Understanding and assessing project impacts beyond carbon

• Understanding carbon credit quality does not stop at carbon efficacy - climate projects can deliver positive social, economic, and environmental impact, or negative impact in the absence of robust safeguards.
• BeZero’s proprietary non-carbon risk assessment framework is supported by extensive research on SDG claims and project safeguards data conducted by experts in sustainable development, biodiversity, and carbon markets.
• Robust, project-level ‘beyond carbon’ data on SDG claims and safeguards helps BeZero’s platform users understand the full impact of their carbon credit investments.

Carbon projects do not operate in a vacuum

The core promise of a carbon credit is to avoid or remove one tonne of carbon dioxide equivalent. But non-carbon aspects of a project can affect whether a credit delivers on that promise. And projects often do more than mitigate greenhouse gas (GHG) emissions.

Most projects report positive social, economic, and environmental benefits - or ‘co-benefits’ - commonly expressed as SDG claims . Conversely, project activities can have negative impacts on planet and people if appropriate safeguards are not in place.

As such, anyone screening, assessing, or purchasing carbon credits needs to recognise that climate projects do not operate in a vacuum. In addition to evaluating a given project’s carbon efficacy, thinking about the non-carbon impact of the project’s activities is paramount.?

It’s about doing good while not doing harm.

This article outlines BeZero’s research on non-carbon project data, how this informs our assessment framework for ‘beyond carbon’ impact, and how our expert team has made this body of knowledge accessible on our platform to help companies make better decisions around their carbon investments.

A primer on SDG claims and project safeguards

The non-carbon impact of carbon projects can be framed under two separate but interrelated lenses:

• SDGs claimed by projects are about how project activities can create positive social, environmental and economic outcomes. Examples include increasing access to affordable and clean energy, improving land or marine biodiversity, and creating decent employment opportunities in the community.
• Safeguards on the other hand are measures put in place by the project to reduce the risk of negative outcomes for the people and environment close to the project area. Examples include provisions to avoid the physical or economic displacement of communities, benefit sharing mechanisms ensuring the fair distribution of project revenues to community members, and measures to prevent the pollution of ecosystems in the area.

Safeguards are key to reducing the risk that negative impacts undermine the positive beyond carbon impacts like SDG contributions. Effective safeguards can ultimately strengthen the quality of SDG claims, and help buyers understand a project’s entire beyond carbon picture.?

In some instances, safeguards can also help to mitigate carbon risks such as non-permanence and additionality. For example, if free, prior and informed consent (FPIC) for an avoided unplanned deforestation project is obtained, this can signal that indigenous communities are supportive of the project, lowering the risk of stakeholder dissent and potential future reversals.

Environmental safeguards such as the use of native species in Afforestation, Reforestation & Restoration (ARR) projects can also improve carbon outcomes: planting mainly native species tends to increase additionality, and resilience to reversals from drought, pests and disease.

Reviewing the evidence on doing good, beyond GHG efficacy

Since 2020, BeZero’s experts in sustainable development, biodiversity, and carbon markets have conducted extensive research on the social, economic and environmental benefits of carbon projects. They continue to track market-wide trends on SDG claims and project safeguards, helping to maintain curated non-carbon databases for analytical purposes on an ongoing basis. Most of their findings have been published and are freely available on BeZero’s public platform .

Key findings on SDG claims

Project developers are commended for integrating beyond carbon impact in their project activities, and buyers consistently express interest in the co-benefits of the carbon credits they purchase, taking time to compare and research SDG claims.?

However, applying the UN Sustainable Development Goals framework to illustrate these impacts is challenging . SDGs were designed for country-level use, and many of the metrics created by the UN to measure SDG progress are not applicable at the project scale. Furthermore, the qualitative nature of some targets of the SDGs can make the quantification, and thus comparability of their impact, difficult. Thus, developers and standards bodies create their own metrics tailored to their projects, resulting in a lack of standardisation.?

