Reducing Greenwashing to bring more Investment into Impact Finance
“$2B is roughly the size of the voluntary carbon offset market – yet we need trillions invested to reach the Sustainable Development Goals.”
At 3:10 – A new phenomenon – Green Hushing – is when a business or an investor is afraid to make claims or take action because they are afraid of being accused of Greenwashing.
Gary Newcomer with Gold Standard is working to bring greater integrity (i.e. reduce greenwashing) at the portfolio level of impact investing thereby bringing more investment into impact finance. He shares his impact story as part of our micro-podcast series, originally recorded at The Global Impact Investing Network Investor Forum in Copenhagen.
Podcast Transcript
Jacob: [00:00:00] Alright, I’m here with Gary Newcomer of Gold Standard. We’re at the GIIN Investor Forum in Copenhagen. And we’d love to hear from you about just what’s Gold Standard all about. How are you driving impact?
Gary: Thank you, Jacob, we’re happy to be here and I’m happy to share a few words. I like to start with the story of Gold Standard, and how we got started. Because where we are today is not exactly how we got started 20 years ago.
So we were founded by the WWF to raise integrity in the voluntary carbon market space. And that’s the space that we really began our story, developing methodologies, developing a standard for that market for carbon credits. To make sure that when people were making claims about reduced carbon emissions that those claims were real. And also that those projects were really having the highest impact and integrity using safeguards really science-based and sound methodologies and a number of other factors and principles that come into play.
[00:01:00] However, what we’ve learned is that while the carbon market is big It’s in the billions like two to four billion I believe for us to achieve the impact that we want to achieve and reach the global goals; whether through the Paris Agreement or through the Sustainable Development Goals, we needed to have an impact that was in the trillions.
That’s a worldwide amount of investment that needs to happen in order to make the impact we need to see. And while the carbon markets and carbon crediting is still a piece of what we do, we needed to scale up. A few years ago, we started thinking about how can we apply our expertise in impact measurement and impact management in maximizing impacts within the carbon market space, how can we leverage that standard and expertise more broadly?
And that’s why we’re here at the GIIN Forum, because we’re applying our standard in a lot of new ways, particularly for our portfolio certification. [00:02:00] Instead of using our standard, our certification for individual projects, How can we apply it for SDG impact at the portfolio level, at the investment level?
Because we want to make sure, that there’s high integrity in impact investing, and when people are making claims of impact investing, they’re truly achieving the impacts that they’re wanting to achieve and that they’re stating. And we believe by doing so, it makes it easier for investors to come to the table.
It improves how funds are structured, how debt vehicles are structured to have the highest level of impact. And it’s also just the core of what we believe. Preventing greenwashing, just making sure there’s the highest integrity in all the work that we do, and just navigating everyone as best we can using the tools we have available. To the sustainable development goals to our kind of global goals, We’re hoping to achieve.
Jacob: The topic of greenwashing comes up a lot and is a big concern. Do you have a sense of how pervasive [00:03:00] is that? Is it overblown? Is it bigger than what we realize? Like, what’s your assessment of that
Gary: Greenwashing certainly exists It would be impossible to deny it And in fact, we also have reached a point where you see green hushing. That’s when businesses or investors or any sort of Individual or entity is actually afraid to make claims or afraid to take action because they’re afraid of being accused of greenwashing. So for us, it’s something that is concerning, but we know there’s a lot of actors that are good actors and are doing really impactful projects, really impactful investments.
So for us we want to leverage our expertise, our skills, our standard to really fight back against claims of greenwashing when there is no greenwashing, in fact, occurring. But yes it’s very concerning when you see claims that are not real but we want to make sure that happens. as less likely as possible,
Jacob: Give me an example of a case study [00:04:00] or a project that is a good example of Gold Standard at work.
Gary: Gold Standard is all about partnerships and collaborations, so I’ll speak to one of the collaborations that we have. The Subnational Climate Fund is one of the funds that we’re working with. It’s a private equity fund. It has a concessional piece of financing from the Green Climate Fund, and there’s a number of partners that have come to the table.
Catalytic Finance, formerly of R20, Pegas Capital Advisors, who I believe is here today, and Gold Standard, of course. I apologize if I’ve forgotten someone. And the purpose of that fund is to really drive more investments at the subnational level, so maybe projects that might not achieve finance otherwise.
And projects that aren’t necessarily using traditional forms of carbon finance in order to have the impacts it’s hoping to achieve. So we’ve been working with their fund managers and with all the partners to make sure that the Subnational Climate Fund is able to invest in projects and achieve very real and tangible impacts.
Jacob: [00:05:00] So what are the misnomers or assumptions people make about Gold Standard that, you find yourself saying all the time well actually Gold Standard isn’t XYZ. What are the things you’re correcting people about?
Gary: We’re not just a carbon standard, I think is the number one thing. We did get our start working a lot within the carbon markets, and that’s something that we still do. And it’s something that is a tool that we believe is important within sustainable finance. But we’re an SDG impact standard. And we can certify claims that don’t solely generate carbon credits.
