Other Frequently Asked Questions
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Answered questions
Use of Climate Dividends
Can any company issue and distribute Climate Dividends?
No, today, only companies (and the solutions they submit) that meet all the eligibility criteria can issue Climate Dividends.
At the company level, they must at least have published a Carbon Footprint. Then, at the solution level, the solution must be aligned with the most up-to-date climate science (i.e EU Green Taxonomy, IPCC AR6). Also, the solution itself must not have a direct link with fossil energies.
Is this exclusively for companies based in France?
No!
We started our operations in France, and that's where we are based, but we already have operations abroad:
Several companies/investors, including in our first cohort, operate internationally
We work with non-French companies - for example Waste Robotics which is based in Canada
Our technical committee and network of experts are composed by a range of people from all over the world
Beyond this, we work to make Climate Dividends recognized internationally - and we are currently in discussions with several companies, government organizations, coalitions and investors abroad.
What's the difference with avoided emissions?
Avoided emissions are simply a calculation of the emissions that a solution enables to avoid over its life cycle.
Climate Dividends, on the other hand, go beyond the calculation. They result from a structured process that includes eligibility criteria, a robust attribution methodology, and independent validation and verification. Only after going through this process can avoided (or removed) emissions be converted into Climate Dividends and attributed to a specific company.
How much is a Climate Dividend worth? Can it be monetized?
Climate Dividends are a non-financial indicator. They are not assets, and as such, are not marketable/exchangeable (unlike carbon credits for example). It is therefore strictly forbidden to monetize them.
However, Climate Dividends are designed to be integrated into financial reasoning. They can contribute to a company’s valuation through a form of climate goodwill and serve as a relevant extra-financial KPI to inform investors’ decisions.
What's the difference with carbon credits?
Climate Dividends and Carbon Credits are different but complementary. There is no conflict in using both for the same activity, even simultaneously. Carbon credits can be used to generate additional revenue from an activity, while Climate Dividends serve as a non-financial indicator for investors.
Climate Dividends are a financial right, linked to holding shares of a company or being a creditor (holding any debt) of the company. Carbon credits, on the other hand, are fungible personal property.
There are three main differences between Climate Dividends and Carbon Credits:
They differ fundamentally in nature:
Carbon Credits are financial instruments, involving a transaction or financial flow.
Climate Dividends are non-financial disclosures, used for reporting and communication.
They also differ in scope:
Carbon Credits require financial additionality, meaning the emissions reduction or sequestration must result directly from the funding provided by the credit purchase.
Climate Dividends do not require additionality; they recognize and report climate impact from existing activities, regardless of external financing and financial viability.
Carbon Credits can lead to offsetting mechanisms, this is not the case for Climate Dividends.
Is there a risk that Climate Dividends entail greenwashing?
Climate Dividends cannot be used to offset a carbon footprint or to claim carbon neutrality and are based on certified data audited by an independent auditor (Recognized VVs ).
They are designed to highlight the positive impact of a Solution, alongside induced emissions. In order to claim and distribute Climate Dividends, a company must first assess and publish their carbon footprint (Scope 1,2,3) and share a credible transition plan for their activities (for large companies).
Note that they do not help to identify companies practicing greenwashing, but rather promote companies and investors who contribute to carbon neutrality without resorting to greenwashing.
How does it fit with other reporting frameworks (CSRD, ESG labels, SBTi, ACT, PCAF, GFANZ…)?
Climate Dividends serve as an extra-financial indicator, distinct from labels, scores, or grades. They are designed to assess the performance of a Solution to contribute to decarbonisation (via removed or avoided emissions). They are to be used primarily through ratios like “Climate Dividends received per € invested” or “carbon footprint to Climate Dividends” (vs absolute values).
Reporting Frameworks: Climate Dividends can already be integrated into reporting through frameworks such as the Net Zero Initiative by Carbone4 and ACT for Finance. They are also referenced in the GFANZ framework.
Regulation: While Climate Dividends are not yet formally recognized under European regulations like CSRD or SFDR, which focus on induced emissions, the goal is to have them included in these frameworks in the near future. In the meantime, Climate Dividends can already be disclosed as additional information within CSRD reporting.
Can a Climate Dividends claim be made at the SPV (Special Purpose Vehicle) level?
Yes. An SPV is a legal entity in its own right and can therefore submit a Climate Dividends claim, provided it meets the eligibility criteria and can demonstrate its contribution to the solution's climate impact.
Issuance process
Where can we report Climate Dividends?
