Frequently Asked Questions

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, are international in scope
• We work with non-French companies - for example Waste Robotics which is based in Canada
• We have in our technical committee and network of experts, several members of international institutions by nature, like the CDP.

Beyond these first elements, we wish as much as possible to be recognized internationally from the start - and we are currently in discussions with several companies, government organizations, coalitions and investors abroad.

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To ensure resilience, we rely on multiple sources of funding. We're 100% transparent about the funding we receive, as well as how we spend it. To that effect, you can check the dedicated section in the About us page. 

Our main sources of fundings are:

• Donations from our Founding members: ADEME, Mirova, Team For The Planet, Sweep, 2050, Fondation Kanopée Partage
• Donations from other donors: RAISE Sherpas Association for instance or Clément Alteresco (founder of Morning Coworking)
• Memberships fees (people and organization who become members of the Association)
• From 2025 on, we'll also bill application and processing fees to Contributing Entities - the rates are publicly accessible in the Start with us section. 

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"!

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As we're a non-profit organization of general interest, individuals and organization can choose to become "members" of our Association. The "members" are basically individuals and organization 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. 

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. 

No, Climate Dividends cannot be monetized or sold. Unlike carbon credits, which are tradable assets, Climate Dividends are non-financial, non-tradable metrics that reflect the positive climate contribution of a company.

They are distributed exclusively to shareholders as extra-financial information, similar to how financial dividends represent economic value creation. Their purpose is to demonstrate and quantify a company’s contribution to global decarbonization, not to serve as a tradable commodity.

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Climate Dividends are inspired by financial dividends but with a climate-related angle:

→ They are distributed to the company's shareholders.

→ They are distributed every year, in reporting year N+1 for results achieved in reporting year N.

→ They materialise the link between the shareholders and the value created by the company. In the case of financial dividends, it is the creation of financial value (the profit) that is partly distributed to shareholders; in the case of Climate Dividends, it is the creation of climate value (the company’s contribution to global net zero emissions, measured in avoided or removed emissions) of which the evidence is distributed to shareholders.

→ Even if projections of Climate Dividends can be made, Climate Dividends are only accounted for when they are issued and actually distributed to shareholders.

→ Unlike financial dividends, Climate Dividends are not money. They are not a financial flow, nor a financial asset, nor can they be monetised. They are just additional extra-financial information.

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Climate Dividends can only be issued by companies that help avoid emissions or remove them, not to those that have achieved emission reductions.

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Removing emissions is quite straight forward — taking GHGs out from the air.

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However, avoided emissions and the notion of carbon footprint reduction (especially scope 3) is more nuanced. Check Mr Bricks' story to understand the differency easily between emissions reductions and avoided emissions.

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Here’s how they differ:

→ For carbon footprint reduction, the perspective is that of the company and, more specifically, GHG inventory accounting, where the emissions from each category of the GHG inventory are compared year-on-year.

→ For avoided emissions, the perspective is that of the customer, where the emissions in two situations are compared, one with the company’s solution and the other, the most likely situation without the solution (i.e., with another company's solution or with a completely different solution that meets the same customer's functional needs).

As a result, even if the low-carbon solutions can reduce the company's GHG inventory(e.g., if the company replaces its carbon-intensive solutions with these low-carbon solutions), the quantification of the decarbonization impact is different. Both metrics are complementary but lead to different accounting and a different lens on climatei mpact.

For more information on avoided emissions, you can have a look at the ICE report or the WBCSD Guidance on Avoided Emissions and for more specific information on what qualifies for climate dividends, please read our Protocol.

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Climate Dividends, by essence, derive from the conversion of one ton of CO2_e avoided (or removed) into extra-financial information.

Therefore, avoided emissions are the starting point for Climate Dividends.

However, the main differences lie in:

• Eligibility criteria to issue Climate Dividends
• Existence of an audit in the process (mandatory) - Validation and Verification
• Mandatory transparency (the claim is published in the Association's registry)
• Attribution: avoided emissions are calculated throughout the LCA, but the Climate Dividend is "attributed to" the company according to an attribution key, which should reflect as accurately as possible "how much" it is responsible for these avoided emissions. The main ways of establishing the attribution key are (1) costs and (2) added value.

Climate Dividends cannot be used to offset a carbon footprint or to claim carbon neutrality.

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.

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Climate Dividends and carbon credits are fundamentally different, even if they are complementary in measuring the positive contribution of activities to global decarbonisation.

While carbon credits are tradable assets that can be sold to any buyer (often functioning as an offsetting tool for the buyer), Climate Dividends are non-tradable, extra-financial information distributed exclusively to shareholders, akin to financial dividends that validate a company’s creation of economic value—for the climate.

