ENECO REDD+ CODE OF CONDUCT

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1 CODE OF CONDUCT FOR REDD+ Page 0

2 Introducton Deforestaton and forest degradaton are the second largest cause of global warmng, responsble for up to 20% of global anthropogenc CO 2 emssons 1. After a long perod of development, a consensus emerged at the 2007 UNFCCC negotatons n Bal that a new ncentve framework was needed to support Reducng Emssons from Deforestaton and Forest Degradaton n developng countres ncludng the enhancement of forest carbon stocks, conservaton and sustanable management of forests (REDD+). In 2010 at COP 16 Cancun, a global framework was agreed on REDD+. However, the detals of how the REDD+ framework wll be structured are not clear yet and current proposals cover both market and non market mechansms. Lnkng REDD+ to carbon markets could provde mportant opportuntes to moblze the requred fnance to effectvely combat deforestaton, mprove lvelhoods and reduce the assocated loss of bodversty. Nonetheless, the role of carbon offset s stll hotly debated, one of the reasons beng that REDD+ credts do not automatcally acheve reductons n net carbon emssons and mght even be seen as green-wash n some crcles. Eneco s nterested n engagng n REDD+ early acton projects to support to structure ths new mechansm and make sure that REDD+ s mplemented through transparent and ndependent processes, all necessary safeguards are respected leadng to hgh qualty, addtonal and envronmentally robust projects. Eneco would lke to promote REDD+ early actons by assstng n the development of projects whch are nested nto natonal strateges. Eneco wshes to create best practces for prvate sector engagement n REDD+ wth ths Code of Conduct whch wll be vald for both voluntary as well as for potental future complance markets and may be made publcly avalable for other nvestors, sponsors and partners. Furthermore, the purpose of devsng ths Code of Conduct s so that the ratonale for Eneco s Carbon Desk engagng n REDD+ s clearly understood wthn and outsde the organsaton. 2. Scope & applcablty The scope of ths Code of Conduct s for all the REDD+ actvtes that Eneco s drectly nvolved n,.e. projects that Eneco develops or supports n any way ether for ts own compensaton, to generate carbon credts or to create learnng and knowledge. However, for projects n whch Eneco has lmted tself to buyng/tradng of ssued carbon credts, the scope and applcablty of ths Code of Conduct s lmted to the leadng ndcator as well as to the ndcators to v of Prncple 1 and to of Prncple 2 n artcle 5. The applcablty of ths Code s to ensure that stakeholders nterests are duly consdered at the approprate level n the REDD+ engagements Eneco makes, whlst smultaneously achevng the busness goals specfed under secton 3 that Eneco has attached to ts REDD+ actvtes. 1 IPCC (2007); IPCC Fourth Assessment Report: Clmate Change, Geneva 2007; and van der Werf, G.R., D.C. Morton, R.S. DeFres et al (2009); CO 2 emssons from forest loss, Nature Geoscence 2, Page 1

3 3. Objectves Eneco s objectves from engagng n REDD+ projects that generate credts ntended for use as voluntary offsets or other purposes are: To ensure that REDD+, amongst the famly of mtgaton actons that are used to combat clmate change, receves support and recognton as an mportant tool. To support an effectve, effcent and equtable nternatonal REDD+ mechansm by establshng well desgned projects wth good governance that reduce carbon emssons, protect bodversty, respect the rghts of ndgenous people and forest communtes and smultaneously contrbutes to natonal level REDD+ programs e.g. through testng approaches, settng a montorng baselnes and mplementng plot actvtes. To gan knowledge and to enhance Eneco's reputaton as a company commtted to nnovaton n sustanable development and tacklng clmate change by fundng REDD+ actvtes, ncludng demonstraton actvtes, awareness buldng and sharng nformaton/experences wth partners, sponsors and other nvestors commtted to sustanable development ntatves. 4. Relaton to busness and sustanablty strateges Eneco s dedcated to sustanablty, local solutons and cooperaton wth ts customers. Eneco, n lne wth ts sustanablty strategy has become a Clmate Saver, partnerng wth WWF n Furthermore, Eneco havng recognsed that bomass for energy can be one of the (n)drect drvers for deforestaton has establshed a sustanablty polcy for bomass and bofuels n place to avod such negatve mpacts of ts operatons, projects and purchasng agreements. The relaton to Eneco s busness strategy s that Eneco consders REDD+ to be a potental complance nstrument n the future and as a possble expanson to current operatons for the Eneco s Carbon Desk. It s therefore mportant to enter the REDD+ market at ths moment: To explore and gan experence n developng REDD+ projects; To poston Eneco as a frst mover n the newly developng REDD+ market; To develop a long term strategy for nvolvement n the REDD+ market n order to antcpate potental future developments n the EU ETS. Besdes the lnk wth the busness strategy, there s also a lnk wth the sustanablty strategy of Eneco. Ths means that Eneco also conducts tself as a corporate ctzen, rather then a company solely pursung ts busness strategy: The REDD+ engagement shows that Eneco s nvolved n socal themes besdes sellng energy and makng a proft; Preventng deforestaton and forest degradaton s n lne wth the sustanable strategy of Eneco; REDD+ engagement, ncludng ths Code of Conduct s a result of the strategc agreement wth WWF and of Eneco s membershp of IUCN NL s Leaders for Nature. 5. General Prncples of REDD+ nvolvement, Crtera and Indcators REDD+ offers a unque opportunty to address both the consequences of clmate change and the underlyng causes of on-gong forest loss and forest degradaton, whlst beneftng the planet s bodversty and peoples. Snce a Code of Conduct for REDD+ at company level s new and nnovatve and there are no examples yet, Eneco chose to adhere to the 5 gudng prncples for REDD+ as defned by WWF, Greenpeace and Care although they were not Page 2

