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Image of an upwards trending line chart. Buyers pay more for carbon credits with SDG claims

Buyers pay more for carbon credits with SDG claims

  • Akina Wong
    Research Associate, Beyond Carbon
  • Julia Mackey
    Beyond Carbon Analyst
  • Torrey Sanseverino
    Senior Research Manager, Beyond Carbon
  • Natural Capital
  • Ratings
Carbon projects in the voluntary carbon market (VCM) often contribute towards the United Nations Sustainable Development Goals (SDGs). The SDGs are 17 goals established by the United Nations in 2015 to target social, environmental, and economic conditions worldwide. In 2023, 64% of all issued credits made SDG claims. Progress towards achieving the SDGs by the 2030 deadline is stagnating, with approximately half of all SDG targets severely off track.¹ However, the VCM can stimulate finance to boost SDG progress. BeZero research shows that buyers are willing to pay price premiums for carbon credits with SDG claims where related ‘beyond carbon’ contributions are most likely. For example, credits issued by projects of high carbon quality, projects in sectors that often have impacts on communities (such as Household Devices and Nature-Based Solutions), and projects located in regions where national SDG progress is relatively low such as Sub-Saharan Africa can command high prices. However, it is difficult for many market actors to make sense of the true SDG impacts behind these claims; BeZero’s ‘beyond carbon’ research increases the transparency of such SDG claims.

  • Higher carbon credit prices likely reflect Sustainable Development Goals (SDG) claims related to environment and/or community benefits. From January 2021 to August 2024, projects that made SDG claims had average per-credit prices that were 31% higher than those without SDG claims. The influence of SDG claims on price varies by BeZero Carbon Rating (BCR), sector, and region. 

  • Buyers pay the highest prices for projects with both high ratings and SDG claims. Projects assigned a BeZero Carbon Rating of ‘BBB’ or above that also make SDG claims command prices that are 61% higher than projects rated ‘BBB’ and above without SDG claims.

  • The price premium for credits with SDG claims is significant within the sectors that are most commonly associated with ‘beyond carbon’ impacts, namely the Industrial Processes (20%), Household Devices (19%), and Nature-Based Solutions sector groups (7%). 

  • Overall, credits with SDG claims also fetch higher prices when broken down by region. Credits issued by projects located where there is higher potential for ‘beyond carbon’ impacts command significant price premiums, p-value <0.05: Southern Asia (69%), Eastern Europe (30%), and Southeastern Asia (15%)

  • These market trends signal that buyers frequently seek projects that have impacts beyond carbon mitigation. However, simply making an SDG claim does not necessarily translate to high-integrity ‘beyond carbon’ impacts. As with carbon efficacy, SDG claims vary in integrity. BeZero’s research and tools shed light on the impacts behind these claims.

Contents

  • Carbon credits with SDG claims are in high demand.

  • Carbon credit price trends by SDG claims and carbon quality

  • Carbon credit price trends by SDG claims and sector 

  • Carbon credit price trends by SDG claims and host country

  • Identifying high-integrity SDG claims

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