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The guidance provides an in-depth examination of the VCM, offering practical insights into responsible carbon credit procurement and opportunities to invest in innovative technological and nature-based solutions. As the VCM gains prominence, private markets are increasingly recognising its potential to complement robust emissions reduction strategies.

Key insights from the guidance:

• Private markets activity: The inaugural 2024 iCI VCM survey, published in November 2024, revealed nearly half of private market professionals are purchasing carbon credits, with 58% planning to increase their involvement in the coming year.
• Understanding the VCM: Additionally, the survey highlighted 75% of iCI members have an average to below-average understanding of the VCM. The guidance aims to simplify the complexities of the VCM, offering clear routes to engagement without introducing a new standard.
• Carbon credits and climate mitigation: High-quality carbon credits, when aligned with science-based emissions targets, can support the global transition to net-zero while delivering significant environmental and social co-benefits.
• Market growth: According to research by MSCI, the VCM, valued at approximately US $1.4 billion in 2024, is projected to grow to between US $7 billion and US $35 billion by 2030, and US $45 billion to US $250 billion by 2050.

Investment opportunities: The document outlines three key pathways for private market investors to engage with the VCM:

Investing in VCM companies

Direct investment in carbon projects

Investing in carbon funds

Nature-based investments: Beyond carbon credits, the guidance emphasises the growing interest in nature-focused investments, including nature-based solutions and nature tech. These approaches deliver financial returns whilst addressing pressing environmental and climate challenges.

Dr. Serge Younes, Global Head of Sustainability at Investindustrial and Chair of the iCI, states ''This guidance represents a critical resource for private equity firms looking to contribute meaningfully to the global net-zero transition. Voluntary carbon credits are a strategic pillar of any robust decarbonisation and net-zero strategy. They enable private equity firms to offset emissions for both their operations and those of their funds and portfolio companies. When used alongside real economy decarbonisation measures, VCMs are a powerful tool to drive long-term climate impact''.

Arjen Struijk, Global Business Line Lead for Climate and Nature at Anthesis, says: "We are proud to have collaborated with iCI to develop this guidance, which comes at a pivotal moment as more than half of the private markets' participants plan to expand their activities in the VCM this year. The guide equips private market firms with the tools and insights needed to navigate the complexities of the VCM and make responsible investments in high-quality carbon credits and innovative solutions. The VCM presents a unique opportunity to do good while driving good business, aligning financial success with environmental and social impact. By actively participating in shaping the future of carbon markets, private markets can drive progress towards net-zero goals, address the supply-demand gap for credits, and play a leading role in advancing sustainable climate action."

Bettina Reinboth, Director of Sustainability Initiatives at PRI, comments: "This guide is a practical resource designed to help private markets investors navigate the complex VCM landscape. It highlights the role of voluntary carbon credits in accelerating decarbonisation, providing actionable steps for investors to drive meaningful progress and achieve their own climate goals."

Nicolas Theis, VP, Responsible Investments at Bregal Investments and Co-Chair of the iCI VCM Working Group, comments "The guidance effectively demystifies the complexities of the voluntary carbon market without introducing new standards, which was essential given that approximately 75% of surveyed iCI members reported having only an average or below-average understanding of this sector. It is our hope that this framework will lay the groundwork for constructive discussions on how to responsibly engage with the voluntary carbon market, which might unlock the business and climate opportunities this space presents''.