Climate Dividends can generally be included in any extra-financial reporting (mandatory or voluntary), as long as they are reported separately from other elements to avoid confusion, notably Carbon Balance (or any GHG emissions inventory) and Carbon Credits (or any "offsetting" process).
They can be reported in various contexts, for example:
Impact reports, whether at the company level or for a fund, in addition to CSRD reporting.
Fundraising and due diligence processes, where they can serve as a KPI to showcase a company’s climate contribution.
Internal KPIs, to guide decision-making and track climate performance within the organization.
Banking and financing processes, where they can be used as a non-financial performance indicator.
In short, Climate Dividends are a versatile KPI that can complement both internal and external reporting, helping communicate a company’s real contribution to avoided emissions.
How much does the process cost?
Costs can vary depending on the company’s size, the complexity of the solution, and how much work has already been done on avoided emissions. In general, however, the budget is reasonable and can is adjusted to fit your company’s situation. Below, you’ll find an overview of the main costs to consider:
Climate Dividends application fee:
A small application fee, starting at €950, based on your company’s turnover. This fee helps cover part of our operational costs and supports the initiative.Application fees
Methodology validation & claim verification (by an independent third party):
This is a mandatory step to ensure the reliability and credibility of your claims.
For medium-sized companies, the cost typically ranges between €3,000 and €5,000 in the first year.
If your methodology remains unchanged, subsequent years require only a simpler verification, reducing the cost.
(Optional) Avoided emissions calculation:
This includes defining the methodology, setting the reference scenario, making assumptions, collecting data, etc.
It usually requires a mix of internal effort and/or consulting support. The cost will depend on the complexity of your solution and how much work has already been done on avoided emissions.
(Optional) Carbon footprint:
A carbon footprint is required for eligibility. This can be conducted internally (recommended Carbon Footprint tools) or via an external consultant.
(Optional) Transition plan:
Large companies must have a transition plan to be eligible. Like the carbon footprint, it can be developed internally, although less commonly, or with external support (eligible standards & framework).
If you plan to work with a consultant, we recommend checking our list of Referenced Consulting Partners.
If they assist you with preparing your claim, they may be able to offer a bundled package to help reduce overall costs.
Additionally, if you work with one of our referenced partners, you’ll receive a 50% discount for the 1st year and minimum 20% for the following years on your Climate Dividends fees.
How long does it take?
The time required depends on several factors and can range from less than a week to up to six months if you are starting completely from scratch.
The first year usually takes longer because you need to become familiar with the tools and the process, complete your carbon footprint and LCA, and have the methodology validated through an audit.
From the second year onwards, the process becomes faster: you are already familiar with the steps, and the methodology remains valid for five years. In terms of calculations, you only need to update the figures for the new year of activity. The audit will no longer review the model itself, but will focus solely on verifying the updated data.
Check this approximative timeline to learn more.
What's the difference between a Solution Detailed Declaration (SDD) and a Claim?
The Solution Detailed Declaration or “SDD” outlines the methodology used to assess avoided/removed emissions of a Solution on a given year (e.g selection of the baseline).
A claim is the number of tCO2e avoided/removed by the Solution when using the methodology described in the SDD.
Is the process the same between the first year and the following year?
The process is slightly different between the first year of issuance and the following ones. In the first year, the SSD with a chosen methodology is validated for a 5-year validity period and the associated claim (application of the methodology for this given year) is verified.
In the following years, during the validity period, the same SDD remains valid (no external validation is needed) but each claim (based on the same SDD) must be verified.
Who are the Validators/Verifiers (VVs)?
The VVs are the independent 3rd-parties that are charged to audit the SDDs and the Claims of the companies, to guarantee long-term credibility of the Climate Dividends. They guarantee the transparency and seriousness of the methodology used in the SDDs, provide a validity period, and supervise the Claims.
The VVs also guarantee a standardised and comparable way of working across all companies claiming Climate Dividends. As per stated the in the Protocol:
" A Verifier and Validator is an independent third-party that has been accredited by the Climate Dividends Association following the requirements in Appendix 2 and can demonstrate experience in environmental auditing. By accepting the Verification and Validation (VV) assignment, the external validator/verifier agrees to:
Declare whether impartiality and independence are compromised
Sign a NDA with the Climate Dividends Association and respect confidentiality clauses
Accept that the results of the verification and validation will be disclosed associated with the name of the Verifier and those of the people involved in the VV.
[...] The Validators intervene at the SDD stage, whereas the Verifiers’ role is to evaluate the Claim, i.e. the positive climate impact calculation eligible for Climate Dividends for the given year. A single organisation can do both."
