sascha lafeld
DESCRIPTION
Measuring the impact of investments remains a main challenge for sustainable finance professionals and, together with Climate Change, an overarching theme at TBLI. Sixteen related workshops offer debate on ESG and Impact Investing trends, private equity, portfolio strategy, food production, emerging markets, sustainable energy or philanthropy investing.TRANSCRIPT
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Public Private Partnership “Water Benefit Partners“ Introduction to Water Benefit Certificates (WBCs)
Dr. Sascha Lafeld | CEO, First Climate Markets AG | 14/11/2013 | Zurich, Switzerland
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Corporates/Individuals
Water Benefit Certificates – How and Why?
Water Benefit Certificates
Revenue fromWBC sales
Water Benefit Certificates (WBCs)
Each credit certifies that specific volume of clean
freshwater has been supplied, purified or saved by
the project activity during a specific period of time.
Water Benefit Partners (WBP) is a Public Private
Partnership (PPP) that aims to develop an innovative
financing mechanism to support additional water
projects in regions particularly affected by water
related problems.
Market development
We create a market place for companies and
individuals to allow for credible and transparent water
stewardship engagement beyond public regulation.
(Voluntary carbon market is comparable)
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PPP Structure & Partners
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Review Manage, Reduce, EngageWater Stewardship/
Replenishment Investments
Positioning the WBP PPP
Corporate Water Management Core
Benefits: Improved efficiency, improved quality, improved community relations, reduced corporate risk
Benefits: Improved CSR management, improved supply chain management,
improved water-related know how
Not necessarily directly related to own
water use and locationsBased on own water use and sites
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WBC Certification Process
3.3.
1.1.
2.2.
4.4.
7.7.
Verification(by Independent Auditor (e.g. TÜV, SGS, DNV))
A monitoring report is submitted to the independent entity that verifies whether the project‘s benefits are real and measurable.
WBC Issuance(byWBC Certification Body)
Upon successful verification and submission of the verification report, the WBC certification body
issues an amount of WBCsequal to the benefits generated by the project.
Monitoring(byProject Participants)
Project participants set up a monitoring system to provide reliable data about the water benefits
generated by the project.
Registration(bythe WBC Certification Body)
Upon successful validation and submission of the validation report, the WBC certification body registers the project as an official WBC project
Methodology Development(byProject Owner/Developer/Consultant)
The methodology needed for the calculation of water benefits in litres of water supplied, purified or saved.
Project Document Development(byProject Owner/Developer/Consultant)
Project participants plan the project activity in a project design document (PDD)
Validation(byIndependent Auditor (e.g. TÜV, SGS, DNV))
The project gets validated by an accredited, independent auditor against criteria and guidelines set out in the WBC standard and WBC methodology5.5.
6.6.
8.8.
AnnualVerification Cycle
Sale of WBCs(to Corporations and Other Organizations)
WBCsare either directly or indirectly (via intermediaries) sold by the project owner to corporations that are interested in
supporting water projects.
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3.3.
1.1.
2.2.
4.4.
7.7.WBC Issuance
5.5.
6.6.
8.8.
AnnualVerification Cycle
Sale of WBCs
Long-Term Financing with WBCs
Learning from carbon markets: often long-term off-take agreements with retailers/end-clients
WBCs are issued and sold on a yearly basis providing a regular revenue stream
Annual verification requirement provides incentives for sustainable project operation
Usually many WBC buyers per project reduces risk of income loss
Multiple year crediting period issuance and sale of credits over a long period of time
Clear difference to ODA: WBC mechanism is designed to provide recurring payments over a long period of time instead of one-off donations
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Water Efficient Shower Heads
Alternate Wetting and Drying (AWD)
Construction of covers for water reservoirs/canals
...
Four Basic WBS Project Type Categories
Water Efficiency Water Supply Water Treatment
Rainwater Harvesting
Construction of Freshwater Wells
Construction of Water Supply Infrastructure
Fog Harvesting
...
Industrial Wastewater Treatment
Municipal Wastewater Treatment
Distribution of End User Water Purification Devices
...
Water Productivity
Drip irrigation
Direct Rice Seeding
...
The WBC mechanism is open to any kind of technology or project type as long as it addresses one or more water related issues!
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WBC Technical Advisory Committee at GSF
The Gold Standard Foundation‘s Water Technical Advisory Committee
(Water TAC) started its monthly meetings in August 2013
* The TAC needs to
review and approve
the Standard and
WBC methodologies
Anna Forslund Stockholm Water Institute
James Dalton IUCN
Jamie Pittock Australian National University, Water Stewardship Australia
Todd Gartner World Resources Institute
Scott Harder Environmental Financial Group
Biksham Gujja AgSri Agricultural Services
Samuel Bryan Nexus
Sascha Lafeld First Climate
Members include:
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Forecasting the Market for WBCs
• A functioning market for WBCs
does not yet exist, however the
voluntary carbon market gives
us a strong corollary
• Characterized by steady growth
since 2006
• 101 million tons of carbon offsets
contracted in 2012 – 4% more
than in 2011
• Market value of $523 million
• 90% of offset volumes were
contracted by the private sector
• Natural market for buyers with a
high exposure to water risk!
Historical Offset Demand by Transacted Volume, All Voluntary Carbon Markets
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Motivations of Potential WBC Buyers
1. Buyers facing indirect water risks through their business operations
Service providers, e.g. financial institutions, that do not have a large direct water
footprint, but that still have a business interest in addressing water risk
E.g. MunichRe, HSBC, Google
2. Buyers for whom water becomes a limiting factor in their production
processes and supply chains
Buyers that already do a great deal to address their direct water footprint, and
need/want to demonstrate their commitment to water stewardship
E.g. Coca Cola, Olam, Nestle, Carlsberg, Danone, SAB Miller
„The scarcity of clean drinking water has become one of the most pressing problems faced
by societies worldwide. With the WBC mechanism, we can attach a value to the provision
of quality drinking water in order to avoid wasteful distribution practices and direct it where it
is most urgently needed.”
Dr. Astrid Zwick, Head of Corporate Social Responsibility, Munich RE
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Dr. Sascha LafeldCEO
First Climate Marktets AG Email: [email protected] 10 Phone: +49 (0)6101 55658-1161118 Bad Vilbel/Frankfurt Fax: +49 (0)6101 55658-77Germany www.firstclimate.com