Furthermore, the scope of projects eligible for Climate Dividends is significantly broader. Unlike carbon credits, which require financial additionality (proof that the project depends on carbon credit revenue to be viable), Climate Dividends recognize all projects contributing to decarbonisation, regardless of the company’s economic situation, as long as it removes or avoids emissions and validates the eligibility criteria.

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Check this dedicated page for more details. 

Climate Dividends are designed to accelerate the funding of the ecological transition by redirecting financing towards climate solutions.

They provide a standardised, shared and transparent process to measure the positive climate contribution of a company and a way to trace it back in a tangible and traceable manner to investors. They enable to concretly quantify the companies’ climate performance and the investors’ capital allocation in climate solutions and thus to start integrating this climate positive contribution in financial decisions and valuation, for real.

The “standardisation value” of Climate Dividends is already well advanced and the financial use case is progressing swiftly, correlated to their increasing market adoption and coverage.

Very concretely, companies and investors who have already joined the initiative already use Climate Dividends in the following use cases:

• Robustly and transparently prove the climate positive contribution of a solution
• Benefit from methodological support and resources
• Attract and engage with “impact” investors (for companies)
• Negotiate better debt interest rates
• Value existing work on avoided/removed GHG emissions
• Leverage the positive contribution of the activity as a powerful communication asset
• Engage employees (and stakeholders) in the company’s transition plan
• Make informed business and strategic decisions

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The time it takes depends enormously on what has already been done in terms of comparative impact assessments:

• If everything is already ready on the shelf, it only takes the time of the VV + a few hours of formalisation to match the claim submission format - the SDD.
• Otherwise, it takes additional time to define the scope, collect the data, define the methodology, do the calculations...etc - which can take several weeks or even months.

You can check an indicative timeline in the Start with us page and/or get in touch to see for your particular case. 

To issue and distribute Climate Dividends, the Contributing Entity must complete the following 5-steps process. Worth noting that the process can be led by the company’s investor.

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.

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.

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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.

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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.

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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."

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The Association has a list of the accredited VVs that can be updated when a new VVs is accredited. 

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As per stated in the Protocol:

"To be accredited by the Climate Dividends Association, Validators and verifiers must:

• ‍Have validated the Climate Dividends accreditation course once available
• Justify an ISO 17029 accreditation or equivalent (i.e. ISO 14065) or be able to conduct a CSRD audit according to their local regulations

The Association intends to publish a proprietary, more adapted accreditation process that will include training and support in 2025."

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As explained in the About us section, the core tasks of the Association are to:

1. Define how Climate Dividends work: impact assessment methodologies, issuance and distribution process, usage and communication guidelines
2. Coordinate Climate Dividends’ issuance and distribution: ensure transparency and traceability, certify the auditors, support the users
3. 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. 

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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.

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Currently, the Climate Dividends association recognizes the sector-specific methodologies proposed by the Net Zero Initiative, Riverse and Puro Earth are validated.
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The guidance by the Record Association on the waste management sector is also accepted, with further explanations detailed in the cookbook #6.

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.

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.

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We charge fees to cover part of our operating costs as a non-profit. 

One single, comprehensive price covers the entire process: from the initial eligibility check to technical advisory and project management, as well as tailored support for communicating about the initiative and Climate Dividends. This includes engaging both internal stakeholders (employees, management team) and external audiences (customers, partners, and especially shareholders).

They cover the intervention of the independent third-party, recognised by the association, to validate the methodology and its compliance to the Climate Dividends protocol and the verification of the activity data.

The price varies depending on the VV (and on the complexity of the claim).

They can be paid by the company or the investor, directly to the VV.

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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.

Avoided emissions refer to the CO2e emissions that are prevented from being released into the atmosphere by implementing a specific solution, compared to a baseline scenario where the solution does not exist. For example, installing a more energy-efficient building system can avoid emissions by reducing energy consumption compared to conventional systems.

‍Emissions reductions, on the other hand, involve directly cutting down a company’s existing CO2e emissions, such as switching to renewable energy sources or optimizing production processes to emit less carbon.

The key distinction is that emissions reductions focus on lowering an organization’s current footprint, while avoided emissions evaluate the potential impact of a solution in preventing emissions that would have otherwise occurred in a given scenario. Both are complementary approaches to achieving global decarbonization goals.

In addition to generic frameworks for induced emissions (e.g GFANZ, CERES), there is a specific value chain and ecosystem for avoided emissions within which Climate Dividends hold a special place.

You can support us by becoming a member, by donating or by introducing us to relevant contacts (companies avoiding or removing emissions, investors, or standardisation bodies).

We're always open to a helping hand, so please feel free to contact us if you'd like to support us in any way. Thank you!

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