Check the list of Accredited Auditors here.
How are the VVs selected / certified?
To be certified by the Climate Dividends Association, Validators and Verifiers must:
Have validated the Climate Dividends certification course
Justify an ISO 17029 accreditation or equivalent (i.e. ISO 14065) or be able to conduct a CSRD audit according to their local regulations
What's the role of the Climate Dividends Association during the issuance process?
The core tasks of the Association are to:
Define how Climate Dividends work: impact assessment methodologies, issuance and distribution process, usage and communication guidelines
Coordinate Climate Dividends’ issuance and distribution: ensure transparency and traceability, certify the auditors, support the users
Push for a wider market adoption of Climate Dividends, as a market best-practice amongst investors and in regulation and reporting standards, alongside other indicators
This means that during the issuance process, our team will support you to complete the process, to determine the right methodology, to find the VV...etc. However, we do not act as a consulting firm and we neither do we conduct the evaluations ourselves nor do we fill-in the SDDs for companies.
Methodology
Which methodologies are approved?
Find the approved methodologies in the section Recognized Methodologies
What's the difference between the Protocol and Cookbooks?
While the Protocol provides a solid framework and standardized methodological rules, it remains high-level. To encourage adoption and comparability, the Association regularly reviews and endorses external methodologies. However, not all industries/solutions benefit from an existing consensual external methodology. Therefore, in certain industries, until robust external standards emerge, we are developing simple, temporary guidelines tailored to the needs of organizations using the Climate Dividends framework. These “cookbooks” are meant to be temporary and replaced by a dedicated sectoral and consensual methodology when it emerges.
You can download the Protocol here.
And all the Cookbooks are available here.
What sector-specific methodologies are accepted?
Currently, the Climate Dividends association recognizes the sector-specific methodologies proposed by the Net Zero Initiative, Riverse and Puro Earth.
Can I propose a new impact measurement methodology?
A Contributing Entity can propose a new methodology if no methodology applicable to its Solution is already validated by the Climate Dividends Association. The methodology must abide by the general principles of the Climate Dividends Protocol and the Contributing Entity must justify it.
The methodology will be reviewed and challenged by the Climate Dividends Association (in collaboration with the Contributing Entity).
If and once validated by the Climate Dividends Association, it will be made publicly available for other entities wishing to evaluate the impact of similar solutions.
Cool Roof example
Cool Roof France is a company who paints commercial buildings roofs with a reflective paint in order to improve thermal comfort and reduce the use/need of cooling systems (using the Albedo effect). See YouTube video below:
https://www.youtube.com/watch?v=g3ZDDFUeKU8
As you can imagine, there was no off-the shelf methodology for cool roofing techniques so they had to develop their own comparative GHG assessment methodology.
➡️ Therefore, they set up a complete methodology, compliant with the Climate Dividends Protocol, and we supported them to challenge how it was built, especially:
Defining the right reference scenario and collecting the right data
Selecting the relevant data sources
Formulating robust hypothesis when needed
You can find here:
The methodology that has been made public on cool roofing - the “cool roofing cookbook” 🔗
Its concrete use in the 2023 SDD of Cool Roof 🔗
When will Nature-Based solutions be included in the Climate Dividends initiative?
Nature-based solutions are currently not eligible.
Although we recognise the interest and relevance of nature-based solutions to reach the global Net Zero, we have decided to temporarily (for the beginning) exclude them for several reasons: Most nature-based activities are not able to demonstrate a storage of CO2 emissions for more than 100 years (as recalled in the Be Zero Carbon article).
The Climate Dividends Association has limited capacity for the time being to deal with this complex area. The exclusion criterion in particular will be re-evaluated and might be removed at a later stage.
About the Association
What's the difference between a user and a member?
The "users" of Climate Dividends are basically the companies which issue Climate Dividends to measure and value the positive climate contribution of their Solution. The users are not necessarily members of the Association. In fact the majority of our "users" are not "members"!
As we're a non-profit organization of general interest, individuals and organizations can choose to become "members" of our Association. The "members" are basically individuals and organizations who pay a membership fee, usually to support our work. They are not necessarily "users" of Climate Dividends - for instance, some members are individuals who wish to support our work but wouldn't be able to "use" it since they are not companies.
How to become a member of the Association?
To join the Association as a member, you can go directly to our HelloAsso page and pay the membership fees. The fees are differentiated if you're an individual or a company/an investor.
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