4 desgned for corporate level engagements. These prncples are nonetheless useful to descrbe the objectves of ths Code of Conduct. They are fundamental statements about the desred outcome and are not ntended to be verfed. These prncples are translated nto crtera n Eneco s sphere of nfluence. The crtera set out the condtons whch need to be met by Eneco n order to delver on a prncple. Besdes the qualtatve crtera mentoned below, a more detaled verson of these crtera, ncludng quanttatve delverables can be found n Annex 1. The followng leadng ndcator arguably delvers on all 5 prncples and s therefore mentoned separately here: Eneco only trades or uses credts that were ndependently verfed and certfed aganst the hghest avalable standards whch are currently VCS 2 and CCB 3 and only supports or develops projects that were n the process of gettng certfcaton aganst both of these standards. Some other crtera/ndcators are also covered va ths leadng ndcator, and are mentoned separately to hghlght areas where Eneco has partcular nfluence and responsblty. Prncple 1: CLIMATE. REDD+ demonstrably contrbutes to greenhouse gas emsson reductons. Crteron (a): Eneco s support for REDD+ results n real emsson reductons or removals. Indcator:. See leadng ndcator above.. Only REDD+ credts that are regstered wth a credble regstry are traded/used.. Eneco engages only n projects wth conservatve baselnes based on credble hstorcal deforestaton data. Crteron (b): Eneco adheres to the supplementarty prncple. Indcators: v. Eneco set a voluntary target of 100% carbon neutralty for the nternal carbon footprnt; a. By 2013 the carbon emsson s reduced by 50% (compared to 2007) accordng to art. 4.1 of Addendum 1 of the Clmate Savers program agreed wth WWF on 23 September 2010; b. Eneco uses offsets (ncludng REDD+ credts where approprate) for compensatng for the remanng emssons. v. Offset credts that were used to reach the voluntary target were demonstrably retred. Crteron (c): Eneco s REDD+ actvtes adheres to, and contrbutes to, host country polcy development and good governance ntatves. Indcators: v. Eneco engages only n projects n host countres that are workng on a natonal REDD+ strategy (e.g. as part of the UN REDD+ program or other smlar programs). v. Eneco engages only n countres that support projects as part of ther natonal strategy and wll allow for accountng at multple scales (e.g. as suggested by the nested approach). v. Eneco ensures n ts contracts that projects have to comply wth host country regulaton and that the projects are recognsed under the host country s natonal REDD+ strategy. 2 VCS stands for Verfed Carbon Standard 3 CCB stands for Clmate, Communty and Bodversty Standard Page 3

