The demand for carbon credits has skyrocketed. In 2021 alone, the voluntary carbon credit markets roughly tripled in size. But Voluntary Carbon Credits (VCMs) are unregulated, which makes it difficult for organizations to verify the legitimacy of individual credits. And that’s important, because investing in low-quality offsets could end up leaving a serious mark on your corporate reputation and, worse, have little impact on the climate.
Sylvera - a carbon intelligence platform to help evaluate and invest in high-quality carbon credits - recenlty explored seven key factors to consider when performing due diligence on carbon credits. Here they are:
Follow the mitigation hierarchy. Only offset (i.e look for high quality carbon credits) after avoiding additional emissions and reducing from the existing process.
Quality over quantity. Actual match between credit and avoidance. Sinergy among parties. Long term benefit. And additional benefits (e.g. biodiversity).
Know your project. And avoid "greenwashing"
Verify by using trusted industry registries, such as Gold Standard Impact Registry, Climate Action Reserve (CAR) and American Carbon Registry (ACR)
Understand legislation and policy implications, e.g. SEC, IC-VCM, VCMI, ISSB and TNFD
Cost and supply. As supply and demand are currently disconnected, situation that requires special attention.
Risk. Utilize third-party due diligence tools.
Click below to read the full article bya Sylvera, including references to their tools and other great articles.
