Gold Standard, the standards and certification body known for its work in carbon offsetting, has this week launched a new scheme based on the Sustainable Development Goals.
The “Gold Standard for Global Goals” offers businesses, governments and investors a way to recognise and support initiatives that work towards achieving the SDGs. The standard is expected to open up new avenues of funding for green infrastructure and sustainable supply chain interventions. A major part of this, the Urban Development module, was developed in collaboration with Climate-KIC’s urban climate finance programme, Low Carbon City Lab.
Daily Planet spoke to Gold Standard Chief Executive Officer Marion Verles to find out how the standard will help measure, report and track SDG-related projects around the world.
Daily Planet: Why has Gold Standard begun issuing a range of certified Sustainable Development Goal (SDGs) impacts?
Marion Verles: Since the day we were founded, our mission has been to bring environmental sustainability development requirements to the carbon markets. A couple of years ago, we looked at the strengths we could build on to contribute to addressing some of the world’s biggest challenges, and what we identified was a very strong need to deliver solutions to quantify impacts.
The only way we can know if we’re on track to achieve a 1.5°C world and the Sustainable Development Goals is if we can actually assess how much each project, how much each investment, how much each policy, how much each decision is contributing to achieving those goals. We can only monitor and track progress if we are able to quantify impacts.
As a standards body geared to quantifying climate and sustainable development impact, we felt we could make a meaningful contribution if we worked to bring some of the expertise we had developed for carbon markets to quantifying sustainable development impact.
DP: How does the Gold Standard for the Global Goals build on previous work?
MV: The new standard is both an evolution and a revolution. It’s an evolution because we are building off the existing standards that we’ve been managing. Rather than continue to manage four different standards in parallel, for energy, forestry, agriculture, and cities, we’ve integrated them into one platform.
Rather than have to replicate every single change across the four standards we only have one platform. Every single improvement, enhancement or innovative solution will be applicable across the board.
It’s also a revolution because the standard is proposing a number of innovations that are first of their kind. Since the beginning, every Gold Standard project had to demonstrate contribution to three sustainable development objectives. The Millennium Development Goals was the benchmark to defining sustainable development, and now we’re using the SDGs, but that contribution to three objectives was always there.
What makes Gold Standard projects so different is that we are not only talking about the positives. The requirements that are in the standard make it necessary for projects to also mitigate the negatives.
As science moves forward and as we uncover new connections and new interactions between development objectives. We are updating our standard so that it always remains up to date with latest science and the latest thinking around integrated approaches, holistic design and holistic impact.
DP: The new standard is measuring many inter-related things simultaneously. How do you take into consideration negative cross-impact and trade-offs?
MV: To become a Gold Standard certified programme, you have to go through a process which covers a number of steps, including the management of negative impacts. Depending on the intervention, we would pre-select some of the negative impacts that you have to look at. There are also specific trade-offs that we make mandatory for those who seek certification to actively investigate and manage.
Once you’ve been through that process you’re deemed eligible to become a Gold Standard certified programme. That’s when you can actually start quantifying your impacts. You can use our impact quantification methods, or you can propose your own methodologies if it’s for reporting purposes. We require at least three, covering the environmental, social and economic impacts of sustainable development.
For example, in a large-scale waste management programme in an urban context, we would look at climate mitigation from avoided methane; economic impact associated with the management of the waste that would create jobs and a value chain of waste management companies. A third social impact might enhance people’s living conditions by taking waste out of the streets.
DP: How did Climate-KIC’s Low Carbon City Lab help you build the Urban Development module under the new standard?
MV: We worked with Climate-KIC on the application of the new standard in urban contexts. We developed specific guidelines and requirements for sustainable urban development programmes to make sure the requirements for the standard are fit for purpose.
One value proposition is that the standard is a way to de-risk a large scale investment in a low-carbon urban development programme. The standard would ensure that the programme is following international best practice, has the right management practices in place, that it went through appropriate stakeholder processes, and has identified and managed a negative impact. From an investor perspective, investing in a certified programme is a way to de-risk your investment.
Also, the ongoing monitoring of the programme following Gold Standard requirements will give an investor access to impact data that is credible, because it is third-party verified. It’s comparable because the impact data follows the SDGs as a framework.
On top of that, if the project is eligible, impacts could be monetised through [for instance] issuing credits or renewable energy certificate labels that would unlock additional funding for the programmes.
You could even structure social bonds. If the programme is improving air quality in a city, you may have an investor or a city government that wants to pay X for each unit of health impact that is being delivered. You could use that certification to go beyond reporting and actually monetise those impacts and unlock new sources of funding for the programmes.
We’ve also been looking at what could be the type of resource-based finance structures that would be most relevant in that context — who would the players be that we would have to involve and how would it take shape?
DP: What’s the outlook for the Urban Development module?
MV: The expertise and the Climate-KIC network of partners has been extremely valuable to us. We are now in discussions with a few investment funds that are looking at making massive investments into sustainable urban development programmes. They want to use our standard as a platform to roll out their due diligence requirements, their monitoring requirements, and also look at unlocking specific resource-based finance through carbon markets, renewable energy markets or other impact-based markets.
DP: Who else is working in this space?
MV: I think there are other standards that overlap on one of key value propositions but none of them overlap on all of them. The leading voluntary carbon standard from a market share perspective is the Verified Carbon Standard, which has over 50 per cent of the market share. You have some standards that don’t quantify carbon but that are used as an add-on to a carbon standard and they would only look at the sustainable development aspects like social carbon.
We’re the only platform that provides a one-stop shop solution that is not a one-size-fits-all because we can be tailor-made to your needs. For us it’s driven by our mission and the very deep conviction that if we are to meet our 1.5°C target, the only way we can get there is by embedding sustainable development considerations in every single climate-related decision and intervention.
Those two agendas cannot be tackled separately. If we fail one we will fail the other.
Climate KIC’s Low Carbon City Lab (LoCal) aims to reduce global greenhouse gas emissions by 1 gigatonne per year and unlock € 25 billion worth of climate finance for cities by 2050. The platform’s partners provide cities with better tools for assessing greenhouse gas emissions, planning, investing and evaluating progress towards a low-carbon future.