Additionally, standards bodies systems for processing SDG claims vary greatly in the requirements and steps involved. Some standards bodies require baseline impact metrics data, monitoring, and for claims to be validated and verified by a third party. Others allow project developers to claim with little to no supporting evidence. This variety in reporting requirements adds to the complexity of interpreting the impacts behind SDG claims, leading to a range in the integrity and robustness of those claims.

Another challenge is that the extent of information behind SDG claims collected by project developers is not consistently accessible to buyers. We have previously concluded from our interviews with buyers that claims due diligence is important to them. Encouragingly, almost two thirds of project developers we’ve spoken to go beyond accreditor MRV requirements for reporting SDG claims. But this additional data is not always readily accessible to buyers, partly because developers lack guidance from standards bodies on how to effectively gather, process, and submit SDG claims.

In the same way carbon quality is not binary due to the range of GHG outcomes projects can deliver, SDG claims should not be treated as binary ‘made’ or ‘not made’ outcomes - there is a large variance in the ambition of targets, magnitude of impact, and the quality of evidence.?

Increased transparency around the reporting of the impact behind SDG claims could improve the integrity of those claims, enhance buyers’ understanding of what they are actually buying, and support finance flows towards highly impactful projects.

Despite these limitations on accessing and interpreting dependable data, carbon credits with SDG claims have consistently higher prices . Overall credits with SDG claims fetch 27% higher prices than credits without, a statistically significant difference.1 Buyers tend to pay the highest prices for credits that have SDG claims and high carbon quality. On average, credits from highly rated projects (‘AA’) with SDG claims are priced over 3x higher than credits from lower rated projects (‘C’) without SDG claims.2

Key findings on safeguards

Safeguards are essential for creating high-integrity projects, because they improve the likelihood of high-quality carbon outcomes, increase beyond-carbon benefits, and minimise the risk of negative impacts.?

Despite the critical role of safeguards, not all projects are required to implement them. The safeguard requirements that projects have to meet depend on the standards body or related certification of the project. Some standards bodies have expansive safeguard requirements whereas others have minimal requirements. Additionally, several meta standards like the Integrity Council for the Voluntary Carbon Market (ICVCM) have published guidance regarding safeguards.

Buyers may of course have their own preferences regarding safeguards. In fact, many include evidence of safeguards as a top characteristic to look for when considering a purchase. However, deciphering which safeguards have been implemented is challenging, as the same safeguards are not consistently required across all standards. Additionally, even when safeguards are required, they are not reported in a consistent format (or sometimes not at all) in publicly available project documents.

Due to the complexity of the safeguards ecosystem, increased transparency in the market is needed to help buyers make well-informed purchasing decisions. Increased transparency can also help highlight the standards bodies and projects with comprehensive safeguard requirements and evidence in place.?

Read our deep dive on safeguards to learn more.

A robust non-carbon assessment framework built by experts

BeZero houses unique interdisciplinary expertise in climate and geospatial science, biodiversity, conservation, environmental policy, and financial research. This breadth and depth of specialties means we not only have the required skill set to rate projects from a carbon risk perspective, we also have the capacity to conduct project-level assessments of non-carbon risks.

Some of the analysts involved in BeZero’s beyond carbon research and development include:

