Beyond carbon: Callirius’ strategic approach to environmental stewardship

More and more it is becoming evident among society that not all that glitters is green when it comes to claimed climate action. In particular, companies are struggling to obtain credibility from their customers and other stakeholders on the carbon projects they support to take responsibility for unabated CO2 emissions. This is why, in this new era of environmental stewardship, when every step counts, and the earlier, the better, ensuring effective impact is becoming the most important criteria in the financial contribution to climate change mitigation. 

Effective climate impact can be delivered from various project types, technology innovations, regulatory and policy efforts, initiatives and mechanisms. In this article we  delve into the so-called “sponsoring mechanism”, where public-private collaboration and blended finance are proving their worth.

What is a sponsorship project?

A sponsorship project, especially within the context of environmental sustainability, is a strategic partnership where companies or investors provide financial or in-kind support to projects that exist to achieve certain environmental benefits, such as carbon sequestration, biodiversity conservation and enhancement, livelihood creation, etc. These projects often focus on nature-based solutions to mitigate climate change, leveraging the natural capacity of ecosystems like forests, wetlands, and agricultural lands to capture and store carbon dioxide from the atmosphere (1). While both philanthropy and sponsorship can contribute to ecosystem restoration projects, they differ in their underlying motivations and the nature of the support provided. Philanthropy involves altruistic giving without an expectation of direct financial return, while sponsorship entails a partnership between a company or organization and a conservation initiative, often with mutual benefits for both parties.

When do sponsorship projects make sense?

Traditionally carbon projects follow a process of standardization through certification, validation and verification.  However, many carbon projects are created by non-profit organizations and therefore aim to optimize their resources. In addition, some of the adherence requirements set by many carbon project standards and recognized methodologies are difficult to reach by many effective, high-integrity projects. Thus, these projects cannot count on carbon crediting mechanisms to get the financing they need to be run over time. In these cases, sponsoring can be a critical alternative to enable true climate impact.

How do we ensure the quality and effectiveness of sponsorship projects?

Sponsoring carbon projects typically adhere to a methodological approach to quantify their environmental, social, and economic impacts. While standard certification offers a benchmark for these methodologies, some projects choose not to pursue it, often due to resource and monetary constraints. However, the absence of certification does not inherently diminish the potential impact of a project. In these scenarios, our team employs the Callirius Quality Framework (CQF) systematic approach to rigorously assess and verify the project’s actual impact. This framework encompasses a comprehensive evaluation of several key aspects and it also adheres to the principles of Natural Climate Solutions (NCS) which calls for NCS activities to be nature-based, sustainable, measurable, additional and equitable (2).
In accordance with the quality parameters outlined by the CQF and NCS principles, we conduct comprehensive assessments of projects. These assessments are made accessible to users, specifically corporate buyers and investors, through our project portal. They are presented in the form of Due Diligence Reports, summarizing key findings and insights.

How can sponsorship projects benefit companies? 

Companies and investors can engage in Beyond Value Chain Mitigation (BVCM) projects as part of their commitment to validated climate targets such as the Science Based Targets Initiative (SBTi). This way they contribute significantly to global efforts to reach net zero. BVCM allows companies to invest in climate change mitigation activities that fall outside their direct value chains. This initiative is designed to complement, not replace, direct emission reduction efforts within a company’s operations and value chain. By financing BVCM projects, companies can demonstrate a commitment to broader, global climate action and contribute to the acceleration of the transition to a net-zero economy (3). Sponsoring projects are generally eligible as BVCM contributions and can often be the only viable source of financing for such projects. Additionally, by sponsoring such projects companies benefit from incentives such as enhanced brand reputation, fostering stakeholder engagement, becoming environmentally responsible and it also enhances the sustainability of the business from negative climate impacts, vulnerabilities supply chain and improved access to natural resources.

So, how can a company communicate its contributions to impactful sponsoring projects? 

Company contributions to sponsoring projects  demonstrate leadership in climate action, driving innovation and a just and effective transition through support for initiatives that benefit communities and biodiversity. This complements internal decarbonization, showcasing comprehensive environmental and social stewardship. Moreover, by focusing on projects that advance climate justice and support the Sustainable Development Goals (SDGs), companies underscore their dedication to equitable climate action, benefiting vulnerable communities. Below are high-level steps that a company could undertake in designing and implementing a BVCM strategy (4):

• Step 1: Set and work on to deliver net-zero target
• Step 2: Establish a BVCM pledge
• Step 3: Take action to deliver BVCM
• Step 4: Report BVCM activities and outcome using MRV framework