The Interplay of Double Materiality and CSRD
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by: Andrew Primo | October 11, 2023
On August 29, 2023, Verra, a Voluntary Carbon Market (VCM) registry, released a major update to its Verified Carbon Standard (VCS) program, changing and expanding a host of program aspects, including project risk assessment, credit labeling, stakeholder engagement requirements, social and environmental safeguards, and methodology development. The update represents the most considerable change to the VCS program in several years. As the largest VCM registry, developments at Verra can significantly impact the broader market, particularly for nature-based climate projects like reforestation and avoided deforestation.
Much of the update was driven by Verra’s efforts to align its VCS program with the Integrity Council for the Voluntary Carbon Market’s (ICVCM) Core Carbon Principle (CCP) Assessment Framework, published earlier this year to set standards for credit quality and reinforce trust in the market.
Verra has published a list of 54 updates in v4.5 of the VCS Program. We have summarized three of the most significant updates below:
Verra also published its first Paris Agreement Article 6 Label Guidance as part of the update, detailing which credits are eligible for use against a country’s Nationally Determined Contribution (NDC) to Paris Agreement goals. While the reduction and removal labeling system will only go into effect for projects listed after March 1, 2024, the Article 6 labeling conventions are active immediately.
Verra hosted a series of webinars from September 12-28, reviewing different aspects of the VCS Program update. These webinars will be made available to the public on Verra’s Events site.
About Verra’s Verified Carbon Standard
Verra is a nonprofit organization that operates standards in environmental and social markets, including a leading carbon crediting program, the Verified Carbon Standard (VCS) Program. The VCS Program drives finance toward activities that reduce and remove emissions, improve livelihoods, and protect nature. VCS projects have reduced or removed more than one billion tons of carbon and other GHG emissions from the atmosphere. The VCS Program is a critical and evolving component in the ongoing effort to protect our shared environment. Learn more by visiting here.
ClimeCo is a respected global advisor, transaction facilitator, trader, and developer of environmental commodity market products and related solutions. We specialize in voluntary carbon, regulated carbon, renewable energy credits, plastics credits, and regional criteria pollutant trading programs. Complimenting these programs is a team of professionals skilled in providing sustainability program management solutions and developing and financing of GHG abatement and mitigation systems.
Contact us at +1 484.415.0501, email@example.com, or through our website climeco.com to learn more. Be sure to follow us on LinkedIn, Facebook, Instagram, and Twitter using our handle, @ClimeCo.
The critical connection between plastic mitigation and corporate leadership
by: Leticia Socal | May 24, 2023
Part I of this blog series showcased the benefits of executing a baseline plastic footprint analysis. Now it is time to understand that the risks at stake are equally valuable.
Part II outlines the key metrics corporate leadership will find interesting when planning and budgeting for their plastic mitigation strategy. Once the scope and execution of a plastic footprint has been mapped, planning internal buy-in to implement mitigation actions is essential. Acting now is vital for corporations due to timely institutional changes and because circular plastic is still in its pioneer stage. Early and effective action will establish participants at the forefront of development and influence acceptance in the circular economy.
Costs of Non-Involvement?
Although variable and obscure, the costs of opting out of a plastic survey is risky and can be detrimental in its ever-changing landscape. According to The Minderoo Foundation, conservative, near-term (2022-2030) estimates of corporate plastic liability (US only) land at around $20 billion. This liability estimates ranges from bodily injury, property damage, and loss of shareholder value. And it’s not limited to the cost of liability from “misleading consumer statements” and greenwashing, expected to be penalized with “significant fines and sanctions.” 
Beyond liability, operational costs are considerable as well. A study by Pew Trust foresees companies operating at business-as-usual in the 2040s accruing $100 billion in virgin plastic taxes and/or responsible disposal fees with extended producer responsibilities (EPR) .
Comparatively, companies that chose to act today towards reducing their plastic impact and building a solid baseline would incur a fraction (~0.5%) of the costs of greenwashing litigation or an EPR non-compliance fee. Familiarizing leadership with this topic’s go-to advisory policymakers, insurers, investors, and corporate leadership would be wise to add to your to-do list.
The intangible costs are also notable, as seen in Part I of this series. Refusing to collect sustainability data on your products’ life cycle and overall footprint excludes vital product information from your operation—closing doors on opportunities to expand consumer messaging, innovate product design, diversify market offerings, and differentiate from the competition. Without knowledge, there is little to prepare for – plastic footprinting is a unique approach to understanding potential supply chain vulnerabilities (i.e., deforestation on ingredient plantations) and exposure to public criticism (political opinion on local vs. international labor).
