Following our recent announcement about Calyx Global’s environmental and social risk screening and in the quest to shape a more robust voluntary carbon market (VCM), it’s crucial to delve into the current landscape of how carbon-crediting programs address safeguards. Environmental and social safeguards in carbon projects, often referred to as ESS or safeguards, are policies, standards and operational procedures aimed at identifying, avoiding and mitigating adverse environmental and social negative impacts for the people and areas impacted by a carbon project.
In this blog post, we clarify the critical areas where carbon-crediting programs need improvement in order to ensure that carbon projects not only provide co-benefits but also safeguard local communities’ rights and their environments, resources and livelihoods.
Our analysis centers on the standards of key players, Verra and Gold Standard, which have certified over 5,000 projects and issued over a billion carbon credits.* Specifically, we have assessed the Verified Carbon Standard (VCS), Climate, Community, and Biodiversity Standards (CCB), Sustainable Development Verified Impact Standard (SD VISta) and Gold Standard for the Global Goal (GS4GG).
Here are five actions that these bodies can take to improve how the carbon market implements environmental and social safeguards:
1. Give safeguards the same consideration as GHG impact and co-benefits
Carbon-crediting programs predominantly focus on the positive impacts of projects, including greenhouse gas impact and co-benefits, often sidelining the critical risk mitigation aspect of safeguards. Currently, in most programs, reporting on safeguards is mixed with reporting on positive project impacts, which in most cases consists of a box-checking exercise. In our latest safeguards blog post, we delve into the potential negative repercussions stemming from insufficient consideration of safeguards within carbon projects. If carbon credit programs elevate the importance of safeguards in the project design, implementation and operational phase, the outcome could be more responsible, sustainable, and impactful projects that will contribute to the success and credibility of carbon markets.
2. Standardize the scope of safeguards across crediting bodies
Carbon-crediting programs have notably different variations in their approach and scope of what they consider safeguards. This inconsistency emphasizes the need for a more comprehensive framework. While essential components like stakeholder identification, engagement, and consultation are covered by most programs, the depth of coverage often proves to be insufficient. In addition, crucial areas of safeguards such as ecosystem conservation, gender, land tenure, cultural heritage and benefit sharing are not consistently addressed across all program requirements.
Calyx Global’s Environmental and Social Screening framework covers 10 safeguard areas and 55 sub-areas –widely considered international best practices. However, none of the crediting programs’ standards we assessed come close to addressing all areas (stay tuned for our upcoming comparative analysis of safeguards coverage across various carbon credit programs). By expanding the scope of environmental and social safeguards, carbon crediting programs have the potential to improve project impact assessments by offering a more comprehensive understanding of a project's effects and strengthening accountability. The outcome? Increased confidence among investors and buyers.
3. Offer more guidance on how to ensure that a project does “no harm”
In line with ICVCM’s CCPs, carbon-crediting programs shall not only establish safeguards requirements but offer more detailed guidance and tools, equipping both project developers and independent reviewers with a practical framework. This guidance should explain how to apply guiding principles effectively, offer insights into appropriately identifying risks (with adequate methodologies) and outline specific measures that must be taken when specific risks are identified. Although some crediting programs offer guiding principles and a limited number of guiding documents, developers often grapple with broad criteria and a limited understanding of safeguards.
For instance, while every carbon-crediting program mandates projects to ensure non-discrimination against women, only Gold Standard has a dedicated Gender Policy and standalone Gender Equality Requirements guidelines for project developers.** Similarly, although all programs acknowledge the necessity of Free, Prior and Informed Consent (FPIC), they often lack detailed provisions on addressing risks related to natural resources, governance and the livelihoods of indigenous communities, including protecting social fabric and traditions. This highlights the need for requirements to go beyond widely established best practices on safeguards, ensuring a more consistent, robust and inclusive approach that project developers can effectively implement.
4. Strengthen safeguards compliance mechanisms
Ongoing compliance systems are often an afterthought in safeguards. Even the most thoughtful safeguards being implemented in the design of a carbon project are vulnerable to operational failures. By providing compliance mechanisms such as third-party audits or regular monitoring, stakeholders can be more confident in the real outcomes those safeguards produced (or avoided).
As discussed earlier, the provision of additional guidance would not only assist developers in enhancing their risk assessment and mitigation practices but would also empower third-party entities to conduct more thorough verifications. This added layer of scrutiny is vital in strengthening the validation and verification process, contributing to its overall improvement.
5. Improve transparency
Transparency is a cornerstone in understanding and conveying the quality of a carbon project, and that includes safeguards. Projects that openly disclose risks and articulate mitigation measures have the opportunity to get ahead of an investigative 3rd party. By openly communicating, developers not only cultivate trust but also contribute significantly to the collective learning curve of the entire industry. Carbon-crediting programs have an opportunity to actively encourage transparency throughout each stage of a project. This commitment to openness not only elevates the credibility of projects but also nurtures a culture of accountability, where project developers are held responsible for the impact of their initiatives.
Moreover, transparency plays a crucial role in capacity-building. Making information accessible equips all stakeholders involved—ranging from project developers to independent reviewers—with the necessary skills and knowledge to navigate the evolving landscape of safeguards within the dynamic realm of carbon projects.
To truly harness the potential of the voluntary carbon market in addressing climate change, we must prioritize and strengthen safeguards by including them as a formal requirement, broadening their scope, providing comprehensive guidance, enhancing their compliance mechanisms and improving transparency. Through these measures, carbon projects can increase positive impacts across environmental, social and governance dimensions.
At Calyx Global, we are dedicated to empowering buyers and investors with the essential information needed to make informed decisions. Our new screening is designed to offer a nuanced understanding of the environmental and social risks associated with projects, filling the existing gap in information and providing a more comprehensive basis for investment choices.
To gain a comprehensive understanding of the current state of safeguards in the voluntary carbon market and explore the capabilities of Calyx Global's risk screening, we invite you to join our upcoming webinar, "The 3rd Pillar of Carbon Credit Quality: Safeguards."
Register for the webinar scheduled for January 30, 2024, here. We look forward to engaging in a constructive dialogue on safeguards within the carbon market.
*https://www.goldstandard.org/about-us/vision-and-mission and https://verra.org/
**Verra allows for the generation of W+-labeled VCUs from projects that are certified to both the VCS Program and the W+ Standard. W+ Standard is an independently quantitative methodology for assessing impacts and outcomes for women created by Women Organizing for Change in Agriculture and Natural Resource Management (WOCAN).
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