• Dr Nick Atkinson , Biodiversity Strategist, a conservation scientist with specialist knowledge in the role of trees in carbon, and the spearhead of BeZero’s eDNA research in Uganda.
• Dr Fernanda Coelho de Souza , Senior Carbon Ratings Scientist, a tropical ecologist whose work in nature-based solutions aims to reconcile forest conservation with sustainable development.
• Dr Rishi Das , Lead, NBS Methodologies, an environmental scientist working on issues of climate change, biodiversity conservation and sustainable natural resource management.
• Sarah Heard , Senior Director, Beyond Carbon, an expert in sustainable development, with a focus on creating new markets that align environmental and economic incentives. She previously led an innovative function at The Nature Conservancy that used market-based mechanisms to accelerate conservation outcomes.?
• Linus Hiscox , Senior Carbon Ratings Scientist, IFM Lead, a wildlife ecologist whose work looks at wildlife conservation approaches in the face of a rapidly changing climate.
• Matt Lavelle , Senior Carbon Ratings Scientist, Avoided Deforestation Lead, an ecological economist with a speciality in systems thinking and sustainable scale, fair distribution and efficient allocation.
• Julia Mackey , Beyond Carbon Analyst, an environmental economist whose past research has focused on humanitarian aid, and market responses to reports of social and environmental harm in fast fashion.
• Dr Spencer Meyer , Chief Ratings Officer, a carbon market veteran with 20 years’ experience in nature-based solutions, forest management, conservation finance, and biodiversity and co-benefits research.
• Dr Sadadi Ojoatre, Forest Analyst, a spatial ecologist whose non-carbon work focuses on biodiversity monitoring and assessment with a focus on biodiversity metrics such as eDNA.
• Dr Phil Platts , VP, Geospatial & Earth Observation, a conservation scientist whose work looks at the measurement and modelling of forest biodiversity, ecosystem services, and conservation costs.
• Dr Kirti Ramesh, Director of Carbon Ratings, a marine ecologist whose work looks at the effects of climate change on coastal ecosystems with particular focus on ocean acidification, carbon cycling, and impacts on early development of marine organisms.
• Torrey Sanseverino , Beyond Carbon Manager, an environmental scientist with deep knowledge of safeguards, SDGs, biodiversity markets, and the intersections of climate change, international development, and spatial analysis.
• Dr Jacob Socolar , Lead Scientist, NBS, a conservation scientist and applied statistician whose work spans biodiversity responses to human impacts, statistical techniques for the analysis of large-scale biodiversity inventory data, and the quantification and baselining of forest carbon.
• Akina Wong , Beyond Carbon Analyst, whose dissertation research focused on air pollution and its environmental and health implications.

BeZero’s beyond carbon risk assessment framework evaluates the effectiveness of project safeguards to support the protection of social and human rights of the people impacted by the project.?

Due to the wide ranging safeguards requirements, our analysts created a list of the most basic safeguards we believe projects can consider implementing to reduce the risk of negative impacts (Table 1). This list is informed by academic literature, ICVCM Core Carbon Principles requirements, international organisations’ requirements, as well as our extensive experience interrogating the safeguards data reported in many hundreds of carbon project documents.

Table 1.? BeZero identified safeguards.

First, we developed? our own list of important safeguards. Then we created a database of the safeguards in our list required by each standards body. We then took this one step further by assessing individual projects against both our list of safeguards and those actually required by the standards’ bodies, recording which projects report evidence specific to each safeguard in the list.?

Increasing transparency around safeguards is where ratings agencies like BeZero can offer value. Our non-carbon risk assessment framework can help carbon credit users understand the risk of negative impacts through the safeguards included in the project design, assessing the evidence that the project has relevant safeguards in place, robust safeguard designs, and the comprehensiveness of the methodology’s safeguards requirements.

Know your credit with our Beyond Carbon dashboard

In order to get a holistic view of a project’s GHG and non-carbon risks, carbon credit buyers need the right dataset and tools to unpack quality and make well-informed decisions. Understanding how carbon risks, beyond carbon impacts, and safeguards interact with one another is an essential component of carbon credit due diligence.

Users of BeZero’s platform can assess the non-carbon impact of carbon projects using our dedicated ‘Beyond Carbon’ dashboard.?

The dashboard outlines SDG claims as reported by the project on its registry page or in project documents. It also provides an SDG Certification Score which reflects the requirements a project had to meet to make their SDG claims according to their chosen SDG certification system.

While the data we’ve collected on safeguards has historically only been available to our internal ratings team, we are now surfacing? project-specific safeguard information and standards bodies requirements datasets on our dashboard for the whole market to access. Platform users can see which safeguards are required by the standards body, and which projects provide evidence for their claims.