Is the Market Demanding More Sustainable Products?
Making operational changes can be disruptive, laborious, and expensive. If cash flow is suffering, it’s easier to justify implementing product changes that take away time and energy from sales. Business owners typically want low-risk and high ROI. Fortunately, the data highlighting the impacts of performing an analysis or “pedicure” on your products and/or business is positive. A 5-year study by NYU showed that sustainability marketed products grew more than seven times faster than their conventional counterparts, selling at a 39% higher premium . The sustainability market can be considered recession-proof since this study was collected amidst the COVID-19 global pandemic . With all things considered, sustainability marketed products have continued to grow throughout the worst economic downturn since the Great Depression . This raises the question, is now the right time?
Who’s Holding You Accountable?
Failing to act before an official and legislative change is mandated will no doubt decrease the market effectiveness and opportunity to set yourself apart from competitors before it is streamlined and mandated. There is still time to perform a footprint analysis and implement changes before the United Nations (UN) Plastics Treaty is ratified in June and December 2023 .
If your company is one of the 18,000 that has disclosed to CDP (formerly Carbon Disclosure Project) for climate change, water quality, or forests in the past or funded by investors with a vested interest in public disclosure, thinking about your plastic impact may come down to bargaining with your financial support. In 2023, the CDP disclosure questionnaire piloted a new set of plastic-related voluntary questions under the Water Quality survey in a growing global response to plastic pollution disclosure and responsibility. These investors are forcing the hand of their companies, thus opening the floodgates of data needed for policymakers to make viable mandated solutions that drive actualized change . This top-down pressure will only increase as the Plastics Treaty makes headway. In the wake before US-mandated disclosure breaches the horizon, familiarizing your business with the conduct of disclosure is both wise and forward-looking.
The world is at the precipice of significant change—the role of plastic materials is at a tipping point, shifting in its value and applications. The United Nations Environment Programme approaches plastic circularity with three easy steps: eliminate, innovate, and circulate . The role plastic footprints play in larger mitigation measures and Environmental, Social & Governance (ESG) targets is just one step towards a more circular, efficient, and cost-saving operation, whether applied to events, concerts, products, or company offices or operations. Although new and sometimes misinformed, multiple data sources frame plastic mitigation and circular innovation as a sound investment, both operationally and financially. Now that you have the data to assure leadership to buy into plastic initiatives, congratulate yourself for being a thought leader towards corporate change with visible impact.
Understanding your impact is the first step towards change, and there are multiple options available for companies actively planning to meet their ESG targets.
Our global teams are ready to work with you – let’s connect, begin setting targets, assess and mitigate your plastic footprint.
 The Price of Plastic Pollution: Social Costs and Corporate Liabilities
 Breaking the Plastic Wave: Top Finding fo Preventing Plastic Pollution
 2020 Sustainable Market Share Index (nyu.edu)
 Risk of Global Recession in 2023 Rises Amid Simultaneous Rate Hikes
 The Great Lockdown: Worst Economic Downturn Since the Great Depression
 Plastic Treaty progress puts spotlight on circular economy
 Businesses encouraged to disclose plastics footprint through CDP for the first time
 Plastic Treaty progress puts spotlight on circular economy
About the Author
Leticia Socal is a chemist and seasoned plastic industry professional with over 15 years of experience spanning R&D, intellectual property, market research & strategy. Leticia is a certified TRUE Zero Waste advisor and a Blue Consultant. She holds a Bachelor of Science in Industrial Chemistry, a Master of Science in Materials Engineering, and a Ph.D. in Polymer Science.
by: Jessica Campbell | April 26, 2023
The scaling of Carbon Capture and Storage (CCS) globally is now widely accepted as necessary (rather than desired) when it comes to achieving net-zero commitments and the targets set out in the Paris Agreement. McKinsey & Company estimated that we need to reach at least 4.2 gigatons of storage per annum (GTPA) by 2050, which represents a growth of 120 times current activity level . Estimates by other groups, including the International Energy Agency (IEA), place the volumetric need anywhere between 3 – 10 GTPA to get us 5 – 10% of the way to net-zero. The International Panel on Climate Change (IPCC) has indicated that under ideal economic conditions, CCS has the potential to contribute between 15–55% of the cumulative mitigation efforts required to stay within 1.5 degrees. However, for this economic potential to be reached (i.e., to achieve economies of scale), “several hundreds of thousands of [carbon dioxide] CO2 capture systems would need to be installed over the coming century, each capturing some 1 – 5 MTCO2 per year” . This represents a deployment of projects and technology that is unprecedented in its rate and scale. All this to say, no matter which source you look at, the message is clear; we need tremendous amounts of geologic CO2 storage, and we need it at pace.
