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Introducing Carbon Credit Analytics

May 16, 2023

The voluntary carbon markets (VCMs) are growing rapidly with an increasing number of new market entrants needing data to make informed decisions. Sylvera’s Carbon Credit Analytics helps new and experienced market participants analyze and compare the quality of retirements across more than 8 registries/standards, and match over 500 million retired credits to 1400+ companies. The platform also enables users to de-risk their carbon investments and optimize retirement strategies.

Lack of clarity in the VCMs

VCM participants are confused because there is no structure, no requirements around disclosure, and when data is disclosed, the quality is poor. This means market participants rarely know what carbon credits are purchased by companies, and the lack of transparency leads to a lack of certainty and confidence in navigating the carbon markets.

Market participants need a solution to make sense of the market, navigate it and gain clarity and confidence in making critical decisions for their credit investments. Carbon Credit Analytics enables users to review project, country and project type (REDD+, Renewables, etc.) diversification to better evaluate trends in portfolio composition across companies and industries. 

“A platform like Carbon Credit Analytics gives us the sort of information that I could never manage to gather on my own.” —Charles Bedford, Chief Impact Officer, Carbon Growth Partners

What is Carbon Credit Analytics? 

Sylvera’s Carbon Credit Analytics enables you to analyze and compare the integrity of carbon credits portfolios and review project, country and project type diversification to better understand preferences and trends in portfolio composition across 1450 companies and 70 industries. 

To learn more about how Carbon Credit Analytics can help you build an effective carbon credit portfolio based on the latest market trends and retirement activity, book a demo now.

What does Carbon Credits Analytics do? 

With access to information about the quality and composition of carbon credit portfolios across companies and industries, Sylvera customers will be able to:

  • Understand portfolio composition and diversification across countries, carbon projects and project types
  • Use the latest retirement data to better understand carbon credit demand across companies and industries
  • Optimize resources and gain efficiency in evaluating carbon credit retirement data
  • Track and compare retirement performances of peers, suppliers and customers
  • Build effective carbon credit portfolios based on the latest market trends and retirement activity

Carbon Credit Analytics allows the user to review the quality and composition of portfolios of carbon credits to understand preferences, portfolio diversification and future demand across companies and industries.

How we built CCA

In a nascent, unregulated, and fragmented landscape such as the voluntary carbon markets, where transparency and infrastructure have historically been lacking, it is often difficult to access and consolidate key information that can be crucial in the decision-making process. This is the fundamental market problem that Carbon Credits Analytics was designed to address. 

Discovery Process

To ensure CCA would deliver the most value to the market, we embarked on an iterative and collaborative process. We consulted nearly 50 customers and prospects over a six-month period. Our team regularly checked in to discuss if and how the data we were collecting and analyzing was helping to address the lack of transparency in the market. These conversations led to the creation of a proof of concept (POC), which was thoroughly tested with customers and partners over a two-month period.

Data Sources & Data Logic

There are four data sources feeding into Carbon Credits Analytics: 

  • Retirement data from registries such as Verra, Gold Standard, American Carbon Registry, Climate Action Reserve and the EcoRegistry
  • Data from Climate Disclosure Project (CDP), which identifies retirements across standards such as the: Clean Development Mechanism, PlanVivo, The Emission Reduction Fund of Australia, and Puro
  • Data from companies’ sustainability, annual and/or ESG reports 
  • Sylvera proprietary carbon credit rating frameworks to assess portfolio quality

The registries and CDP retirements have limitations, such as the fact that the data is self-reported; therefore, there’s a likelihood that the information disclosed can be inaccurate, partial and/or inconsistent. Before processing and feeding this data into the product, we go through a rigorous process of cleaning and standardizing the data from these sources. Despite the aforementioned limitations, we believe the combination of both data sources enables us to capture the most complete picture possible of the carbon credits portfolio composition across companies in the market.

What is retirement data? 

Carbon offset retirement data refers to the carbon credits that companies have purchased and retired to make emissions reduction or compensation claims. The data consists of the carbon projects from which the credits were issued, the number of carbon credits retired, and the date they were retired.

While the registries and CDP retirements provide vast amounts of information, they have limitations and differ in terms of completeness. Retirement data from CDP may come in varying formats, which requires work on our end to parse and organize. Nevertheless, because the data coming from the company (buyer) and CDP questionnaires are incredibly thorough, we find CDP a much richer source of carbon credit retirement data than registries. With registries, data is less complete, and it is not always possible to match retirements to the companies who purchased/retired the credits. Therefore, we use CDP as a primary data source for retirements in Carbon Credit Analytics and enrich it with registry data.

For more information on the data sources and the logic applied to the product, read our white paper.

What are some of the early insights?

