Binding environmental and social standards (E&S standards) are an essential tool for ensuring that projects on the voluntary carbon market are designed in a socially responsible way and do not have adverse effects on the local environment. By specifying requirements for project design and implementation and the structure of reporting obligations, risks can be identified in advance in line with the precautionary principle, assessed, and minimised through appropriate project adjustments. By specifying processes for project implementation, it can also be ensured that any remaining risks are managed effectively, considering local stakeholders‘ interests.
E&S standards come from a long tradition of development cooperation and have been continuously updated based on experience in their application. Today, the Performance Standards of the International Finance Cooperation (IFC) are considered the guiding framework for robust E&S standards, which are also used as a basis for the sustainability guidelines of the KfW Development Bank (KfW Sustainability Guidelines).
Voluntary carbon market projects often have a similar implementation structure to officially funded international development cooperation projects and take place in comparable local contexts. In addition, a positive contribution to sustainable development is often a central part of their objective. Therefore, it is important that these projects also meet strong E&S standards. The responsibility for setting such E&S standards lies with the certification programmes, which define the overarching rules that project implementers must follow.
This study analysed the extent to which the E&S standards of the certification programmes are comparable with regulations classified internationally as exemplary reference standards. For this purpose, these standards were checked for compliance with the IFC Performance Standards and the KfW Sustainability Guideline. This study is an update to an analysis already carried out in 2020. This results from the amendment of the KfW Sustainability Guideline in 2023 and new regulations for individual certification programmes about their E&S standards. At the same time, other certification programmes that were not the subject of the 2020 study were included.
Here you can find the “Gap analysis on the environmental and social standards of certification programmes in the voluntary carbon market” and further studies.
