Benefits of Partnering with Climate Crediting Programmes

SDGs and Carbon Credits 🌎 Carbon credits, particularly from the Voluntary Carbon Market (VCM), offer companies a pathway not only to achieve decarbonization but also to address broader sustainability objectives. These credits can contribute to various targets such as natural resource conservation, biodiversity protection, and socio-economic development, thereby supporting multiple Sustainable Development Goals (SDGs). Nature-based solutions (NCS) and technology-based solutions (TbS) represent two primary categories of projects within the carbon credit system. NCS projects often generate substantial co-benefits, including biodiversity protection and enhancements in soil, air, and water quality. These projects directly support ecosystem services and climate adaptation efforts while improving livelihoods through job creation in areas like nursery management and landscape restoration. Similarly, TbS projects like direct air carbon capture and storage (DACCS) contribute to industrial development and innovation. These projects typically offer measurable and permanent impacts but may also present challenges, such as significant energy requirements and potential conflicts over land use. The balance of these factors must be carefully managed to optimize both environmental and social outcomes. The selection of specific projects by businesses can vary based on their sustainability goals. For instance, companies may prefer forestry projects for their dual benefits of biodiversity conservation and socio-economic development, or they might opt for DACCS projects to stimulate technological advancement and infrastructure growth. Each type of project aligns with specific SDGs in distinct ways. Forestry projects, for example, are integral to achieving goals like Zero Hunger through the support of agro-ecosystems, Gender Equality by empowering women in community forest management, and Life on Land by maintaining biodiversity. Additionally, these projects support Decent Work and Economic Growth by revitalizing rural economies. Ultimately, the strategic use of carbon credits in NCS and TbS projects offers a robust method for companies to extend their impact beyond mere emissions reductions. It is essential, however, to recognize that carbon credits cannot substitute for the fundamental need to decarbonize operations and value chains. Companies must prioritize direct reductions in their carbon emissions as the cornerstone of their environmental strategy. Utilizing carbon credits should be seen as a supplementary measure, supporting and extending the reach of these primary decarbonization efforts. Source: WBCSD – World Business Council for Sustainable Development #sustainability #sustainable #business #esg #climatechange #climateaction #strategy #sdgs #sustainabledevelopment

Special edition of The Climate of Business newsletter in light of the finalisation of the COP29 Azerbaijan United Nations gathering. The outcomes of COP29 have introduced more stringent climate action measures, presenting proactive businesses with significant opportunities. The establishment of a global carbon credit trading system enables companies to offset emissions and invest in sustainable projects, potentially opening new revenue streams. The commitment of $300 billion annually to assist developing nations in combating climate change is expected to stimulate additional funding from multilateral development banks and private sources, offering businesses opportunities in sustainable development projects within emerging markets. Furthermore, the operationalisation of the Loss and Damage Fund underscores the increasing focus on climate adaptation and resilience, highlighting the need for businesses to consider climate risks in their operations and supply chains. By aligning with these initiatives, businesses can enhance their sustainability credentials, access new markets, and mitigate risks associated with climate change, creating a win-win scenario for those taking proactive steps. I give a detailed view on all steps a business can take immediately to reduce any exposure to climate risk related costs, also as outcome of COP29 negotiation outcomes. Have a read! #newsletter #co2 #emissions #sustainability #unitednations #co2emissions #emissionreduction