While the data in the product will constantly be updated as new retirements are captured, here are some of the initial disclosure and retirement insights below: 

Disclosure insights 

  • 80% of companies disclosing on CDP and buying carbon credits also have emissions reduction targets.
  • While all CDP disclosures have retirement volumes matched to a company, only 60% could be matched to a carbon credit project, reflecting the inconsistency of disclosure and the difficulty of accessing accurate retirement data.  
  • 87% of companies disclosing on CDP and registries also publish sustainability and/or ESG reports. However, only 3% provide details on their voluntary carbon market activities, and 5% provide information contradicting their CDP or registry disclosure. 

Retirement insights 

  • The average rating of carbon credits retired from 2017 to 2023 across all companies fluctuated between BB and BBB (Sylvera’s highest ratings range from AAA to BBB). 
  • Air & Transport and Thermal Power Generation are the top two industries that have retired the largest volume of carbon credits since 2017.
  • From a country perspective, projects in India have the highest volume of retired carbon credits. 

Who can benefit from Carbon Credit Analytics?

With access to data on carbon credits portfolio integrity, composition and diversification across companies and industries—

  • Brokers, traders, and other intermediaries can refine their sales strategies and find prospective customers.
  • Consultancies can successfully advise clients on net zero or decarbonization strategies.
  • Financial services firms can get full visibility into their investments and clients’ carbon credits portfolios.
  • Corporate Sustainability Teams can confidently benchmark, de-risk their carbon credit investments and build better portfolios.
  • Fund Managers can get a deep understanding of carbon credit risk exposure.

Here’s what our customers are saying:

Sam Jackson, Senior Climate & Environment Impact Manager, Ecologi

“The market is obviously getting a lot bigger and more people are engaging with the VCM than ever before. The registries are designed to be very transparent, which they are, but you’ve got to know what you’re looking for and know you’re way around a registry—for example, what credits are and what vintages are and the way the information is formatted can feel very opaque if you’re not very clued in on how it all fits together. There wasn’t anywhere where all that information was aggregated before Carbon Credit Analytics. Knowing what credits a company has been retiring and what kind of credits they’ve been retiring is super important, because it means that you can benchmark yourself and what you're doing against a standard. I think it will help to up-skill an entire industry.”

Charles Bedford, Chief Impact Officer, Carbon Growth Partners 

“A platform like Carbon Credit Analytics gives us the sort of information that I could never manage to gather on my own. All I could manage to get is a set of anecdotes about corporate preferences and market trends, but with this kind of tool I can understand the entire market in a much deeper way. The platform provides a set of additional robust data around the consensus in the market, about what’s good and what’s not. This helps to drive the sort of change and further investment into the types of projects that are good.” 

Data Caveat

As explained previously, the registries and CDP retirements have limitations. The current quality of the data in the product is a direct reflection of the quality of disclosures in the market. In other words, because disclosures are not universally consistent, thorough, or required, the data is neither universally consistent nor thorough. As the quality of carbon credit retirement disclosures improves, these limitations will be progressively mitigated. However, until then, the data in Carbon Credit Analytics should be seen as the best estimation of retirement activity in the market, rather than a complete and fully accurate view of retirement activity in the market. 

What comes next: 

We also plan to expand the product features so that users get maximum utility. Some future features include:

  • Data export capabilities: The ability to export data on companies’ portfolio composition
  • Companies Decarbonisation paths: Data on companies’ decarbonization and NetZero paths, the risk and the likelihood of achieving their emission reduction targets
  • Notification system: Automated alert when the data points are changed or added

The quality of the data on the platform will continue to improve over time to ensure our customers get the most valuable and robust information. We believe all players in the voluntary carbon market have a collective responsibility to address and solve the lack of transparency in the market to scale and reach its potential. The product insights shared suggest a lot more can be done to improve the quality of disclosure. Easy actions to make strides towards this goal are: 

  • For companies disclosing on the registries: Greater transparency on who benefits from the retirements.
  • For anyone disclosing on CDP: Greater accuracy and transparency by including project-level information about the issued credits.

The above actions alone will not solve the problem however, we are committed to partnering with market participants to improve the quality and accuracy of the data and solve this problem. 

To find out more about how Carbon Credit Analytics can help your organization de-risk your carbon investments and optimize your retirement strategies, contact us now.
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About the author
Senior Product Manager

Larsen Mabika is a Senior Product Manager at Sylvera. He holds a masters degree in Business Administration and Strategy from Linkoping University in Sweden and a bachelor's degree in Business Development from Escem Business School in France. Prior to Sylvera, Larsen worked at IHSMarkit (Now S&P Global) in various roles across the Financial Services and Energy and Natural Resources departments.