Despite the scientific consensus on the need for CCS, the path to implementing projects at scale comes with challenges. For one, the regulatory landscape of countries and jurisdictions to deploy CCS at scale are at varying readiness levels, with most falling in the ‘dismally unprepared’ category. Fortunately, there are many regions throughout Europe, the US, and Canada, where the regulatory frameworks are well developed due to decades-long oil and gas activity, including some dedicated geologic CO2 storage and its relative – Enhanced Oil Recovery (EOR). Even with more advanced regulatory frameworks, CCS projects still face a series of other challenges, including (but not limited to): 1. mineral rights ownership and disputes, 2. back-logs and long lead times for appropriate well permitting (i.e., Class VI in the US), 3. lack of CO2 transport and pipeline infrastructure, and 4. public opinion/acceptance.
The last one, ‘public opinion and acceptance’, often does not receive the attention it deserves as a potential disruptor and real threat to progress on scaling CCS. In just one example, an open letter to the US and Canadian governments was signed by over 500 groups in 2021, calling for a halt to all support for CCS projects . Due to the complex nature of our energy systems, how they interface with society, and an unfortunate history of ecosystem and environmental justice abuses, it should not come as a surprise that CCS is caught in the crosshairs given the size and the wide variety of potential applications for the projects, cross-sectoral and economy-wide. It will take a cohesive, patient, and relationship-based approach to help educate and repair some of the damage done. Unfortunately, it is a common misconception that CCS is a band-aid solution that will distract from the energy transition and investment in alternate fuels. The reality is that CCS will enable the energy transition, with the key word being transition. CCS will allow the production of lower-cost low-CI hydrogen and other alternate fuels needed to reduce emissions in hard-to-abate sectors. Short-term access to these fuels is critical to achieving emission reductions now and allows time for the supply of renewable fuels and energy sources to ramp up to meet the ever-growing demand.
Regarding environmental markets, CCS projects are considered an emissions avoidance rather than a removal since the CO2 never actually enters the atmosphere. Logically, the prevention emissions should be valued equally compared to removing them after the fact. Nevertheless, a false dichotomy occurs in the market, where removal-based credits are viewed as superior to (i.e., trading at 2–3 times the price) avoidance credits and activities. The value differential is a function of capital cost – direct air capture (DAC) and other carbon removal technologies and activities are currently more expensive to implement. Still, there is also a component associated with optics, which is unfortunate. Analogous to a bathtub full of water, the bath would never drain if one pulled the plug but kept the tap running. Removals are an exciting technology development associated with vital natural system restoration projects and activities. However, we are still too early in the energy transition to focus our attention too squarely on removals – we still need high-quality avoidance projects that have the potential to mitigate emissions on the gigaton scale, which includes CCS. As is a common theme throughout this blog, we need more of both, not either/or.
Despite the regulatory challenges and bumpy road ahead, hundreds of companies have either proposed CCS projects or are evaluating opportunities, including many of ClimeCo’s clients. In this valiant pursuit, ClimeCo has accepted the challenge and is working to support our clients through strategic advisory services and de-risking investment through partnerships and optimization of multiple potential revenue streams.
The recent changes to the Inflation Reduction Act (IRA) and the opportunities it has created for CCS are generally understood – albeit in theory. Projects that plan to sequester CO2 in secure, geologic formations can receive up to $85 per tonne of CO2 injected under the 45Q tax credit. What is often less clear are the opportunities for additional revenue streams, specifically within the voluntary carbon market (VCM), and the rules around stacking the various available incentives. Opportunities for value creation outside of the VCM arise from low-carbon fuel markets and green premiums for low-carbon products. How these fit together within an optimized organizational strategy while achieving broader emission reduction goals can be challenging to navigate. Although ClimeCo takes a holistic approach to value creation via all channels, the paragraphs below will highlight the recent developments that will open pathways in the VCM.
