The Reserve always seeks to ensure that the projects it registers not only help to mitigate climate change, but also avoid causing environmental or social harms more broadly. To this end, all projects are required to pass a “regulatory compliance” test demonstrating that they are in material compliance with applicable laws. Some protocols (e.g., forestry) have additional environmental and social “safeguard” criteria as well. On September 26, the Reserve’s Board of Directors formally adopted a proposed update to the Reserve’s environmental and social safeguard policy that clarifies their potential scope and application. Specifically:

• As always, project activities may not directly cause significant environmental or social harms. Such activities will either be declared ineligible, or the Reserve will refuse to issue credits for reductions achieved when harms were occurring.
• In some cases, the Reserve may impose restrictions or penalties for harms associated with project activities but not directly caused by them. This will only occur, however, if the harms: (1) occur in the vicinity of the project; and (2) are caused by an individual or entity that – according to the relevant protocol – is required to be involved in implementing project activities.

For example, the Reserve may review overall regulatory compliance on agricultural fields where nitrogen management projects are taking place, even though project activities may not directly affect that compliance. For these kinds of projects, the same individuals (farmers) are responsible for both the project activity and the environmental and social impacts of the fields where the activity takes place.

For coal mine methane projects, on the other hand, project developers are frequently independent entities that install methane-destruction equipment at mines owned and operated by another company. Because the Reserve’s Coal Mine Methane Protocol does not require mine owners to be involved in project implementation, the Reserve will not hold projects responsible for environmental or social harms caused only by the mine owners.

Finally, it should be noted that to date, the Reserve has never withheld credits or denied eligibility to a project that was found in violation of legal requirements or other protocol criteria. We hope that such violations continue to be exceptionally rare. This updated policy is meant to clarify how and when the Reserve will consider such violations if they do occur. Please see the Environmental and Social Safeguards Policy Memo released September 27 for more details and contact policy@climateactionreserve with any questions.