Over the past weeks and months, I've become increasingly convinced that there is a strong linkage between the quality challenges faced by the VCM (which are very well covered by the media) and the ways in which VCM projects are financed and paid for (which is less well covered). We at the American Forest Foundation just published a blog post which examines this further (link in the comments). Key points: 1) Low carbon prices and the lack of good finance options will push developers to aggressive choices in carbon accounting to make their projects viable. (As an aside, I would love for researchers to dig into whether or not there is a correlation between these elements and overcrediting - my hypothesis is that any such analysis would find a strong correlation). Not "aggressive" does not necessarily mean "wrong." It just means that developers have to bet on a specific, perhaps unlikely version of the future - and when it doesn't turn out that way, it results in over crediting. 2) If buyers don't change the way they are procuring credits, or how much they are willing to pay for them, there is going to be a massive shortage of high-quality credits relative to buyer demand. 3) Buyers need to provide up front capital to developers as part of solving this problem. 4) There are ways to do this that don't expose buyers to excessive risk. We propose an offtake agreement with milestone based prepayments (if someone has a snappy name for this, let me know) as one example. 5) Aside from the benefits to the projects and the atmosphere, buying credits in this way offers huge benefits to buyers: a) it protects them against rapidly increasing carbon prices; b) it helps them achieve a significant discount on a per-tonne basis (because by offering cheaper capital they reduce the projects costs - costs they end up covering whether they prepay or not); c) it enables long-term planning and gets companies out of the year-to-year chaos of spot markets; d) it enables companies to tell a story of how they are leading and catalyzing new projects; e) by getting involved in a project at the very beginning, buyers can learn more about the project and its strengths and weaknesses - helping them mitigate reputational risks. I would love to hear from the community, but especially from buyers: does this make sense? What are the downsides of transacting in this way that we have to account for in further design?

Rwanda just cracked the code on carbon credits. Here's what happened: ↳ 2.25 million carbon credits issued by 2025 ↳ 87% from clean cookstove projects alone   ↳ $6.9 billion World Bank investment secured ↳ Strategic partnership with Singapore locked in The result? Rwanda becomes the first low-income country to achieve early success in the voluntary carbon market. But here's what makes this different: Their credits aren't just carbon neutral. They create real co-benefits: → Reduced deforestation → Cleaner indoor air for families   → Local job creation → Biodiversity protection The kicker? Every dollar earned gets reinvested into green infrastructure like solar mini-grids. This isn't just climate action. It's a blueprint for sustainable economic growth. ESG investors are taking notice. And for good reason. What's your take on emerging markets leading climate finance innovation? ♻️ Repost to help people in your network. And follow me for more posts like this.

A recent client of ours claimed they cannot use carbon credits in their sustainability strategy because their budget would be way too low. Today, they invested in high-quality projects. Let me show you how you can do the same for your company 🌿 ⚖️ Balancing Price vs. Quality - Through proper due diligence An expensive carbon credit, from for example, an ARR project, does not guarantee quality. —> Robust due diligence of nature-based solutions, can ensure that you are able to find the diamonds in the rough, the projects that are and will continue to deliver on emissions reduction and co-benefits, but are not priced too high. 📑Offtake agreements A legal contract in which a buyer agrees to purchase a set amount of carbon credits at set price points for x amount of years, only paying for the credits on the agreed-upon dates. This enables you to: 1. Save countless resources on sourcing and acquiring credits year-on-year 2. Lock in a stable price, in a market where nature-based credits are expected to increase 6 fold by 2031(EY net zero report) 3. Lock in supply of nature-based credits that could become harder to come by, especially in Europe. 4. Form relationships with invested projects that enable stronger marketing narratives 5. Conduct long-term planning and strategy formulation for companies, providing a definite picture of costs associated with their climate targets. 🤝Engage with Trusted Intermediaries Intermediaries can help your company save on: 1. Ensuring quality and transparency with access to pricing and volume data 2. Pass projects through robust due diligence. 3. Create bespoke solutions balancing quality and price. 4. Cater for your unique sustainability strategy, whilst aligning the offering with science backed approaches such as the Oxford Principles for Offsetting. 🌲⚙️ Utilise Portfolios Carbon credit portfolios are bundles of credits from various carbon projects and solutions, creating a spread between various prices, risk factors and co-benefit impact areas. These are some sure-fire ways to incorporate carbon credits on a budget. Let me know in the comments if I missed any, or visit the Senken Academy for more insights such as these (Link in comments) #Sustainability #NetZero #CarbonCredits #ClimateAction #CorporateResponsibility