Nature solutions

In general, a project is considered additional when the benefits delivered would not have otherwise happened, but for the finance received and activities enabled by the project. So, it must go beyond business-as-usual and deliver a net positive benefit.

For example, in the case of GHG reductions, if carbon credits are awarded to abatement that would have happened regardless of the project/investment, overall emissions would continue to rise without an equivalent cut elsewhere. In that case, the project delivers no real carbon emissions avoidance or reduction.

We seek to ensure our activities are consistent with additionality principles in 3 ways:

• Technical: Carbon benefits are a result of the project activities (and would not otherwise have occurred). For instance, where communities would typically need to cut down trees for firewood, the project provides clean cookstoves to reduce that forest destruction. The stoves are powered by renewable biomass pellets made from materials such as agricultural waste, invasive tree species, and trees planted specifically for this purpose. In this case, the protection of the forest would not have happened without the distribution and use of the clean cookstoves.
• Financial: The project would not have happened without funding from the sale of carbon credits. In this case, to follow the example above, the cookstoves would not have been supplied without funding from carbon credit revenues, and the forest would have continued to be cut down for firewood.
• Regulatory: Project activities are separate from compliance-related impact mitigation requirements. For example, where the mine license or existing environmental management plan requires us to carry out land rehabilitation activities or secure biodiversity offsets, these would not be part of a nature-based solutions project.

To assess a project’s additionality, we use the latest VCS Additionality Tools. These help us to ensure that the carbon project and all complementary activities represent sufficient enhancements in financial flows, as well as environmental and social practices to demonstrate improvement from a business-as-usual scenario.

We ask questions such as:

• Are the project outcomes dependent on climate finance?
• Is the relevant counterfactual information/data readily available and defensible?
• Will our investment in the project/region be well-received as additional, i.e. are our operations delivering on commitments to manage climate and biodiversity impacts of our operations?

GHG emissions reduction and removals should be quantifiable using standardised methods, measurement tools and approaches - including adjustments for uncertainty and leakage. All carbon benefits from the projects we invest in and develop are measured against a credible emissions baseline and using robust carbon accounting methodologies, to ensure that our claims represent real carbon benefits. We continually monitor updates to these methodologies and adapt our own approach accordingly.

We review all project baselines with our nature solutions carbon advisers to ensure that the number of verified and issued carbon credits is conservative and not over or underestimated. We also work to ensure that the project design and carbon accounting methodologies do not allow double-counting scenarios (e.g. instances where the benefit of a single Greenhouse Gas Emission Reduction Unit is used or claimed more than once).

In addition, we're working with governments and other stakeholders to ‘nest’ all our REDD+ projects within jurisdictional programs. Nesting is a REDD+ carbon project design technique intended to reduce the risk of double-claiming. Within each jurisdiction, it harmonises land-use activities implemented at different scales, integrates the accounting frameworks for all the REDD+ carbon projects, and enforces comparable environmental safeguards.

We use pilot projects to test whether our project activities result in meaningful carbon avoidance or removals, and these are quantified using robust methods appropriate to the project type.

For public accountability and transparency, all quantification methods and techniques will be publicly available in project documents on reputable carbon registries.

We ask questions such as:

• Does the project use or comply with the most recent internationally accepted, or accepted compliance market methodology?*
• Is the methodology appropriate for the type of project?
• Based on the project’s status of registration/issuance, is the modelling approach and data appropriate for conservative verified emissions reductions yield?
• Is the project baseline data conservative?
• Is there sufficient geospatial evidence to support the methodology used and the accounting claims?
• Is there appropriate and geographically-relevant ground-truthing in place to test and validate any models?
• Does the carbon developer have a good project track record?

The permanence of a carbon project refers to the physical longevity and integrity of its carbon storage.

To ensure that carbon credits generated by projects represent permanent reduction and removal, we take precautionary measures throughout the project cycle to understand what is typical, achievable or feasible for given project types and activities, and what efforts are made to avoid or mitigate the associated risks of reversal events.

Where projects carry a risk of reversibility, safeguards and mechanisms are put in place to prevent and/or compensate for such losses should they occur e.g. insurance, credit buffer pools and ton-year accounting.

We ask questions such as:

• If addressing degradation, is the project design based on a theory of change that addresses the root causes to secure lasting land use change and permanence?
• Are there appropriate controls in place to avoid leakage and reversals over time?
• Does the project have the appropriate buffers in place?
• Does the project have a secure and resilient funding model for its lifetime?

We seek to ensure that our projects don’t result in negative unintended consequences for people, communities, their heritage or natural ecosystems:

• Developer’s community approach and benefits sharing are fair and transparent.
• Indigenous Peoples and local communities play an integral role in co-design, development and ownership of projects. Engagement is inclusive and based on principles of Free, Prior Informed Consent (FPIC).
• Projects don't replace intact ecosystems.
• Integrated, regenerative landscape stewardship approaches (water, biodiversity, ecosystem services) are prioritised.
• Projects and partners have good governance practices and procedures.
• Projects have the support of relevant government and other jurisdictional structures following engagement.
• Projects meet our environment and community and social performance standards as relevant to project type and have Climate, Community and Biodiversity (CCB) certification or equivalent.

Social safeguards

We ask questions such as:

Human rights safeguards

• Is the project /are the partners committed to respecting human rights?
• Have there been any reported violations of human rights connected to the project/partner and/or any of its directors or management team?
• Is there evidence of how the project has incorporated human rights due diligence into its systems and processes?

