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CIFB: Five Key Insights From Carbon Market Leaders

Aspiration's leadership team recently attended the Corporate Investments in Forestry & Biodiversity (CIFB) event, where they traded insights on the carbon market’s latest trends and themes with a diverse group of investment pros, corporate sustainability trailblazers, and project developers.

The event was a breath of fresh air, featuring a smaller, tightly-knit crowd, all eager to learn and share. Both days were jam-packed with engaging sessions, including talks from innovative private organizations taking steps to build carbon programs into their core operations – making a real impact, at scale and with a level of speed others can’t.

We left the event reminded of the essential role carbon credits play in driving positive environmental change, and a renewed focus on facilitating the transition to a net-zero economy. Here's the scoop on our key takeaways:

Key Takeaways

1. Biodiversity credits (biocredits) should not be considered offsets, regardless of the certification methodology. Verra's draft methodology on nature crediting framework is expected to come out in early 2024, and while we’re eager for its arrival, it's essential to not pressure standards to work faster as it could lead to suboptimal outcomes.

2. A new standard called the Ecosystem Restoration Standard (ERS) is hoping to fill the niche of smaller-scale nature restoration projects and boost transparency by using tested digital monitoring, reporting and verification (dMRV) systems.

3. Most corporations are willing to pay a premium for high-quality carbon credits, but they need guidance navigating the market's complexity and staff to conduct proper project due diligence.

4. The insurance industry is catching up to the carbon market, and when carbon becomes an asset class, insurance might provide another stamp of quality (insurable vs non-insurable projects).

5. Credit rating agencies, though not perfect, play an essential role in the project vetting process.

Two members of our leadership team, CEO Olivia Albrecht and Head of Investments Zach Goldstein, presented at the event. Their talks, titled “Carbon Solutions at Scale” and “Project Funding and Finance,” respectively, offered insights into the emerging and ever-changing world of the voluntary carbon market.

Olivia's eye-opening presentation on nature-based solutions (NBS) at scale emphasized three critical takeaways that underscore the challenges and opportunities in this evolving field. She underlined the substantial funding gap for NBS and the need for investors to recognize the growing demand. This awareness would enable better risk assessment and inspire companies to commit to long-term plans for purchasing high-quality credits.

Olivia also explored the crucial role of talent at registries, urging stakeholders to support these organizations to ensure growth and meet the expanding market's needs.

Zach's panel honed in on educating investors about offtake agreements, project financing, and the importance of tracking and aggregating project information. He also discussed the potential benefits of incorporating co-benefits into carbon projects to attract more investment. However, he warned that haphazardly undertaking these investments poses severe financial, reputational, and regulatory risks. That’s why they need a trusted partner who can guide them and protect them through long-term offtakes.

In a nutshell, CIFB was an enlightening event that provided insights into the latest trends and themes in the carbon market. Our leadership team left the event feeling more informed and optimistic about the level of funding that is pouring into this crucial market. We’re excited to continue evolving project financing and expanding co-benefits, and we look forward to participating in similar events in the future.