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The Increasing Market Value of SDG-Linked Carbon Credits

September 27, 2024
1 Min Read

New research from the world's top carbon ratings company, BeZero Carbon, highlights a developing pattern in the carbon market: credits associated with the Sustainable Development Goals (SDGs) of the UN are selling for noticeably more money.

The data shows a notable variation in price in 2023. Carbon credits with claims relating to the Sustainable Development Goals were sold for 106% more than those without. From January 2021 to August 2024, an average premium of 31% was noted, demonstrating the consistency of this trend over time.

 

When the carbon ratings of these credits are taken into account, the price difference becomes even more noticeable. Credits with SDG claims and a rating of "AA," which denotes a high chance of avoiding or removing one tonne of CO2e, sold for more than three times the price of credits with a rating of "C" and no such claims.

 

BeZero Carbon's co-founder and chief innovation officer, Sebastien Cross, underlined the significance of this advancement. According to our most recent study, it is extremely important that carbon markets are learning how to accurately price the effects of credits other than carbon. By 2030, there must be worldwide progress toward the SDGs, but present goals are straying from their intended path.

 

"As corporates are more willing to pay more for credits with SDG claims, carbon markets are playing a bigger role in generating funding to accelerate progress toward SDG goals." There is clearly a market for these credits since consumers increasingly want proof of the validity of the SDG promises made on every credit they acquire. An essential initial step in this process is risk assessments on the SDG claims linked to a credit.

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