Historically, North America’s only VCM methodologies for generating carbon credits from CO2 sequestration activities were specifically designed for and limited to EOR. The absence of a methodology for geologic storage was just a symptom of the economic realities of pure geological storage projects – most would just not pencil at previous incentives levels, even with stackable carbon credits. However, the new IRA is a game changer, placing hundreds of millions more tonnes per annum within the realm of potentially economical or marginal. The VCM is ramping up to help projects falling in the ‘uneconomic’ or ‘marginal’ categories to be economic and to de-risk the investments by diversifying the revenue streams. The cost of CCS projects varies widely by industry. Those in hard-to-abate sectors have a particularly high cost of capture to low purity and/or concentration of CO2 streams. Fortunately, there will be at least one, if not two, new VCM methodologies available in the near term that will allow for the creation of voluntary carbon credits from CCS. This opportunity will be particularly advantageous for those in hard-to-abate sectors where the $85 per tonne alone is not enough.
The American Carbon Registry (ACR) is in the process of finalizing its methodology that would allow for carbon credits created from the following activities: geologic storage, direct air capture (DAC), EOR, and bioenergy with CCS (BECCS). We expect the methodology to be available by the end of 2023.
Verra is working with the CCS+ Initiative to develop a series of modules for CCS projects for credit creation in the VCM. Verra has indicated that the first module will allow for crediting of the same activities as under the ACR methodology; however, it needs to be clarified as to whether any negative emissions (i.e., removals) associated with BECCS will be included in the first release.
For organizations at various stages in the CCS project development journey, it will be necessary to understand all the potential revenue streams associated with the project, including voluntary carbon credits as well as other value-creation opportunities in low-carbon fuel markets, compliance markets, and additional government grants and funding and the associated value, risks, challenges, and optimization opportunities. It is also important to understand how utilizing the VCM fits within the broader organizational strategy, emission reduction targets, and a product’s value in the market (i.e., green premiums).
 McKinsey & Company, Scaling the CCUS Industry to Achieve Net-Zero Emissions
 Intergovernmental Panel on Climate Change (IPCC), Carbon Dioxide Capture and Storage
 Oil Change International, Open Letter to US and Canadian Governments
About the Author
Jessica Campbell, Director of Energy Innovations, leads ClimeCo’s CCS and Low Carbon Fuels Program. She is passionate about the power of utilizing environmental markets to expedite decarbonization goals and supporting our clients through the energy transition.
BOYERTOWN, Pennsylvania (January 25, 2023) – To enhance the sustainable management of nature and deliver environmental, social, and economic benefits, ClimeCo is excited to announce the acquisition of 3GreenTree Ecosystem Service Ltd. (3GreenTree). ClimeCo, a global sustainability advisor with a harmony of industrial and nature-based carbon solutions that meet the diverse needs of their clients’ climate programs, believes that resilient systems depend on locally derived and market-based solutions.
“We are delighted to add the depth and breadth of experience that 3GreenTree brings to ClimeCo,” says Erika Schiller, ClimeCo’s Senior Vice President of Project Development. “Our Project Development Team has been working with 3GreenTree on many opportunities to build carbon models, assess and manage risk, and deliver better turn-key projects. They are integral to ClimeCo’s growth and investment in carbon removals.”
Since 2008, 3GreenTree has developed environmental credits from forest carbon removal projects, generating maximum value and putting markets to work on the path to net-zero emissions. They’ve established an unparalleled reputation for excellence and quality service regarding emission reduction targets, project development, and natural resource analysis and modeling.
“With ClimeCo’s talent and resources and 3GreenTree’s leading-edge carbon expertise, we can now develop turn-key projects in new and important ecosystems,” says Clive Welham, ClimeCo’s new VP of Nature-Based Solutions (formerly 3GreenTree’s Managing Director). “Repositories of vast stores of blue carbon, such as mangroves, sea grasses, and tidal wetlands, are badly degraded or completely lost. Together, we will enhance our removal project efforts by contributing to climate change mitigation, water and food security, water pollution abatement, improved human health, biodiversity loss, and reduced disaster risk.”
ClimeCo is excited about the opportunities to capitalize on developments in the nature-based solutions space and is inspired to generate results that benefit people, the environment, and the climate.
ClimeCo is a respected global advisor, transaction facilitator, trader, and developer of environmental commodity market products and related solutions. We specialize in voluntary carbon, regulated carbon, renewable energy credits, plastics credits, and regional criteria pollutant trading programs. Complementing these programs is a team of professionals skilled in providing sustainability program management solutions and developing and financing of GHG abatement and mitigation systems.
For more information or to discuss how ClimeCo can drive value for your organization, contact us through our website climeco.com. Follow us on LinkedIn, Facebook, Instagram, and Twitter using our handle, @ClimeCo.