Our Environmental Integrity Approach

Carbon project development is an inherently risky exercise with a range of different variables often beyond your control. The role of a project developer is to minimise these risks, and to apply a level of conservatism to their activities that provides comfort around the quality of the emissions reductions being generated.

This is where the concept of environmental integrity comes in. In the context of global carbon markets evolving under the Paris Agreement, environmental integrity refers to the quality of carbon projects and credits – that the emissions reductions generated from these activities are real, quantifiable and verifiable. Carbon project & credit-level integrity is about trust, transparency and accountability, which we understand as:

• Trust: Certainty that carbon credits purchased represent real and additional emissions reductions, and that the do no harm to communities or planet.
• Transparency: Data and information that provides evidence of measurable and verifiable emissions reductions.
• Accountability: Credits and their characteristics are evidence-based traceable back to source, and verifiable.

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“…carbon credits must be generated by activities that truly go beyond business-as-usual and benefit host communities – the supply side – and that their use increases overall greenhouse gas mitigation rather than substituting for existing actions – the demand side. Without clear high integrity rules for both aspects, voluntary carbon markets will rightly continue to be viewed with suspicion, companies will be afraid to invest, and their potential will be lost…”

– VCMI Claims Code of Practice

In practice, environmental integrity requires a conservative, transparent and accountable approach to risk management from the outset. Based on our own experience, and taking the lead from international ratings agencies, and other global integrity schemes (e.g. BeZero and Sylvera), we have designed our environmental integrity framework to cover the following six risks:

• Non-Additionality Risk: The risk that the emissions reduction activity was going to happen anyway, and that the carbon finance is not required.
• Over-Crediting Risk: The risk that we have overestimated the emissions reductions measured and therefore the credits issued don’t represent real abatement.
• Leakage Risk: The risk that the project activity causes emissions increases somewhere outside the project area negating the reductions made in the project (e.g. logging prevented now occurs elsewhere outs the project area)
• Non-Permanence Risk: The risk that the emissions reduced are not permanent and will be reversed at some point in the future.
• Policy (Sovereign) Risk: The risk that political stability will be disrupted, resulting in changes to jurisdictional policies/laws that will negatively impact our projects.
• Perverse Incentives Risk: The risk that the activity results in an unintended negative outcome that is contrary to the intent of the project’s intentions (e.g. that higher carbon values from planting more fast growing trees may negatively impact biodiversity of the native ecosystem; or that the use of carbon credits allow polluters to continue polluting).

We work to quantify these six major risks during the initial design and feasibility phases of a project, as well as any other risks that may be unique to that particular project method, region or community.

Whilst project methodologies provide measurement protocols for accounting for these risks in different ways, we endeavour to be more accurate and conservative with our own risk management and mitigation, both before and during project implementation.

Pre-Project Baselines

Whilst the use of default data values is a common practice allowed by project methodologies, our experience is that they are often built from global data sets and represent country-level average values rather than region-specific data points (e.g. country-level default deforestation rates (fNRB) used for clean cookstove project baseline setting).When setting project emissions baselines, we endeavour to:

• use independent, localised data and information gathering that accurately reflects the on-ground reality of areas in which our projects will be implemented.
• work with reputable independent research institutes to undertake localised surveys data calculation, and field testing that represent operational realities (as opposed to data gathered only in controlled lab environments).

Project Monitoring

Risk management is an ongoing process, and requires regular checks and balances to remain on course. Many projects only require annual or biennial data gathering once implemented and issues are often missed between these distanced sampling or reporting site visits. To manage these risks, WeAct:

• Ensures we have local teams working on the ground that are embedded with communities and have clear communication channels in place; and
• Undertakes continuous monitoring of project activities and risks, ensuring we are able to respond to issues, as well as community complaints in a timely manner.

Internal Governance

As a company we regularly review project risks at a project, country and executive level. Using a range of governance tools including a risk framework, risk register, and monthly management meetings, the WeAct team regularly reviews these six key risks and seeks to either mitigate issues before they arise, or manage them when they do.

• We maintain links with international carbon standards and best practice governance initiatives to ensure that the methodologies and frameworks we implement are working at best practice.
• We monitor and engage with academic and market criticisms of project methods, and use these to test and refine our own approaches and conservatism against contemporary market commentary.

Our Commitment

Our general commitment to environmental integrity in our projects and the credits we create, is one of risk management and continuous improvement. Whilst it is impossible to be perfect, we strive to have the right processes in place that enable us to continuously review and refine our work, and take into account real time information that will make us better climate actors and stronger agents of sustainable development now and in the future.