5 Prncple 2: BIODIVERSITY. REDD+ mantans and/or enhances forest bodversty and ecosystem servces. Crteron: Eneco prortses REDD+ projects/credts that enhance bodversty. Indcator:. See leadng ndcator above.. Eneco engages only n REDD+ projects/credts that are n/from globally mportant stes for bodversty 4 and/or have acheved CCB gold level certfcaton n relaton to exceptonal bodversty benefts.. Eneco engages only n REDD+ projects/credts that promote conservaton of natural forests, ther ecosystem servces and bologcal dversty. Prncple 3: LIVELIHOODS. REDD+ contrbutes to sustanable and equtable development by strengthenng the lvelhoods of forest-dependent communtes. Crteron: Eneco prortses REDD+ projects/credts that enhance the lvelhoods of forestdependent communtes. Indcator:. See leadng ndcator above.. Eneco cooperates wth local organsatons such as NGOs, communty based organsatons etc. on the ground to ensure communty nvolvement, full partcpaton of cvl socety and achevement of approprate non-carbon related goals as well. Prncple 4: RIGHTS. REDD+ recognzes and respects the rghts of ndgenous peoples and local communtes. Crteron: Eneco engages n REDD+ projects/credts that recognze and respect the rghts of ndgenous peoples and local communtes. Indcator:. See leadng ndcator above.. Eneco verfes the proper executon of stakeholder consultaton accordng to Free Pror Informed Consent prncples and makes sure that there s a proper grevance procedure. Prncple 5: FAIR & EFFECTIVE FUNDING. REDD+ moblzes mmedate, adequate and predctable resources for acton n prorty forest areas n an equtable, transparent, partcpatory and coordnated manner. Crteron: Eneco moblzes resources n lne wth ths prncple. Indcator:. Eneco not only purchases REDD+ credts but n some cases also covers part of the upfront development costs that enable a REDD+ project to start mplementaton.. Carbon revenues flow through to beneft the affected communtes n an equtable and transparent way such that communtes are rewarded farly for ther support of the project. 4 Stes are consdered globally mportant f they are known to hold one or more globally threatened speces, endemc speces, globally sgnfcant concentratons or populatons, sgnfcant examples of bologcal communtes, or any combnaton of these features. For more nformaton: Page 4

6 6. Montorng, reportng & evaluaton The Code should be a lvng and evolvng document, based on self reflecton and evaluaton, whose evoluton may be governed by the followng: The project developer should draw up an Envronmental Montorng Plan (EMP) to montor the gudelnes and crtera for all the REDD+ actvtes, and the effects of the REDD+ actvtes on clmate, lvelhoods and bodversty, asde from the montorng and verfcaton mechansms that the VCS and CCB Desgn Document requre. Ths Code of Conduct wll be executed n support wth Eneco s Sustanablty Offce and may be audted by an ndependent external party when necessary. Outcomes of early acton REDD+ should be used to reflect upon and revse the Code of Conduct as necessary to contrbute to knowledge development and learnng. Communcatons of Eneco actvtes n the REDD+ should be carefully desgned wth all stakeholders and prepared to reflect jont polces and a constructve agenda. Dsclamer The Code of Conduct s based on WWF's fve REDD+ Gudng Prncples. The process of formulatng ths Code was facltated by IUCN Natonal Commttee of the Netherlands and benefted from the feedback of both nternatonal as well as local NGO's, partcularly WWF, and benefted from a grant of the former Dutch Mnstry of Housng, Spatal Plannng and the Envronment. Ths Code of Conduct does not necessarly reflect the poston of WWF, IUCN-NL nor other consulted NGO's. For questons/comments please contact: Edt Kss e.kss@eneco.nl Carbon Portfolo Manager Eneco Energy Trade B.V. Page 5