FPIC-based approaches 

• Where Indigenous Peoples groups are impacted, has the project demonstrated sufficient involvement of Indigenous Peoples' in the project?
• Has the project demonstrated its alignment with the principles of FPIC?

Cultural heritage and livelihoods 

• Has care been taken to ensure that the rights to, usage of and access to lands and waters, and the associated ecosystem goods and services, are acknowledged and respected?
• When addressing degradation caused by natural resource use, has care been taken to secure alternative livelihoods, using human rights-based approaches? 

Grievance mechanism

• Does the project have a well-defined and effective feedback and grievance mechanism, developed in collaboration with affected communities?

Community involvement and decision-making

• Does the project follow internationally accepted stakeholder engagement and co-design practices to ensure the views of rightsholders, and marginalised and minority groups are taken into consideration?
• Does the project include decision-making processes that ensure that the rights and interests of all participating and affected stakeholders are documented and responded to?
• If the project extends beyond cultural or jurisdictional boundaries, have efforts been made to establish mechanisms to enable joint decision-making?

Benefit sharing*

• Has the project established a fair, equitable and transparent benefit sharing framework?

Ecological safeguards

We ask questions such as:

Biodiversity protection

• Does the project protect the integrity of ecosystems, e.g. restoration work is only conducted on degraded/deforested lands and does not replace other natural ecosystems?

Invasive species

• Does the project intend to introduce potentially invasive species to the project area? Has a context-specific risk and impact assessment been conducted and are there reliable, appropriate controls in place?

Governance

We ask questions such as:

Safeguard monitoring

• Does a mechanism exist to monitor the project throughout its lifecycle:
  1. To periodically assess and rectify the application of safeguards and trade-off limits.
  2. To evaluate activity progress.
  3. Against a framework of iterative learning for adaptive management?

Stakeholders

• Are investors, communities, beneficiaries and other parties involved in the project well-documented?*
• Have affected stakeholders been identified and involved in relevant activities?

Risk and opportunities assessment

• Does the project development and design include a risk and opportunity assessment?
  • Have the risks been appropriately addressed? Is there a process to track the adequate management of these risks?
  • Have unintended social or environmental consequences been assessed and accounted for?
  • Are risks and opportunities periodically assessed during the project?
  • Has the project acknowledged the potential trade-offs of the project and do these inform appropriate safeguards and mitigations?

As part of our purpose to invest in and develop projects that bring positive outcomes for people and nature, we look for aspects that support multi-decade project sustainability.

We design our projects to advance measurable sustainability objectives such as water stewardship, soil health, waste reduction and biodiversity protection, and community benefits such as job creation and public health improvement.

If the developer cannot provide evidence that the requirements set out in this criteria are in place or confirms they are not, or that they are not of a sufficient standard – provided the basics are in place, there have been no serious or irreversible breaches, and the developer is willing to collaborate to improve the project integrity – we’re willing to consider support of further development and improvement to achieve international expectations. If not, we do not proceed.

In addition, projects are assessed for their role in the Rio Tinto Nature Solutions pipeline to include:

1. A variety of methodologies representing avoidance, reduction and removals.
2. The protection and restoration of a diversity of ecosystems.
3. Support for the resilience of a wide range of communities’ land uses.

Integrated land use management*

We ask questions such as:

• Does the project take into account other initiatives taking place in the landscape and how it might align/enhance/support these?
• Does the project take local land use or other planning tools into account, whether already in existence or in plan/development as part of a government framework?
• Has an integrated landscape planning approach been used? Does it focus on stewardship and identifying potential sustainable management, protection or restoration projects to build ecosystem integrity?
• Does the project design take an integrated approach in identifying and assessing the socio-economic and ecological challenges and opportunities?
• Is the project valued in terms of integrated metrics that consider climate, social and environmental outcomes rather than performance (eg number of trees planted)?
• Has an integrated planning and design approach been used to consider environmental risks and outcomes beyond biodiversity (such as water and ecosystem services)?
• Does the project take an integrated/systemic view of challenges faced by different groups to find a balanced solution that does not place the challenges/claims of one group above another (eg pastoralists vs farmers)?

Sustainable positive outcomes for people*

We ask questions such as:

• Does the project bring long-term additional socio-economic and climate resilience benefits to communities, or conservation/restoration ecosystem benefits?
• Is the project opportunistic or does it represent bona-fide efforts to address socio-economic challenges through the development of carbon credits?
• Are socio-economic and ecological opportunities balanced appropriately for sustainable outcomes? Does the project track a set of indicators/metrics linked to these outcomes?
• Is the project designed to become economically viable/self-sufficient over time?
• Have alternatives to the project been assessed against the benefits they might bring to communities?

Contribution to a nature positive future*

We ask questions such as:

• Is the project opportunistic or does it represent bona-fide efforts to address environmental challenges by adding value to nature through the development of carbon credits?
• Does the project bring long-term additional conservation/restoration ecosystem benefits?
• Does the nature-based solution contribute to relevant national targets associated with the Sustainable Development Goals (SDGs) and the Kunming-Montreal Global Biodiversity Framework?
• Based on the risks faced in the region, does the project target an important conservation or restoration priority?
• Does the project consider opportunities to rebuild or maintain ecosystem connectivity as part of its outcomes?
• Are biodiversity outcomes tracked and assessed as part of an adaptive management program?
• Are biodiversity metrics set upfront in relation to project goals and baselines/starting conditions?