A new tool that will provide transparency and confidence to carbon projects was announced at the closing of the Latin American Climate Summit held in Panama, as one of the bets to face the challenges of the Carbon Market in 2023.
A tool that guarantees transparency and trust
It is a tool formulated by ALLCOT, with the support of the voluntary carbon certification standard CERCARBONO, through which project developers and related groups will be able to report on the governance, financial and sustainable performance of offset projects and climate change mitigation programs in a standardized way.
This report will be a best practice that guarantees project stakeholders, with emphasis on communities and investors, the proper management of financial flows, financial and non-financial risks, benefit sharing, project risk management and the quantitative impact of the Sustainable Development Goals (SDGs) established in the project planning and monitoring plan.
Transparency in the carbon market
According to Alexis Leroy, CEO of ALLCOT, “this is a disruptive tool that allows us to build confidence in the market and demonstrate that carbon credits are a financing tool that have a real impact when done in a transparent manner”.
The announcement was made by Alex Saer, CEO of CERCARBONO, who assured that “this innovation will change the current dynamics of the carbon market and is expected to be incorporated in all projects that CERCARBONO will implement”.
The tool’s current state
This tool is in the experimental stage and was designed so that annual reports can be made regardless of the stage of the project, from pre-feasibility to verification and certification.
Among the advantages of its use is that funders will be able to know if the resources are being invested in quality projects. It will also provide information on how the benefits reach the projects, how they are distributed and the use that the communities make of these resources. Saer added that “the application of the tool for reporting financial transparency and sustainable performance of offset projects will provide project holders with a certificate of financial transparency”.
“The idea behind the report and the tool is to overcome the barriers that the carbon market has faced in recent years, demonstrating transparency to different types of stakeholders, but especially to the communities and investors that are involved in these projects,” explains Alexis Leroy.