ClearBlue Markets co-founder and chief technology officer Nicolas Girod and nature-based solutions associate director Juan Manuel Cardona Granda explain why 'boots on the ground' matter in the voluntary carbon market and how the company's carbon intelligence technology platform is helping clients determine the value of carbon credits.

Environmental Finance (EF): What are the biggest challenges facing clients and carbon markets today?

Nicolas Girod (NG): There are several challenges facing our clients today. The first is ensuring the credibility and impact of the projects in which they are investing. The second surrounds the pricing of credits and understanding price volatility. And the last is the fragmented regulatory environment. We aim to help our clients navigate all those different pain points.

There is a lack of standardisation in this market, which we believe will remain for the near future. And there will always be a risk that when purchasing carbon credits based on price alone, they will not have the impact many expect.

There is much discussion about types of credits, competing standards and different registries, which has resulted in more rules and initiatives to help buyers and sellers.

Juan Manuel Cardona Granda (JCG): As recent media coverage of carbon markets has shown, there are many challenges. It is an extremely complicated market, there are social, credibility and perception issues that can make carbon markets complicated to navigate.

EF: How is technology transforming the way that carbon credit markets operate?

NG: Our carbon intelligence technology platform, Vantage, was developed several years ago when we started to see a lot more questions from clients about price and transparency. Our first tool was called the Offset Price Discovery tool, which allows our clients to understand the value of carbon credits and how much they should pay.

After some of the recent scandals we have seen in the voluntary carbon market (VCM), we created a new tool – the world nature-based solution (NBS) map – to understand where projects are located to help our clients in their due diligence processes.

JCG: A tool like the NBS map allows our clients to check if the land has been double-counted because there may be overlapping projects in different registries.

NG: More recently, we have created the Position Manager tool which allows clients to track their positions in the voluntary market and help them manage across different registries and make accurate forecasts.

EF: How important is a robust approach to due diligence?

NG: A robust approach to due diligence is critical for ensuring the credibility of the projects our clients invest in. The soon-to-be-released ClearBlue Vantage Delivery Risk Assessment tool leverages historical data to quantify delivery risks, helping investors navigate the complexities of carbon project development. Additionally, having boots on the ground remains crucial for ensuring thorough due diligence.

JCG: Not only are we working with investors to see if the projects are doing what they say they are, but we are also collaborating with the community and other stakeholders. We have to check that these projects are offsetting and have a real climate impact. If they do not, they should not qualify as carbon credits.

Increasingly our clients are concerned about other impacts such as biodiversity and the social impact of projects, making due diligence a more complex process.

Often you can make any model fit within a spreadsheet and things might look very promising, but until you go into the field and see the projects themselves you may not have the full picture. Sometimes our clients might miss things because they do not necessarily have the same background or experience that we have.

EF: What is ClearBlue Markets doing to help clients?

NG: Our ethos at ClearBlue Markets is to help companies make carbon markets work for them and that is really how we run our business. We aim to help clients understand the markets, whether it is pricing or the types of credit available. Since launching we have created different tools to help them with this, but our on-the-ground services as well as deep carbon project development expertise are just as important. We also have a research team of analysts that can help forecast the price of credits in the future.

JCG: People often think of offsets as simply carbon-focused, but we are now seeing the evolution of the sector which now includes social issues, sustainability reporting, and nature impacts. It is much broader than ever before and is not the 'vanilla' offsetting that many people think of.

NG: Many of our buyer clients would usually be from the Global North – North America and Europe – but a lot of those projects are developed in the Global South. That means we must have a local presence around the world. ClearBlue Markets can be on the ground on all continents to inspect all the projects our clients are looking at.

We can bridge the gap for clients that do not necessarily have the time, background or expertise to investigate all aspects of a project, making sure that they are compliant and understand the real impact of a project.

For more information, see https://www.clearbluemarkets.com/