What does it take for a social enterprise to leverage the carbon market and generate extra revenue from their environmental and social impact?
Turning climate action into revenues
The carbon market is a complex market that requires more and more transparency and accountability to be trusted by the buyers and leveraged efficiently by the Social Enterprises. The voluntary market is no exception to that.
Streamlining the process
The process is highly demanding. It requires specific expertise and capacity to handle each step efficiently. The process is long, one to two years for registration, and almost 9 months for yearly credit issuances. In that context, the team’s experience is crucial to streamline the different steps, from coordinating with 3rd party auditors, preparing the survey, the quality tests, the consumption field tests, to evaluating a sample that is representative of the enterprise’s activity. For Hydrologic Social Enterprise (HSE), a water filter manufacturer, the surveys and tests were run to 185 households from 23 villages and although the monitoring work happened under the chaotic situation of the Covid-19 pandemic, the Nexus carbon project team managed to comply with Gold Standard rules and get the credits issued as plan.
Building a sustainable business model
HSE has been a successful Carbon Project for almost 5 years. Thanks to a climate fund, Nexus was able to offer financing to Hydrologic to secure the upfront costs of that journey (~100-150k), including the feasibility study, the project design, and registration, as well as the first audit and credits issuance. The business model was built in a way that the carbon project would not cannibalize the company resources and their development, yet it will deliver long-lasting revenue in the medium term, that would sustainably support the company growth.
The success was magnified in 2020 when the carbon revenue accounted for 49% of total gross revenue for HSE, helping them to sustain their activities amid the covid-crisis.
The funds from carbon revenue, allow them to:
- Cover their 50% budget shortage due to covid-19
- Invest in business growth
- Invest in staff training and development Finance extensive warranty program
- Invest in improving the working environment
- Research and development
About Nexus for Development – Carbon Finance Services
Low-carbon projects | We engage with implementers, in the clean-cooking, clean energy, and water sectors, that require a key source of funding for their enterprises to scale by leveraging the Carbon Market and providing a full range of support from project certification to carbon asset management.
Carbon compensation | We also respond to individuals or companies seeking to voluntarily offset their emissions or achieve carbon neutrality via reputable projects that also deliver positive social impacts to the local communities.
For more information please contact: carbonfinance@nexusfordevelopment.org