Carbon credit users across the carbon value chain use BeZero’s Beyond Carbon dashboard to better understand the potential non-carbon impact of a given project. They can:

• Screen projects according to the Safeguards they evidence
• See which SDGs the project is claiming and how they compare to similar projects
• Evaluate the robustness of a project’s SDG claims with our SDG Certification Score
• Contextualise the project’s SDG claims with SDG Index data on the host country progress

A complete toolkit for carbon project assessment

Increasing transparency around SDG claims and project safeguards is where ratings agencies like BeZero Carbon offer unique value.?

With a track record of research and practical experience in sustainable development, biodiversity and carbon markets, BeZero houses deep knowledge of beyond carbon topics. Most of our analysts hold PhDs in a variety of relevant disciplines, and have published 250+ papers in top tier academic journals including Nature and Science Magazine.

By collecting, cleaning and codifying non-carbon project data for hundreds of projects, our analytical team has built a proprietary framework for evaluating the non-carbon impact of carbon projects across sectors and countries, including a project-level assessment of reported evidence of safeguards.

BeZero makes beyond carbon project impact information accessible and intelligible to everyone in the carbon value chain, from project developers to end buyers, via robust datasets. Alongside carbon ratings and risk analytics, our platform offers a complete toolkit for assessing the full impact of carbon projects on planet and people, helping all carbon credit users make informed decisions.

Going forward, we will continue to advocate for increased transparency and standardisation in the reporting of non-carbon data. Developers need more clarity and guidance from standards bodies on how to better integrate and communicate the beyond carbon impact of their projects in order to scale high-integrity carbon markets. Until then, we encourage all market participants to use the knowledge, data and tools made available by BeZero to gain a deeper understanding of project risks.

To learn more about BeZero’s Beyond Carbon offering, or our ratings and risk analytics platform, contact [email protected] .

You can also register to our public platform to access essential project information, carbon ratings, and hundreds of insights on carbon markets.

Further reading on ‘beyond carbon’ topics

Beyond carbon explainers

• Beyond Carbon Q&A
• What does climate action look like?

Safeguards research

• First do no harm: safeguards in carbon projects

SDG claims research

• Mapping the SDG claim lifecycle: 2023 update
• Buyers pay more for carbon credits with SDG claims
• Transparency is key for SDG claims to be an effective asset in the VCM
• Eye for detail: buyers want to know the evidence behind SDG claims
• Lost in translation: SDG claims are more than meets the eye
• Interpreting SDG claims in voluntary carbon projects

Individual SDG deep dives

• SDGs 1, 8 & 12: how economic SDG claims can be impactful in the VCM
• SDGs 2 & 6: how VCM projects can support access to food and clean water
• SDGs 3 & 7: how robust are SDG 3 & 7 claims in the VCM?
• SDGs 4, 5 & 10: applying the equality SDGs to the VCM
• SDGs 9 & 11: how VCM projects can support sustainable industrialisation
• SDG 13: a focus on climate action
• SDGs 14 & 15: time to rethink biodiversity
• SDGs 16 & 17: how carbon projects could contribute to promoting global collaboration and partnerships

Biodiversity research

• Drivers of loss: a way forward for biodiversity claims?
• Measuring the Earth's vital signs: how EBVs can build biodiversity markets
• How BeZero’s field research in Uganda is helping refine biomass estimates
• Trialling eDNA for biodiversity measurement
• How wild can the Voluntary Carbon Market get?
• Deep dive: biodiversity metrics
• The route to high integrity biodiversity markets

References:

1. p<0.001. The data is from January 2015 to 31st August 2024. Source: A BeZero dataset comprised of the four largest accreditors, Verra, Gold Standard (GS), American Carbon Registry (ACR), and Climate Action Reserve (CAR), and pricing data from Xpansiv’s CBL markets.
2. The data is from April 2022 to 31st August 2024. Source: BeZero Carbon ratings and a BeZero dataset comprised of the four largest accreditors, Verra, Gold Standard (GS), American Carbon Registry (ACR), and Climate Action Reserve (CAR), and pricing data from Xpansiv’s CBL markets.