I think for us, we are here to get the word out that we can apply our standards and apply our methodologies, and apply our tools and expertise far beyond just the carbon markets or carbon credits. And that we can move the needle and raise ambition and kind of drive more sustainable finance to achieve the global goals beyond just using carbon credits.
So that’s probably the number one thing and a conversation I’ve had multiple times. here. It’s still [00:06:00] something that we do, but just one piece.
Jacob: And do people assume you are another impact measurement platform? Does come up?
Gary: Yeah that can happen from time to time. For us, we always point back to the name Gold Standard. So we’re a standard. You can apply our standard. We’re a nonprofit. We’re based in Switzerland. So we’re not here to make money. We’re here to help people achieve their goals, raise integrity in their work build more collaboration, try new sustainable finance tools.
We really just want to help move the needle forward Our business model, we are a nonprofit we do receive a number of grants, we do work with foundations and government partners and DFIs to develop new methodologies or take innovative approaches. So of course that’s one piece, the philanthropic funding, grant funding, aspect of our work, but also to we have an impact registry.
If you are utilizing the impact registry or applying our certification there are some small fees involved in that as well. So there is a few different ways that we receive funding and build our business model. [00:07:00] That’s a very high-level way to explain it.
Jacob: When would somebody know that they need to reach out to the Gold Standard?
Gary: Yeah that’s a really good question I think it comes down to who it is and what they’re hoping to achieve. So for instance if there is a fund manager or a group of partners trying to develop a fund and think through how they want to achieve the impacts that they’ve set as a goal.
That would be a really great moment to bring in Gold Standard. If you’re working with project developers, for instance, whether it’s on a carbon project or even on adaptation or thinking about biodiversity that would be a great time to bring us into the conversation. Or maybe you’re thinking about making an investment at the landscape level and bringing together collaborative approaches of finance within a landscape level type of intervention, rather than a very specific localized project level.
We’re also a good partner to bring to the table. Anytime you need to measure, manage, [00:08:00] maximize your impacts, I think that anyone working in that space could definitely reach out to us and, we would be happy to lend our standard, lend our methodologies, lend our expertise, or just have a conversation and see how we can work together to, achieve our collaborative vision for the world.
We’re a relatively small organization, so it can be hard to get the word out about what we’re doing. It can be hard to really bring in more partners to the space. We’re always looking for anyone who can help raise the word about what we’re doing.
While we’re based in Switzerland, we do have staff around the world, but the world is a big place. So anytime that we can get help to raise awareness about what we’re doing and bring more partners to the table, that’s always very appreciated because it’s a hurdle to do when you’re a relatively small nonprofit organization.
And of course, as a nonprofit, we just don’t have some of the luxuries that maybe a giant corporation or a government might have as well. I think that would probably be one of the big hurdles that we have. I might add too [00:09:00] that technology is always changing, so we’re always trying to keep up with the latest technologies that are out there.
As well as an increasing number of frameworks and regulations within the investment space or within the government space. It feels like the landscape is always changing a bit.
The world is changing pretty quickly. Whether it’s technology or regulation or just the political climate it can be a hurdle to to keep up, but I think we actually do a pretty good job keeping up with all the changes that are happening and I think we’ve actually been able to be a resource for others as they’re navigating those changes too, but always a hurdle. Being a small nonprofit and also dealing just with the changes that are happening in the world.
Jacob: If you had a magic wand, and you could have a list of top five partners that you want to bring to the table, who would they be?
Gary: Instead of listing names I would say large corporates that are really interested in impact investing, specifically at the landscape level, and thinking beyond just their value chain that’s something that is one. Number [00:10:00] two, definitely DFIs or multilateral financial institutions. We think they play a really important role within like blended finance and the investment space. But also as thought leaders and just conveners. And really being, pioneers in the space where they lead, others often follow.
Building relationships with them. Pension funds, Insurance companies those are spaces that we’re always looking at. Insurance especially within the role of adaptation to climate change is happening and it can be hard to keep up to speed with the risks that a project developer or an entity must think through. Whether it’s for their value chain or maybe they’re just a small project developer thinking about partnerships with insurance companies would be really great.
Jacob: If someone wanted to find out more about Gold Standard, how do they find you online?
Gary: Yeah you can go to GoldStandard.Org Very simple our name point org That’s probably the easiest way to find us. You could also just google Gold Standard or Gold [00:11:00] Standard for the global goals Those are all easy ways to find us in this day and age, I think or you can find us here at GIIN we have a booth. We’re booth number one, and we have some Swiss chocolate that we brought with us, and anyone is welcome to come and visit us and talk to us there, or find us on LinkedIn,
Jacob: I need to come by for the Swiss chocolate.
Gary: It’s maybe it won’t be there for long, we’ll see
Jacob: Fantastic. Any last thing that you want to share before I let you go?
Gary: Oh no just that we’re happy to be here, we’re happy to see the Impact investing community come out in full force at GIIN this year. It’s inspiring to see it’s our first time at GIIN, so we’re just so happy to be here, and we’re happy that you’re here, and you set aside some time to help us tell our story.
Jacob: Awesome Thank you so much.
Gary: Thank you.
Jacob: Bye.
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