360° Impact Portfolio
Standards Framework / DEFRA Good Quality Criteria 2019 UK regulatory

The UK regulatory baseline. Necessary, but no longer sufficient.

DEFRA’s Good Quality criteria for carbon offsetting, set out on page 115 of the Environmental Reporting Guidance (2019), are the domestic UK regulatory reference point for any large company disclosing offsets under the Streamlined Energy and Carbon Reporting framework. They define the minimum standard the UK government expects offsets to meet. What they do not do — because they predate the modern voluntary carbon market integrity architecture by four years — is address the corresponding adjustments question, the government double-counting problem, the VCMI claim tier structure, or the ISO 14068-1 documentation requirements that sophisticated stakeholders now expect. Understanding DEFRA is the starting point. Understanding where it stops is equally important.

Good Quality criteria for carbon offsets used in SECR reporting — DEFRA Environmental Reporting Guidance p.115 7 criteria
Year the Environmental Reporting Guidance containing the Good Quality criteria was published 2019
Years before ICVCM Core Carbon Principles were published — the modern integrity framework DEFRA predates 4 years
SECR applies to UK companies with more than 250 employees, or turnover above £36m, or balance sheet above £18m 250+ staff
Sits alongside
SECR Streamlined Energy & Carbon Reporting
ICVCM CCPs Modern successor to DEFRA’s criteria
SBTi Above and Beyond
ISO 14068-1 §11.2 criteria extend Good Quality
VCMI Claims Code Claim language framework
Companies Act 2006 SECR statutory basis
Context · 01

What the DEFRA Good Quality criteria are, and who they apply to.

The Department for Environment, Food and Rural Affairs publishes Environmental Reporting Guidance for large UK organisations subject to mandatory carbon reporting under the Companies Act 2006, as implemented through the Streamlined Energy and Carbon Reporting regulations. Section 11.3 of the guidance, on page 115, sets out the conditions under which an organisation may reduce its reported net emissions figure by reference to external GHG reduction activities — in practice, by purchasing and retiring carbon credits.

The criteria apply to any SECR-reporting organisation that wishes to disclose a net CO₂e figure below its gross emissions figure on the basis of offset purchases. They are not guidance for organisations making voluntary carbon neutrality claims under ISO 14068-1 or VCMI contribution claims — they are the specific conditions under which SECR gross-to-net reconciliation is considered valid. A SECR reporter that discloses a net figure without satisfying the Good Quality criteria is not in conformance with the guidance, regardless of the quality of the credits purchased.

The guidance was published in 2019, before the ICVCM Core Carbon Principles, before the VCMI Claims Code, before ISO 14068-1, and before the Article 6 corresponding adjustments mechanism became materially relevant to voluntary buyers. The seven Good Quality criteria are substantively aligned with the emissions impact principles of the ICVCM CCPs and the credit criteria of ISO 14068-1 §11.2. But they are less detailed, less current, and do not address several dimensions of credit quality and claim integrity that have become important since 2019.

For a UK organisation reporting under SECR, satisfying the Good Quality criteria is the mandatory domestic floor. Satisfying the modern frameworks is the ceiling that sophisticated stakeholders, investors, and assurance providers will increasingly look for above it.

Good Quality Criteria · 02

The seven criteria. What each requires and how it maps to modern frameworks.

The seven Good Quality criteria are set out in the DEFRA Environmental Reporting Guidance, p.115. Each maps directly to one or more requirements in the ICVCM Core Carbon Principles and ISO 14068-1 §11.2. Satisfying the modern frameworks satisfies DEFRA; the reverse is not always true.

1 — Additionality

Projects must demonstrate that they have produced a saving in carbon that would not have happened otherwise — the project could not take place without the carbon finance from selling credits. The project must not be required by legislation or to demonstrate compliance against legally binding targets. This should be demonstrated via a project methodology developed by a recognised body.

Maps to: ICVCM CCP 5 — Additionality · ISO 14068-1 §11.2(b)

2 — Avoiding leakage

The project must demonstrate that it has not caused an increase in carbon emissions elsewhere. Leakage is when the carbon saving made at a project location or time increases emissions elsewhere. An assessment must be made of any effects from the project whether upstream or downstream. This must be taken into account in determining the total emissions that can be sold from that project.

