Sustainability statement

To ensure both climate integrity and positive impact beyond climate, the sustainability-driven Compensate approach is built on 4 pillars.

1. Scientific evaluation

International carbon standards, such as Gold Standard and Verra, are not always a sufficient guarantee for good quality carbon projects, which is why Compensate applies its science-based evaluation criteria and selection process as a second certification layer on top of international standards.

We want to make sure that all projects that Compensate incorporates into its portfolio not only have a positive impact on the climate and are viable in the long term, but also enhance biodiversity, human rights, social justice, and wellbeing of local communities. To ensure credible offsetting claims, Compensate guarantees that the projects are not double-counted, e.g. do not issue carbon credits that have already been counted and claimed by the host country of the project. 

The criteria was created in collaboration with Compensate Foundation’s Network of Scientific Advisors and has been used since early 2020. Compensate has since screened over 150 mostly nature-based projects with certifications deemed industry staples. Less than 10% of these projects have passed the criteria and have been added to Compensate’s carbon project portfolio.

2. Portfolio approach

Like investment managers managing a fund to deliver the best value, Compensate creates and manages a diverse carbon project portfolio to deliver the best possible climate impact. This portfolio allows Compensate to maximize its clients’ climate return on investment into carbon projects. Naturally, diversification serves also as further mitigation against the risks associated with any given project. 

The portfolio is diverse and dynamic, making it possible to mix a wide range of project types with different prices, while regularly monitoring and replacing existing projects with even better ones. Currently, the portfolio consists of a selection of nature-based solution projects, including forest conservation, afforestation and reforestation, blue carbon, and biochar. The share of each project is determined by the Compensate estimate of its real climate impact and its price, allowing for the best impact-cost ratio.

80% of the portfolio focuses on established nature-based methodologies, including forest conservation and reforestation and afforestation projects. 20% is dedicated to innovative carbon capture methods like biochar, underwater carbon sequestration and engineered approaches to carbon removal. 

Compensate is committed to developing the portfolio according to the Oxford Principles on Net Zero Aligned Offsetting . The portfolio is already split 50/50 between avoided emissions and carbon removal projects. Compensate has also started to gradually phase out avoided emissions projects with short-lived storage. Increasing the share of both avoided emissions and removal projects with long lived-storage is also a priority in developing Compensate’s dynamic portfolio of carbon projects. 

3. In-built overcompensation

Compensate’s in-built overcompensation mechanism mitigates risks related to carbon projects and uncertainties in carbon footprint calculations, providing a more robust compensation claim compared to standard carbon credits.

In theory, each carbon credit sold on the Voluntary Carbon Market is worth one tonne of CO2. However, due to the many uncertainties in carbon projects, which are not always rigorously taken into account or mitigated, Compensate can’t be confident that one standard carbon credit really equals one tonne of CO2 either as avoided emissions or as CO2 removed from the atmosphere. 

Current market standards also often allow for projects to overinflate their climate impact, and even the best projects available have their flaws. Furthermore, as the risks involved with each project differ, standard carbon credits emitted by different projects do not have the same climate value and are not interchangeable. Standard carbon credits are thus a poor metric to quantify the climate impact of carbon projects. 

Compensate’s strict evaluation process includes scoring projects in order to estimate the real climate impact of one carbon credit. This results in a project-specific climate impact score. For instance, for a project with an impact score of 0.7, one credit is equivalent to 0.7 tonnes of CO2. In order to provide a robust offsetting claim, Compensate overcompensates by purchasing enough credits to reach a real impact equivalent to one tonne of CO2. This overcompensation mechanism is incorporated in the Compensate credit.

Compensate also offers the possibility to make a carbon negativity claim by adding a second layer of overcompensation. Those who have the capability to reach carbon negativity should opt for it, as we have a historical responsibility to remove more CO2 from the atmosphere than we currently emit.

4. Impact beyond climate

Unless sustainably operated, carbon projects can create negative effects on society and the environment. It is all too common to sequester carbon but destroy nature and hurt local communities at the same time. A ‘do no harm’ principle is not enough, and therefore Compensate is working to ensure we only operate with projects with a net positive impact on the environment, biodiversity, local communities, and other stakeholders. Compensate’s science-based project criteria is our main tool in ensuring these positive impacts.

Human rights, social justice, and local community wellbeing are of the utmost importance, and projects should not generate carbon credits at the expense of local communities, also often referred to as “carbon colonialism”. To uncover possible human rights violations, evictions and community conflicts, Compensate conducts desktop research reviewing scientific and media articles as part of the project evaluation process.

Compensate only selects projects that deliver unquestionable local community benefits and improve livelihoods. This is done by taking a closer look at the project’s benefit-sharing principles and the risk of possible social disparities.

Compensate makes sure that all the projects in its portfolio support biodiversity. The project’s net impact on biodiversity has to be positive, compared to the biodiversity conditions if the project did not exist. Compensate also ensures that the project has undertaken measures to mitigate negative impacts on biodiversity and for maintenance or enhancement of the high conservation value attributes.

With a diverse project portfolio, Compensate can guarantee that its projects support all the Sustainable Development Goals (SDGs) defined by the United Nations . ​​

This sustainability statement was last modified on April 13, 2022.