7 Annex I (a) :Checklst for projects where Eneco s drectly nvolved (lght blue felds to be flled out) Prncple 1: CLIMATE. REDD+ demonstrably contrbutes to greenhouse gas emsson reductons. Crteron (a): Eneco s support for REDD+ resulted n real emsson reductons or removals. Only REDD+ credts that are regstered wth a credble regstry were traded/used. 1. Credts w ere checked n Eneco's regstry account Eneco engaged only n projects wth conservatve baselnes based on credble hstorcal deforestaton data. 1. Check project baselne Crteron (b): Eneco adhered to the supplementarty prncple. v Eneco set a voluntary target of 100% carbon neutralty for the nternal carbon footprnt. 1. Voluntary emsson reducton target checked by Internal Sustanablty Manager / Progress Report /GRI a By 2013 the carbon emsson s reduced by 50% ( compared to 2007) accordng to art. 4.1 of Addendum 1 of the Clmate Savers program agreed wth WWF on 23 September Calculaton by Internal Sustanablty Manager/ GRI b Eneco used offsets (ncludng REDD+ credts where approprate) for compensatng for the remanng emssons. 1. Calculaton by Internal Sustanablty Manager/ GRI v Offsets that were used to reach the voluntary target were demonstrably retred. 1. Prepare and store a report about retred credts at the end of the year Crteron (c): Eneco s REDD+ actvtes adhered to, and contrbuted to, host country polcy development and good governance ntatves. v Eneco engaged only n projects n host countres that are workng on a natonal REDD+ strategy (e.g. as part of the UN REDD+ program or other smlar programs). 1. Check whether the host country s w orkng on a natonal REDD+ strategy v Eneco engaged only n countres that support projects as part of ther natonal strategy and wll allow for accountng at multple scales (e.g. as suggested by the nested approach). 1. Check whether natonal programme mentons projects, and whether t s n favour of subnatonal baselnes and/or nested approach v Eneco ensured n ts contracts that projects have to comply wth host country regulaton. 1. Check artcle on natonal law / host country s ncluded contract by a lawyer 2. Carry out external due dlgence on the natonal law s and regulatons of the host country w th respect to land ow nershp and land use rghts, forest and plantaton management, forest and plantaton explotaton, protected areas, w ldlfe management, huntng, spatal plannng and the rules arsng from sgnng of nternatonal conventons n partcular Page 6

8 Prncple 2: BIODIVERSITY. REDD+ mantans and/or enhances forest bodversty and ecosystem servces. Crteron: Eneco prortsed REDD+ projects/credts that enhance bodversty. Eneco engaged only n REDD+ projects/credts that are n/from globally mportant stes for bodversty and/or have acheved CCB gold level certfcaton n relaton to exceptonal bodversty benefts. 1. Check w hether the project s located n a globally mportant ste for bodversty (such as hotspot, KBA etc) or w hether t has Gold Level CCB certfcaton on bodversty Eneco engaged only n REDD+ projects/credts that promote conservaton of natural forests, ther ecosystem servces and bologcal dversty. 1. Check that the project does not nvolve natve forest converson 2. Check that the project does not threaten bodversty and ecosystem servces (especally w hen non-natve speces are nvolved) Prncple 3: LIVELIHOODS. REDD+ contrbutes to sustanable and equtable development by strengthenng the lvelhoods of forest-dependent communtes. Crteron: Eneco prortsed REDD+ projects/credts that enhance the lvelhoods of forest-dependent communtes. Eneco cooperated wth local NGOs on the ground to ensure communty nvolvement, full partcpaton of cvl socety and achevement of approprate non-carbon related goals as well 1. Descrbe stakeholders dentfcaton process and nvolvement n project desgn phase 2. Execute an envronmental and socal assessment n the project desgn phase 3. Consult wth local NGO how nterest of local communty are duly served as documented by an external report Prncple 4: RIGHTS. REDD+ recognzes and respects the rghts of ndgenous peoples and local communtes. Crteron: Eneco engaged n REDD+ projects/credts that recognze and respect the rghts of ndgenous peoples and local communtes. Eneco verfed the proper executon of stakeholder consultaton accordng to Free Pror Informed Consent prncples and made sure that there was a proper grevance procedure. 1. FPIC s carred out and documented by Project Developer 2. Consult wth local NGO w hether FPIC has been carred out approprately Prncple5: FAIR & EFFECTIVE FUNDING. REDD+ moblzes mmedate, adequate and predctable resources for acton n prorty forest areas n an equtable, transparent, partcpatory and Crteron: EET moblzed resources n lne wth ths prncple. I II Eneco not only purchased REDD+ credts but n some cases also covered part of the upfront costs that enabled a REDD+ project to start mplementaton. 1. Cost pad documented Carbon revenues flow through to beneft the affected communtes n an equtable and transparent way such that communtes are rewarded farly for ther support of the project. 1. Beneft sharng agreement s set up and transparently publshed Page 7