Maps to: ICVCM CCP 5 — Additionality (leakage component) · ISO 14068-1 §11.3(g)

3 — Permanence

If the project could be impermanent — for example, forestry projects are at risk of disease or fire — this must be addressed by the project developer or offset provider. Projects with a risk of carbon loss should undertake a risk assessment and identify actions to minimise and compensate for loss.

Maps to: ICVCM CCP 6 — Permanence · ISO 14068-1 §11.2(d)

4 — Validation and verification

The project must receive independent verification. The verifier must be an accredited and recognised independent third party. Purchasers should ensure that robust, independent validation and verification procedures were in place to check projects were implemented according to the methodology (validation) and subsequently monitored to ensure that emission reductions were properly measured (verification).

Maps to: ICVCM CCP 4 — Independent third-party validation and verification · ISO 14068-1 §11.3(f)

5 — Timing

Carbon credits should be ex-post: they must only have been issued from the project after the emissions reduction has taken place. Credits issued against projected or forecast reductions do not satisfy this criterion.

Maps to: ICVCM CCP 7 — Robust Quantification (ex-post) · ISO 14068-1 §11.2 (ex-post rule)

6 — Avoiding double counting

A registry must be used to register, track, and permanently cancel credits to avoid double counting or double selling. The project must not be double counted against another policy or mandatory targets.

Maps to: ICVCM CCP 8 — No Double Counting · ISO 14068-1 §11.3(g)

7 — Transparency

Credits should be supported by publicly-available information on a registry to set out the underlying projects (when they were considered approved and implemented), the quantification methodology applied, independent validation and verification procedures, project documentation, proof of credit ownership, and date of retirement of credits.

Maps to: ICVCM CCP 3 — Transparency · ISO 14068-1 §11.3(a) & §11.4(e)

SECR Disclosure · 03

What SECR requires you to disclose for non-Kyoto credits.

Gold Standard and Verra are voluntary market programmes — not Kyoto-mechanism programmes. When a SECR-reporting organisation uses non-Kyoto credits to reduce its net CO₂e figure, the guidance specifies a defined minimum disclosure set. These requirements are not optional.

The guidance requires, as a minimum, the following information to be disclosed for non-Kyoto carbon credits used in SECR reporting:

  1. Item 1

    Reduction in tCO₂e per year

    The volume of emissions reduced through the offset purchase, expressed in tonnes of CO₂e for the reporting year. This is the figure that reconciles the gross and net figures in the SECR disclosure.

  2. Item 2

    Name of supplier

    The name of the organisation that supplied the carbon credits. For 360° Impact Portfolio transactions, this is disclosed in the disclosure pack transaction summary.

  3. Item 3

    Hyperlink to project documentation

    A publicly accessible link to the project documentation on the relevant registry. For Gold Standard and Verra, both registries publish full project documentation including methodology, validation, and verification reports. The disclosure pack includes the direct registry project link.

  4. Item 4

    Quantification methodology developer

    Details of who developed the quantification methodology used by the project. For Gold Standard and Verra projects, the methodology is published on the registry alongside the project documentation and is referenced in the disclosure pack.

  1. Item 5

    How the project was validated and verified

    A description of the validation and verification process. For CCP-Approved programmes, this is documented in the project’s validation and verification reports, publicly available on the registry. The disclosure pack references the applicable VVB (validation and verification body) and standard.

  2. Item 6

    Date of retirement from the registry

    The date on which the credits were retired — permanently cancelled — on the relevant registry. This corresponds to the §11.4(e) retirement date in the ISO 14068-1 documentation requirements. Provided in the retirement certificate in the disclosure pack.

  3. Item 7

    Hyperlink to proof of retirement

    A direct link to the retirement record on the Gold Standard Impact Registry or Verra Registry confirming the credits have been permanently cancelled. Provided in the disclosure pack alongside the serial numbers of retired credits.

