CDR Carbon Data Provider Interview - Sylvera

'Unbound Showcase' is a globe-spanning series of interviews with pioneers of carbon dioxide removal (CDR). We’re questioning innovators, business leaders, policymakers, academics, buyers, and investors taking on the challenge of our lifetime—gigaton-scale carbon removal from the earth's atmosphere.

Today’s interview is with Jess Roberts , VP of Assessments at Sylvera , who’s working to develop in-depth Ratings and assessments to help drive more funding toward effective climate solutions that could otherwise go unfunded.

"What is Sylvera, and how do you help companies navigate the carbon markets??

Jess Roberts - Sylvera is a carbon data platform on a mission to incentivise real climate action Across the end-to-end carbon journey, we help firms consider the risks and opportunities and invest in the carbon market in a way that meets their goals, whether that’s to comply with regulation that impacts their industry or to support their net zero journey.

We provide data about those risks and opportunities. One way we do that is by providing data about the quality of projects. For post-issuance project due diligence, we package that into a rating from AAA to D, similar to other credit ratings. Ratings include data about additionality, permanence, co-benefits, and safeguarding, all key quality questions these companies have when looking at these risks and opportunities.

We started by focusing on nature-based markets, particularly Reducing Emissions from Deforestation and forest Degradation (REDD), because they were some of the most difficult to understand and the least transparent. So, we invested in technology to help unlock data points around risk and quality related to REDD.

Now, we're applying what we've learned in the first few years, specialising in nature-based solutions projects, right through to technology-based solutions such as CCUS or Direct Air Capture, and, biochar, which are subject to the same questions around quality and transparency as the previous ones.

"What’s needed to make technology-based solutions as effective as possible for removing carbon from the atmosphere?"

Jess Roberts - It's essential to understand what 'effective' means in this context. We evaluate effectiveness in terms of carbon impact through three core lenses. The first lens focuses on whether the credit you're purchasing is truly making an additional impact on climate, known as the question of additionality. The second question is, is that credit or that tonne that's been removed going to last as long as you've been sold? Then, the third question is, have you been sold the correct number of credits? Has the level of removal been correctly quantified? That's all around over-crediting risk. It's exactly the same challenges other project types in the market today face and technology-based solutions need to maximise along those three lenses as well to be as effective as possible at creating positive carbon impact.

“Beyond simply measuring CO2 removal, does Sylvera track any additional environmental or social co-benefits associated with CDR projects?”?

Jess Roberts - Absolutely. Beyond the carbon efficacy question being addressed by those three pillars discussed, buyers also want to know they’re investing in a project that will bring additional benefits beyond carbon, and whether there are any risks associated with safeguarding violations or community harm that the project may be causing. We consider those risks and factor them into our AAA to D rating where relevant. We also offer a separate co-benefits score to examine whether the project is causing no net harm and whether the project is going above and beyond to invest in the community and biodiversity.

Data such as this allows buyers to make the choice to invest or not in terms of their risk appetite and whether or not they want to favour projects that invest heavily in sustainable finance or community engagement, depending on how they see it aligning with their goals and overall portfolio of credits.

“How does Sylvera make data accessible and usable for various stakeholders, including investors, policymakers, and the general public?”??

Jess Roberts - The purpose of a Sylvera Rating is to take all of the disparate data about project’s and their impact and make it accessible and actionable for investors or potential investors in the carbon market. In addition, we want to ensure the frameworks that we use to produce Ratings, as well as the raw data that informs the rating are also transparent and available to the general public.?

When we create a new Rating framework, we hold a Framework Review Committee to open it up to the carbon market industry stakeholders, from academics to project developers, for review and scrutiny to ensure we’re always considering and capturing the latest science and techniques in an ever-shifting industry.?

Our commitment to governance and transparency is evident in our pioneering role. We're the first carbon credit ratings provider to apply ICMA’s Code of Conduct for ESG ratings. We hope this will provide the foundation for global governance of carbon credit ratings, and it should be a helpful step towards future regulation of the voluntary carbon market.

“What should investors know about tech-based removals? How should they assess their quality?”?

Jess Roberts - There's lots of excitement in the tech-based removal space, and rightfully so, there should be. However, these technologies are not immune to the issues that have hamstrung the market in the past, such as additionality concerns, a lack of data and transparency, and concerns around the appropriate level of disclosures. Investors need to interrogate durable removals as much as any other project type. By building better transparency and insight into project quality and price from the onset, we can bring durable CDR to scale faster and avoid some of the past mistakes of the carbon markets. We've had a significant proliferation of different standards and methodologies associated with tech-based removals, which is exciting because it earmarks the level of innovation in this space but also means that careful investment is needed.?

Investors can navigate these project types’ unknowns with the help that carbon data providers like Sylvera provide.?

"Considering the future landscape, what key innovations or advancements do you anticipate will shape carbon data collection and analysis for CO2 removal projects?"?

Jess Roberts - A lot of what's happening for the broader voluntary carbon market will be crucial for the durable removal space as well. Developments like the ICVCM’s CCP labels will provide a data quality floor across the whole VCM, not just durable CDR. Further, innovations in the EU regulation framework that have been approved and built will push the bar for these new entrants to meet from the beginning. There have been lots of investments into digital measurement, reporting and verification (MRV) and digitising that process so project developers can make their data more accessible. If durable removals implement digital MRV, as well as meet the floor of transparency disclosures, then we should be on a path to unlocking the potential of these new technologies much faster.?

“What's the biggest challenge facing CDR’s nature-based/ science-based solutions, and what is required to scale and solve them?”

Jess Roberts - The main risk in removals right now is blindly equating ‘technology’ and ‘removal’ with quality projects. These new technologies and projects need as much due diligence as any other project type to ensure they’re having the carbon impact they claim, not doing harm to communities, and are financially additional. At the moment, most projects don’t disclose sufficient data to appropriately assess project quality like we can for other projects in the market. While there is still investment flowing into these projects in the short term, in the long-term, that creates risk for investors – and for our planet.?

Net zero targets keep growing nearer and we’re running out of time to waste money on projects which aren’t impactful.? Carbon credits can be a useful tool for driving capital to the most effective solutions, so let’s build in the data disclosures to help investors direct investments towards meaningful climate change mitigation. We want the velocity of the VCM to be a springboard and we can use lessons learned to bring durable CDR to scale faster, rather than run into the same challenges.

“Can you tell us more about the ICMA code of conduct Sylvera is working towards, and what that means for you?”

Jess Roberts - While the code is voluntary for now, it's creating a minimum bar of governance and standardisation globally in ESG Ratings, and carbon credit ratings as part of that. The majority of our policies were already compliant, but having a code helps ensure that all of carbon credit ratings as an emerging offering are independent, conflict-free, transparent, and reliable – critical to underpin the trust of the voluntary carbon market.?

Carbon credits are a critical tool for financing effective climate solutions, and for too long, a lack of trust and transparency have held them back. While we emerged, in part, to help solve that problem, we can’t do it alone.?Better standards and regulations at all levels, including ratings, will fully unlock the carbon market’s potential.

Unbound Summits' mission focuses on unrivalled connections, unmatched insights and unbound CDR opportunities. You can learn more about Sylvera's unique approach to helping companies navigate the carbon market here .