How to demonstrate co-benefits (social, ecosystem) to attract investors?

Concept and role of “co-benefits”

Co-benefits are positive values beyond the emission reduction objective that a carbon project can bring to the local community, society, and ecosystem. These benefits may include creating sustainable employment for local people, conserving biodiversity and increasing forest cover, improving water quality, air quality, or public health, and supporting education, training, or empowerment of vulnerable groups. For investors, especially impact funds, Multilateral Development Banks (MDBs), and companies with net-zero strategies, co-benefits are a decisive factor in project selection. The clearer a project demonstrates socio-environmental impact, the higher the likelihood of receiving funding or selling credits at a premium price.

Solutions for Demonstrating Co-Benefits in Project Design and Communication

Integrating Sustainable Development Goals (SDGs) into the Project Design Document (PDD)

Businesses should clearly identify which SDGs their project contributes to, for example: SDG 13 - Climate Action, SDG 6 - Clean Water and Sanitation, SDG 8 - Sustainable Work, and SDG 15 - Life on Land. This information should be included in the social and environmental impact analysis section of the PDD, together with an SDG monitoring plan. Using SDG language and indicators helps align the project with international donor expectations and facilitates the project evaluation process.

Applying internationally recognized co-benefits measurement frameworks

Two leading international standards provide frameworks for assessing and verifying co-benefits:

• Gold Standard for the Global Goals (GS4GG): Integrates SDG assessment using the SDG Impact Tool, allowing quantitative and qualitative measurement of co-benefit indicators.
• CCB Standards (Climate, Community, and Biodiversity)135: Commonly applied in afforestation, reforestation, and land conservation projects, providing a structured assessment of impacts on indigenous communities and biodiversity.

Businesses can utilize these toolkits from project development, register for third-party verification to enhance credibility, and obtain high-standard labeling (e.g., “Gold Standard Certified”) which can increase the market value of credits.

Communicating Using Specific, Transparent, and Understandable Indicators

Demonstrating co-benefits should include specific, measurable indicators to improve persuasiveness. Examples include:

These indicators should be periodically updated and included in transparent reports such as annual impact reports, ESG reports, or project marketing materials.

Illustrative Example

A domestic wastewater treatment project in the Mekong Delta reduces methane (CH₄) emissions via biogas technology. Beyond reducing 20,000 tCO₂ per year, it provides co-benefits: contributing to SDG 6 by providing standard-compliant reclaimed water to 500 households; contributing to SDG 13 by reducing 20,000 tCO₂ through gas capture; and contributing to SDG 8 by creating 35 technical and plant operation jobs. The project utilized the Gold Standard SDG Impact Tool for quantification and was verified and validated by an international organization. As a result, a climate fund donor from Switzerland invested capital at preferential interest rates and signed a long-term carbon credit purchase agreement.

Recommendations for SMEs

From the conceptual stage, enterprises should identify potential co-benefits based on business models and project location, utilize international assessment frameworks such as Gold Standard or CCB to enhance recognition, proactively communicate and quantify co-benefits to satisfy investors and enhance corporate image, and collaborate with social organizations, NGOs, or universities to objectively monitor and evaluate impact.

References

135. Climate, Community & Biodiversity Alliance. (2013). CCB Standards Third Edition. Verified Carbon Standard. CCB_Standards_Third_Edition_December_2013.pdf