  4. Item 8

    How the other Good Quality criteria were met

    A statement of how each of the seven Good Quality criteria was satisfied. The disclosure pack includes a dedicated DEFRA Good Quality compliance note addressing each criterion by reference to the CCP-Approved programme status of Gold Standard and Verra and the specific project documentation.

Limitations · 04

What the 2019 guidance does not address.

The Good Quality criteria were written in 2019. The voluntary carbon market has changed substantially since then. A SECR reporter that satisfies only the Good Quality criteria is exposed on several fronts that did not exist — or were not material — when the guidance was written.

Government double counting — not addressed

DEFRA criterion 6 requires a registry to prevent double selling between buyers. It does not address double counting between a buyer and the host country government of the project — the problem where both the buyer claims the reduction and the host country counts it towards its nationally determined contribution. This was not a material concern in 2019, when NDC accounting was immature. In 2024, as host countries increasingly account for transferred mitigation outcomes, it is a real and growing exposure for voluntary buyers. ISO 14068-1 §11.1 notes corresponding adjustments as the mechanism for resolving this. DEFRA is silent on it.

Vintage limit — not specified

DEFRA does not specify a vintage limit. ISO 14068-1 §11.2 sets a hard five-year vintage limit: credits with a vintage end date more than five years before the start of the claiming period may not be used. An organisation sourcing old credits — from a seller clearing stockpiled inventory from 2015 or 2016, for example — satisfies DEFRA but not ISO 14068-1. As ISO 14068-1 becomes the expected disclosure standard, vintage compliance becomes a quality signal that DEFRA alone does not provide.

Retirement deadline — not specified

DEFRA requires retirement, and requires proof of retirement, but does not specify a deadline. ISO 14068-1 §11.2 requires retirement within 12 months of the end of the reporting period. VCMI requires credits to be retired in the claiming year. An organisation that purchases credits in a reporting year but retires them two or three years later satisfies DEFRA but not the modern frameworks.

Claim language — not addressed

DEFRA governs what an organisation must disclose in its SECR report. It does not govern what the organisation may say publicly in other contexts — its sustainability report, its website, its investor disclosures, or its marketing materials. The VCMI Claims Code fills this gap. An organisation that satisfies DEFRA but makes informal public claims outside the VCMI framework is exposed to greenwashing challenge in those other contexts.

SDG contribution — not required

DEFRA does not require credits to be associated with identifiable sustainable development co-benefits. ISO 14068-1 §11.3(c) requires crediting programmes to identify SDG contributions for each project. VCMI’s disclosure requirements include SDG co-benefit reporting. For organisations whose stakeholders expect a contribution narrative that goes beyond the carbon number, DEFRA compliance alone does not provide the evidence base.

Sourcing Process · 05

How the sourcing process and disclosure pack address the DEFRA requirements.

The DEFRA Good Quality criteria are satisfied as a by-product of the sourcing process, which is structured around the more demanding ICVCM CCPs and ISO 14068-1 §11.2 requirements. The non-Kyoto SECR disclosure items are addressed as a dedicated section of the disclosure pack.

Good Quality compliance — how each criterion is satisfied

Additionality — Credits sourced from Gold Standard, Verra projects, where additionality is assessed against approved methodologies by accredited independent third parties.

Avoiding leakage — Leakage assessment required under both Gold Standard and Verra programme methodologies and independently verified. Leakage deductions are built into the credit issuance calculation.

Permanence — Permanence risk assessed by project type. For renewable energy projects, permanence risk is structurally low. For land-based projects, buffer pool or equivalent safeguard documentation is referenced in the disclosure pack.

Validation and verification — All projects independently validated and verified by accredited VVBs under Gold Standard or Verra requirements. VVB details are available in the project documentation on the registry.

Timing — All credits are ex-post: issued after the emissions reduction has occurred and been independently verified. Vintage year is recorded in the disclosure pack.

Avoiding double counting — Credits retired on Gold Standard Impact Registry or Verra Registry, permanently cancelled with proof of ownership. Serial numbers provided. Double selling is prevented by registry architecture.

Transparency — All project documentation, methodology, validation and verification reports, and retirement records are publicly available on the relevant registry. Direct links are provided in the disclosure pack.