9 Annex I (b) :Checklst for projects where Eneco s ndrectly nvolved Prncple 1: CLIMATE. REDD+ demonstrably contrbutes to greenhouse gas emsson reductons. Crteron (a): Eneco s support for REDD+ resulted n real emsson reductons or removals. Only REDD+ credts that are regstered wth a credble regstry were traded/used. 1. Credts w ere checked n Eneco's regstry account Eneco engaged only n projects wth conservatve baselnes based on credble hstorcal deforestaton data. 1. Check project baselne Crteron (b): Eneco adhered to the supplementarty prncple. v Eneco set a voluntary target of 100% carbon neutralty for the nternal carbon footprnt. 1. Voluntary emsson reducton target checked by Internal Sustanablty Manager / Progress Report /GRI a By 2013 the carbon emsson s reduced by 50% ( compared to 2007) accordng to art. 4.1 of Addendum 1 of the Clmate Savers program agreed wth WWF on 23 September Calculaton by Internal Sustanablty Manager/ GRI b Eneco used offsets (ncludng REDD+ credts where approprate) for compensatng for the remanng emssons. 1. Calculaton by Internal Sustanablty Manager/ GRI v Offsets that were used to reach the voluntary target were demonstrably retred. 1. Prepare and store a report about retred credts at the end of the year Crteron (c): Eneco s REDD+ actvtes adhered to, and contrbuted to, host country polcy development and good governance ntatves. v Eneco engaged only n projects n host countres that are workng on a natonal REDD+ strategy (e.g. as part of the UN REDD+ program or other smlar programs). 1. Check whether the host country s workng on a natonal REDD+ strategy v Eneco engaged only n countres that support projects as part of ther natonal strategy and wll allow for accountng at multple scales (e.g. as suggested by the nested approach). 1. Check whether natonal programme mentons projects, and whether t s n favour of subnatonal baselnes and/or nested approach v Eneco ensured n ts contracts that projects have to comply wth host country regulaton. 1. Check artcle on natonal law / host country s ncluded contract by a lawyer 2. Carry out external due dlgence on the natonal law s and regulatons of the host country w th respect to land ow nershp and land use rghts, forest and plantaton management, forest and plantaton explotaton, protected areas, w ldlfe management, huntng, spatal plannng and the rules arsng from sgnng of nternatonal conventons n partcular Page 8

10 Prncple 2: BIODIVERSITY. REDD+ mantans and/or enhances forest bodversty and ecosystem servces. Crteron: Eneco prortsed REDD+ projects/credts that enhance bodversty. Eneco engaged only n REDD+ projects/credts that are n/from globally mportant stes for bodversty and/or have acheved CCB gold level certfcaton n relaton to exceptonal bodversty benefts. 1. Check w hether the project s located n a globally mportant ste for bodversty (such as hotspot, KBA etc) or w hether t has Gold Level CCB certfcaton on bodversty Eneco engaged only n REDD+ projects/credts that promote conservaton of natural forests, ther ecosystem servces and bologcal dversty 1. Check that the project does not nvolve natve forest converson 2. Check that the project does not threaten bodversty and ecosystem servces (especally w hen non-natve speces are nvolved) Prncple 3: LIVELIHOODS. REDD+ contrbutes to sustanable and equtable development by strengthenng the lvelhoods of forest-dependent communtes. Crteron: Eneco prortsed REDD+ projects/credts that enhance the lvelhoods of forest-dependent communtes. Eneco cooperated wth local NGOs on the ground to ensure communty nvolvement, full partcpaton of cvl socety and achevement of approprate non-carbon related goals as well 1. Descrbe stakeholders dentfcaton process and nvolvement n project desgn phase 2. Execute an envronmental and socal assessment n the project desgn phase 3. Consult wth local NGO how nterest of local communty are duly served as documented by an external report Prncple 4: RIGHTS. REDD+ recognzes and respects the rghts of ndgenous peoples and local communtes. Crteron: Eneco engaged n REDD+ projects/credts that recognze and respect the rghts of ndgenous peoples and local communtes. Eneco verfed the proper executon of stakeholder consultaton accordng to Free Pror Informed Consent prncples and made sure that there was a proper grevance procedure. 1. FPIC s carred out and documented by Project Developer 2. Consult wth local NGO w hether FPIC has been carred out approprately Prncple5: FAIR & EFFECTIVE FUNDING. REDD+ moblzes mmedate, adequate and predctable resources for acton n prorty forest areas n an equtable, transparent, partcpatory and Crteron: EET moblzes resources n lne wth ths prncple. I Eneco not only purchased REDD+ credts but n some cases also covered part of the upfront costs that enabled a REDD+ project to start mplementaton. 1. Cost pad documented II Carbon revenues flew through to beneft the affected communtes n an equtable and transparent way such that communtes are rewarded farly for ther support of the project. 1. Beneft sharng agreement s set up and transparently publshed Page 9

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