Perspectives Climate Group
10/2022 – 2/2022
Supporting the systematic screening and robust management of environmental and social risks and impacts of carbon credits
10/2022 – 2/2022
The main objectives of this project was twofold: (1) identify current good practices in the assessment and management of environmental and social (E&S) risks and impacts associated with carbon credits and (2) develop a multi-criteria tool to facilitate the systematic screening and robust management of E&S risks and impacts of carbon credits, so as to implement the ‘buyer beware’ principle and minimize reputational and financial risks to the buyer related to the purchase and use of carbon credits. The main goal of the project was to support the client in systematically screening its existing carbon credit portfolio in terms of E&S risks and impacts, and also in screening potential new carbon credit-generating activities to support decision-making while avoiding the purchase of carbon credits from activities with potentially high E&S risks and impacts.
The specific tasks Perspectives carried out were:
● Prepare a report covering current and emerging market and regulatory trends in the assessment and management of E&S risks and impacts related to carbon credit-generating activities, including: (1) an overview of key guidance and standards for E&S risk and impact assessment and management, (2) E&S risks and impacts typical to specific activity types (such as renewable energy, nature-based solutions, and carbon capture and storage) and case studies to illustrate the types of E&S concerns that have been raised with regard to carbon credit-generating activities (3) synthesis of good practice elements for E&S safeguarding, including, but not necessarily limited to: ex-ante assessment of E&S risks and impacts, development and implementation of a plan to mitigate, manage, monitor, and report relevant E&S risks and impacts, third-party validation and verification, stakeholder engagement, and grievance mechanisms.
● Develop a multi-criteria tool for E&S screening based on the E&S safeguarding report prepared. The tool is designed in a user-friendly Excel format, for use in screening the existing portfolio of carbon credit-generating activities, as well as potential new activities.
● Prepare and deliver an interactive (remote) training event to familiarize the staff (i.e., the future users of the tool) on the features and use of the multicriteria tool.
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