Full methodology and due diligence process →

SECR Disclosure / Model net figure disclosure DEFRA p.115

A SECR-conformant net figure disclosure.

The model disclosure opposite demonstrates how the eight DEFRA non-Kyoto disclosure requirements are satisfied within a SECR report. It can be combined with the VCMI claim statement and ISO 14068-1 §11.4 documentation for a complete, multi-framework disclosure.

Gross & net

Both figures disclosed

SECR requires both the gross tCO₂e figure and the net figure with offsets deducted. The offset volume is the reconciling item.

8 items

Full non-Kyoto checklist

All eight disclosure items for non-Kyoto credits, including the item 8 Good Quality compliance note, addressed in the disclosure pack.

Registry links

Publicly verifiable

Direct links to project documentation and proof of retirement on Gold Standard or Verra registries. Any stakeholder can independently verify the retirement record.

Model disclosure for illustrative purposes only. Exact wording should reflect actual project details, registry links, and serial numbers. Legal review recommended before inclusion in a statutory SECR report.

Framework Library · 06

The six frameworks that extend the Good Quality baseline.

DEFRA is the domestic regulatory floor. Each of the six other frameworks addresses a dimension that the 2019 guidance does not — credit quality at programme level, disclosure documentation, public claim language, government double-counting, aviation compliance, and the science-based transition pathway.

IC
Credit quality

ICVCM Core Carbon Principles

Integrity Council for the Voluntary Carbon Market · 2023

The modern successor to DEFRA’s criteria. The ten CCPs address every DEFRA criterion with greater rigour, at programme level, with independent assessment. CCP-Approved status of Gold Standard and Verra provides documented satisfaction of all seven Good Quality criteria and goes beyond them on government double counting, additionality methodology rigour, and sustainable development.

IS
Disclosure structure

ISO 14068-1

International Organization for Standardization · 2023

Extends DEFRA in three critical dimensions: a hard five-year vintage limit, a 12-month retirement deadline, and a mandatory §11.4 documentation checklist that goes beyond the SECR disclosure requirements. The international standard for carbon neutrality claims; provides the disclosure structure that DEFRA leaves undefined.

VC
Claim language

VCMI Claims Code

Voluntary Carbon Markets Integrity Initiative · 2023

Addresses the dimension DEFRA leaves entirely open: what an organisation may say publicly about its offset purchase outside the SECR report. The VCMI tier structure, pre-requisite conditions, and defined claim language provide the framework for sustainability reports, investor disclosures, and external communications that DEFRA does not govern.

OX
Portfolio construction

Oxford Principles 2024

University of Oxford · Smith School · 2024

Addresses portfolio composition and the long-term shift toward durable carbon removal — a question DEFRA does not ask. For organisations whose sustainability teams are looking beyond the regulatory minimum toward a credible net zero trajectory, the Oxford Principles provide the scientific framework for portfolio evolution.

CA
Aviation compliance

CORSIA

International Civil Aviation Organization · 2019 onward

The compliance scheme for international aviation. For organisations in or adjacent to the aviation sector, CORSIA eligibility and the corresponding adjustments requirement are sector-specific obligations that sit entirely outside DEFRA’s scope. The Sovereign Portfolio addresses this directly.

SB
Science-based targets

SBTi CNZ Standard v2.0

Science Based Targets initiative · Consultation draft Nov 2025

The emerging standard for corporate net zero including BVCM contributions. DEFRA does not address the relationship between an organisation’s reduction trajectory and its offset use. SBTi v2.0 does, through its pre-requisite structure and contribution framing. For SECR reporters with SBTi commitments, both frameworks are in play simultaneously.

See all seven frameworks compared → See the evidence pack
Next step

SECR compliant. Audit ready. Stakeholder defensible.

The 360° Impact Portfolio disclosure pack satisfies DEFRA’s Good Quality criteria and all eight non-Kyoto SECR disclosure requirements as a baseline, alongside the ICVCM CCPs, ISO 14068-1 §11.4, and VCMI Claims Code requirements. A single document for a SECR report, a sustainability report, and an external assurance engagement. The 30-minute discovery call is the starting point.

Book a discovery call → Download methodology pack