Climate Action Reserve to Apply Carbon Offset Expertise to Climate Investment Market

May 19, 2016

Pioneering new program will provide industry’s first rating for greenhouse gas reductions of projects financed by climate investments

LOS ANGELES, CA – The Climate Action Reserve, an environmental nonprofit organization and North America’s premier carbon offset registry, announced it is currently developing a rating program to assess the greenhouse gas impact of climate investments. The program will first be applied to the rapidly growing green bonds market. As the market for green bonds and climate finance grows rapidly, the Reserve will apply its expertise as a trusted California offset registry to these important financial instruments.

When the Reserve launched its offsets program, the sector lacked a transparent and rigorous standard to measure greenhouse gas reductions from offset projects. Similarly, while there are a number of green bond rating systems, none directly quantifies greenhouse gas reductions. The Reserve’s climate investment rating will continue to work towards one of the organization’s fundamental goals of ensuring environmental benefit, integrity and transparency for market-based solutions to global climate change.

“Climate change is arguably the biggest challenge of our time,” said Craig Ebert, Vice President of Policy for the Reserve. “By quantifying the actual greenhouse gas impact of a bond offering and other financial instruments, we will provide a clear signal to the market that will help investors understand how their actions address the fight against climate change.”

Currently, the Reserve is collaborating with the Connecticut Green Bank and Rhode Island Infrastructure Bank to evaluate existing green bonds to ensure that its methodology is robust, transparent and most relevant to the financial community.  As with its work in the carbon offset market, the Reserve recognizes that collaboration with other experts and partners is critical to ensuring the development of a rating system that will meet the needs of financial stakeholders.

“We are excited to be collaborating with the Reserve in this important area,” said Mackey Dykes, Vice President, Commercial and Industrial Programs, Connecticut Green Bank. “Understanding the climate impacts of our investments is critically important to our investment strategy and our environmental goals.  The Connecticut Green Bank is happy to help foster greater transparency and rigor in the bond market on the most important environmental issue of our day.”

The Reserve began as the California Climate Action Registry, which was created by the State of California in 2001 to address climate change through voluntary calculation and public reporting of emissions. The California Registry helped over 415 leading California-based corporations, organizations, government agencies and municipalities to voluntarily calculate and publicly report their GHG emissions. Its established expertise in emissions accounting translated into expertise in emissions reductions accounting for the North American carbon market.  The transparent processes, multi-stakeholder participation and rigorous standards of the Reserve helped earn confidence that registered emissions reductions are real, additional, verifiable, enforceable and permanent. The Reserve’s expertise and insight helped inform the development of the State of California’s cap-and-trade program, which adopted several of the Reserve’s protocols for use in its regulation.