Our ambition is to lead the way in carbon project risk management, quality and compliance protocols.
At South Pole, we are deeply committed to fostering trust and integrity across the carbon market. For us, integrity is not a theoretical concept, it is the fundamental principle guiding our actions at every stage of a carbon project, from project initiation through to implementation on the ground and quality control.
All our projects follow international carbon certification standards and their stringent quality requirements. On top of that we have incorporated a market-leading quality management framework that goes beyond the requirements set by the standards. Our independent, in-house risk team defines our framework and oversees its effective implementation across all stages of our project work. Here's how we uphold this commitment:
As a Carbon Asset Developer, since 2006 we have worked hand-in-hand with on-the-ground project stakeholders, supporting the delivery of tangible climate action. Our on-the-ground experience alongside the project partners provides us with a deep understanding of the daily complexities, changing local conditions and social contexts and evolving technological possibilities.
Our experts collaborate closely with project stakeholders to foster best practices and deploy innovations in project design and management, community engagement and data collection. This ensures that traditional knowledge is respected and integrated into carbon activities.
We follow a holistic approach that looks beyond the verifiable climate impact and encompasses broader environmental and social aspects.
Our quality criteria are:
At the core of our holistic approach to quality and integrity is our rigorous nine-step Quality Control process. This includes a comprehensive assessment of the likelihood and impact of risks associated with our five quality criteria, along with Know Your counterparty (KYC) database screenings.
South Pole supports third-party ratings to enhance transparency in carbon credit quality and potential associated risks for buyers and stakeholders. These carbon project ratings help improve overall transparency in the market and provide buyers with important insights into the factors and context behind carbon credits and the projects that issue them.
This is why South Pole engages third-party ratings agencies to perform independent reviews of selected projects, to further enhance risk management across its global project portfolio. The analyses and ratings of third-party carbon ratings agencies represent one important input to complement our internal assessments.
We are committed to helping our clients understand the complexities of carbon projects and the nuances that make up credit quality and integrity. We provide transparency to our clients and partners by:
South Pole leadership is made up of recognised leaders with decades of robust experience. We also recently announced the launch of the South Pole Strategic Advisory Board, responsible for helping us and the broader climate and business community navigate the next phase of transformation across global carbon markets, and drive innovation across our climate solutions.
Aligned with best practices of regulated industries, we have set up an in-house, independent risk function in charge of defining our quality management framework and overseeing its effective implementation. Our Chief Risk Officer sits on the Executive Committee and is accountable to the Board-level Audit & Risk Committee for effective risk oversight.
Learn how buyers can confidently engage with the evolving carbon market by downloading your copy now and adopting high-quality, integrity-driven practices.
Unlock carbon market confidence Learn what are high-integrity carbon credits, who sets quality and how South Pole helps. Read our blog series on this topic, starting here.
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Our projects are assessed against the following key quality criteria following a risk management approach:
Additionality addresses the question of whether the emission reductions or carbon sequestration achieved by a project are genuinely additional to what would have occurred in the absence of the project.
Determining additionality involves evaluating whether the project's activities go beyond what would have occurred under a baseline scenario without the project, considering challenges like technological, financial, and regulatory barriers.
This addresses the risk of a project to issue more carbon credits than the amount of tonnes of CO2e avoided or reduced. Over-crediting can result from flaws in the methodologies used to estimate or measure emissions reductions, such as inaccurate baseline calculations or unreliable monitoring methodologies. To assess the risk of over-crediting, we are reviewing if the overall process of measuring, tracking, and reporting a project's carbon emissions and reductions meets the quality requirements defined by the standards, and we complement this with additional checks such as assessing the robustness of the selection of reference regions, the use of conservative values and a properly defined baseline, among others.
This relates to the long-term storage of carbon dioxide or the permanent reduction of greenhouse gas emissions achieved by a project. Our approach is to assess permanence by considering internal and external factors. Internal factors mainly relate to the project proponent's capacity to implement and maintain the project activities in the long term, while external factors relate to natural disasters, unstable legal environments and socio-political stability in the project country. This risk of non-permanence is particularly relevant for projects such as afforestation or reforestation, where the stored carbon could be released back into the atmosphere due to various internal or external factors. A typical mitigating factor is a buffer pool of carbon credits to account for these potential reversals.
These are policy measures designed to mitigate negative impacts on communities and ecosystems while ensuring that carbon projects achieve their intended climate benefits.
These are additional social, environmental, and economic benefits that carbon projects generate beyond their primary goal of reducing greenhouse gas emissions. Co-benefits contribute to the Sustainable Development Goals by creating positive impacts for communities, ecosystems and economies. Examples of co-benefits include creating jobs, improving health, increasing food and water security, and strengthening community infrastructure. The main risk with co-benefits is that claims that are not properly monitored and verified.
We conduct adverse media screenings to identify any reputational risks associated with the project or its key stakeholders.
We review more than 100 aspects relevant to carbon quality, such as additionality, carbon accounting and permanence.
We review social & environmental safeguards, such as policies which aim to prevent human rights violations, relocation of communities, inequitable benefit sharing or negative biodiversity impacts. In addition, we review the co-benefits of a project and assess the risk that claims are not properly monitored and verified.
Our technology experts from our independent risk function carry out an in-depth assessment of the carbon and social & environmental aspects. This leads to an evaluation of the impact and the likelihood of potential risks against our five quality criteria.
We utilise industry-leading Know Your Counterparty (KYC) software to screen business partners against sanctions, watchlists, politically exposed persons, adverse media and potential violations of United Nations Global Compact principles. We collaborate with local compliance partners to provide enhanced due diligence support whenever the need arises.
For projects where South Pole is the carbon asset developer, we engage with the project partners to obtain additional information as required. This is part of our ongoing engagement with projects to monitor progress.
Final review and validation of all findings by our independent risk team. High-risk profiles require approval by a designated committee to ensure rigorous oversight.
For projects where South Pole is the carbon asset developer, our experts develop mitigation action plans based on the results of the assessment, with the aim of improving the project's risk control mechanisms.
All our projects are periodically monitored against our quality criteria and regularly reviewed for compliance with any updates of methodologies.
