How we build high-quality carbon removal portfolios
The carbon credit market can be overwhelmingly complex. Cawa simplifies access to carbon credits by doing the heavy lifting for you. We have analyzed over 250 climate projects to date and created a high-quality portfolio. Let's dive into how we select our projects.
Rigorous project selection for a high impact carbon removal portfolio
Climate projects analyzed
Key criteria assessed
Projects selected
01. Quality standards
We only select projects from the most rigorous quality standards in the world (e.g. Verra, Gold Standard and Puro.earth). All standards that the projects we offer use are endorsed by ICROA.
ICROA is an organization that provides a range of criteria for standards, such as on good governance, validation/verification and carbon credit registries. The assessment on these criteria is performed by a third party.
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02. Project-level analysis
The Cawa team conducts desk research based on the documentation on the carbon credit registry and then follow-up directly with project developers to fully assess each project’s impact.
Our project selection methodology is based on 4 key topics: (i) robust determination of the emissions impact, (ii) avoiding double counting of removals, (iii) addressing non-permanence, (iv) environmental and social impacts.
03. Third-party checks
We perform a KYC check for each project developer, review carbon credit ratings, check press coverage on the projects and speak to external carbon removal experts where needed to make sure the project and the project developer are credible.
04. Portfolio development
Our carbon credit portfolios are designed to optimize the impact of your investment and reduce risks. We have pre-set portfolios aligned with for instance the Oxford Offsetting Principles, but we also deliver tailor-made portfolios to meet clients' needs.
Read more on our selection methology
Robust determination of the emissions impact
- Additionality: the key question here is: would the project have happened without carbon finance from selling carbon credits? Some projects have other sources of revenue and if the carbon finance only accounts for a small percentage of the total revenues, it is more likely that the project would have happened anyway.
- Price: we check whether the pricing is in range with similar projects. A second question is what happens to the carbon credit revenue. Projects that share the profits with the local community or landowners have higher chances of success due to the local commitment.
- Robust quantification of removals: in the project documentation we check how the carbon impact of the project is calculated and how this is validated in the Validation Reports.
- Negativity: for any project it’s key to include the emissions that occur while running the project, which can be very direct (running a biochar plant for example) or more indirect (flying to the project site).
- Vintage: per project type we look at the vintage of the carbon credits that are issued and whether these vintages are in line with best practices.
Avoiding double counting of emission reductions or removals
- Avoiding double issuance: for carbon credits to be effective they should only be listed at one VCM standard and the same tonne of CO2 is not listed twice.
- Avoiding double claiming: the carbon benefits of the climate project should not be claimed by other actors (such as governments for their national carbon goals).
Addressing non-permanence
- Significance of non-permanence risks: all project types have a certain risk of reversal, but to different degrees. Specific location and project factors can increase this risk, for example for afforestation: the risk of a natural disaster or illegal logging.
- Robustness of approaches for addressing non-permanence risks: knowing that these risks exist, what are the measures that the project developer has taken to decrease these risks and/or manage their effects when they occur?
Environmental and social impacts
- Sustainable development impacts of the project type or project: next to the carbon impact of the project other SDGs might be impacted, so we’ll look into those effects and ask for a quantification of the effect.
- Contribution to improving adaptation and resilience: some projects help to make the local environment more resilient to the effects of climate change, which is a clear added benefit of the specific project. In general these effects occur more with nature-based projects (afforestation for example) than with technological solutions (like direct air capture).
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