Co-benefits of carbon offsets
Climate change has now become a top business priority, but other sustainability-related issues can also be at the forefront of an organization’s goals. This is where co-benefits in carbon projects can add extra value and help align multiple goals with the right investment. So how do co-benefits work?
What are co-benefits?
Co-benefits are additional benefits that go beyond greenhouse gas emissions (GHGs) avoidance and removal, such as positively impacting communities and biodiversity. It's important to note that not all types of carbon projects offer the same types or levels of co-benefits. For instance, a REDD+ project that aims to protect a forest from deforestation could, as a result, create jobs in the area and also protect local biodiversity, whereas a direct air capture (DAC) project would create a few jobs but would not have wider ecological benefits.
Measuring quality and impact
There are other considerations when investing in carbon credits with co-benefits, mainly around quality and impact on communities and biodiversity. Not all projects are well designed; similar to how a low-quality offset can have a detrimental effect on the environment, a poorly designed project with co-benefits can negatively impact local communities and biodiversity.
Future frameworks could also influence how co-benefits are measured. Currently, the Task Force on Climate-related Financial Disclosures' (TCFD) recommendations are being codified by many financial regulators, including ones in the US and UK. If the Task Force for Nature-Related Financial Disclosures (TNFD) were to recommend a similar model, then businesses would have to publicly disclose their impacts on nature and biodiversity. As a result, corporations that invested in carbon offsets with poor co-benefits would be inviting public scrutiny and putting their climate claims and brands at risk.
It's not just climate action
At Sylvera, we evaluate a project’s impact on both community and biodiversity. These co-benefits are scored on the following factors:
We then aggregate these results into an overall ratings score from 1 - 5:
- 5/5 indicates exceptional progression on targeted UN Sustainable Development Goals (SDGs), as well as extraordinary species richness and high-quality activities to reduce pressure on biodiversity
- 1/5 indicates very limited progression on targeted SDGs, very low species richness and a lack of activities to reduce pressure on biodiversity.
Co-benefits are not part of Sylvera’s overall rating for a project, since the primary objective of our rating is to evaluate the project claims of GHGs being avoided or removed. For example, a high co-benefits score could inflate a rating, which would be an issue particularly when a project is underperforming in other key areas: carbon, additionality, and permanence. (Learn about our Rating System here.) Nonetheless, we are committed to assessing the impact of co-benefits because it provides a holistic view of a project. Not only does the Sylvera assessment help organizations identify high-quality offsets, but it also helps them understand the positive benefits projects bring to local communities and biodiversity.
We measure community co-benefits using the UN’s Sustainable Development Goals (UN SDGs). For every project, we identify which SDGs it best aligns to. A number of well designed nature-based projects are developed with SDGs, which our framework confirms and checks to what extent the impact. In addition, we also enable SDG/community impact to be compared across projects. This enables organizations to search for projects by specific SDGs and select ones that align with their wider ESG strategies.
We rate co-benefits on the scope, design and implementation of project activities that contribute to people-related UN SDGs and the impact is compared to progress at local, regional and national levels. A similar assessment is undertaken to understand the threats to biodiversity in the project area, and the impact of protective schemes implemented by the project.
Assessing and monitoring biodiversity is more difficult than carbon as it requires regular, detailed data from on the ground which can be an extensive, costly process. However, through our partnership with the Integrated Biodiversity Assessment Tool (IBAT), the world's most authoritative source of biodiversity data, we have access to vital biodiversity data that we incorporate to our carbon project analyses, including:
- species and habitat diversity
- monitoring tools in place in the area
- information on income diversification or improved agriculture to reduce pressure on biodiversity
- regional and national threats to biodiversity
Aligning more than one of your organization's goals
The opportunity to invest in tackling multiple sustainability issues with one carbon project can be a massive benefit for any organization, but this is only the case if the credit is high quality and can meet the claims set out by the project. Otherwise, there is a risk of negatively impacting biodiversity, people and the environment.
There are a number of factors that impact co-benefits and the quality of a carbon credit project. By conducting the proper due diligence, there is scope to invest in high-quality nature-based credits that aligns with your organization’s net zero goals and offers the potential to address other global issues.
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