participate in the WG. It is conceivable that
evaluating companies that are working on the reduction of their own emissions andrecognizing companies that are also working on the use of carbon credits underpublic systems would be effective for the expansion of use of carbon credits. It is
expected that this point will be discussed by another working group in future.
On the other hand, although the voluntary use of carbon credits, the scope of thisWG, may also have to be worked on as an effort by companies themselves, thesurrounding environment is changing every day, and as mentioned in Chapter III,the risk of greenwashing is also a concern from various perspectives. Because ofthis, further expansion of the voluntary use of carbon credits by the efforts ofcompanies alone will not be easy.
The significance of the promotion of carbon credits was described in Chapter I,
but it can also be said to be important for the Japanese economy from theperspective of international competitiveness that Japanese companies lead theworld in initiatives to reduce emissions on a global scale through the creation anduse of carbon credits, and create a virtuous cycle for the environment and theeconomy. The following is raised as one of the initiatives that participatingcompanies are called to do by the GX League: “Contribute to reductions throughnew products and services by working on the creation of progressive innovation
yourself and in collaboration with players working on innovation. In addition, expand
the green market by introducing carbon offset products based on credits, etc., tothe market.” It is thought that consideration of: [1] mechanisms that support andevaluate the voluntary use of carbon credits, and ratings and evaluation systems
based on the actual situation in Japan and international debate (mechanisms for33

people involved in carbon credit transactions to cooperate to give some sort ofevaluation or soundness regarding the voluntary use of carbon credits); [2] financial
support and guarantee mechanisms so that further support is given to the creationof carbon credits (for example, a guarantee mechanism for situations involving therisk that the creation of carbon credits will become difficult due to policy andinstitutional changes in other countries); and [3] a forum where the public andprivate sectors can collaborate to share information and consider initiatives (forexample, a forum to provide regular updates on global trends and discussions as
described in this report or a forum for communicating the initiatives of individualcompanies, etc.) would also be effective from now on.
1.

BloombergNEF: January 2023, Five Need-to-Knows About the Future of
Voluntary Carbon Offset Markets

2.

Ministry of Economy, Trade and Industry: December 2021, Issues Related to
Carbon Credits

3.

SBTi: June 2023, “The SBTi launches six-week public consultation on Beyond
Value Chain Mitigation”

4.

Taskforce on Nature Markets: April 2023, “Biodiversity Credit Markets”

34Chapter V: Conclusion
In this report, we have summarized the current state and future direction ofvoluntary carbon credits in Japan through review meetings and interviews,
organized into trends in Japan and overseas (Chapter II), the opinions and initiativesof participating companies (Chapter III), and the recommendations thought
necessary based on the foregoing (Chapter IV).
The environment surrounding carbon credits is progressing day-by-day, and it has
become clear that issues are emerging at companies that intend to use carbon
credits, such as lack of knowledge of carbon credits and difficulty in grasping thelatest trends. In response, we have provided recommendations for buyers andsellers of carbon credits and other related stakeholders in Chapter IV of this report.
The external environment has also changed rapidly during the preparation of thisreport, with tailwind and headwind events for voluntary carbon credits having beenreported. In view of such circumstances, in addition to updating the informationand discussions covered in this report regularly from now on, it is desirable that
there is also consideration of guidelines that will lead to more specific actions forJapanese companies (for example, guidelines on information disclosure on
voluntary carbon credits and their use, one of the original objectives of this WG).
We expect that these continued initiatives will promote the appropriate use ofvoluntary carbon credits for the realization of carbon neutrality in Japan.

35This deliverable was considered by the “Working Group for Considerationof Voluntary Carbon Credit Disclosure,” formed as part of initiatives forthe formation of market rules by the GX League and composed of thefollowingmembers,andpreparedbytheWorking

Group

for

Consideration of Voluntary Carbon Credit Disclosure after asking for
opinions from the companies that participate in the GX League.
sustainacraft Inc., Sumitomo Corporation, Tokio Marine & Nichido Fire Insurance Co.,
Ltd., Tokyo Gas Co., Ltd., MUFG Bank, Ltd., Carbon Free Consulting Corporation,
XENCE LLC, blue dot green Inc., Mitsubishi Corporation, Overseas Environmental
Cooperation Center, Japan (OECC), Mitsubishi Research Institute, Inc., Nippon Life
Insurance Company, Fujitsu Ltd., Mitsubishi HC Capital Inc., Toshiba Corporation,
Zeroboard Inc., EF-ON Inc., Mizuho Financial Group, Inc., Daiwa Securities Group
Inc., Kawasaki Heavy Industries, Ltd., Toho Gas Co., Ltd., Sojitz Corporation, Wood
Life Company, Inc., Toyota Tsusho Corporation, DIGITAL GRID Corporation, Nomura
Holdings, Inc., NTT Communications Corporation (participating as “Nippon
Telegraph and Telephone Corporation” from fiscal year 2023), SDG Impact Japan
Inc., Sumitomo Mitsui Trust Bank, Limited, Mitsui Chemicals, Inc., Sompo Japan
Insurance Inc., Altalena Co.,Ltd., Deloitte Tohmatsu Group, Sumitomo Forestry Co.,
Ltd., NEC Corporation, The Norinchukin Bank, MS&AD Insurance Group Holdings,
Inc., NTT Data Group Corporation (participating as “Nippon Telegraph andTelephone Corporation” from fiscal year 2023), ITOCHU Corporation, LIXIL
Corporation, Chiyoda Corporation, Funai Soken Holdings Inc., Shimizu Corporation,
and Asuene Inc.

36