DATA FLOWS → IMPACT EVIDENCE
Impact Evidence
Proving that interventions actually work – the science of
additionality, permanence, and attribution.
In 30 Seconds
Impact evidence answers the hardest question in sustainability: did your intervention actually make a difference? It's not enough to plant trees, install solar panels, or protect forests. You must demonstrate that the outcomes wouldn't have happened anyway.
Additionality
Would it have happened without your intervention?
Permanence
How long will the benefit last?
Leakage
Did the problem just move somewhere else?
Attribution
Can you link your action to the outcome?
Why it matters now: Carbon markets are bifurcating on quality. ICVCM's Core Carbon Principles now define integrity standards. Article 6.4 is issuing its first credits in 2026. Rating agencies like Sylvera, BeZero, and Calyx Global price quality differences. High-integrity credits trade at 46-360% premiums over low-quality alternatives.
Where This Fits
Impact evidence is the fourth pillar of our Data Flows evidence types – completing Pillar 1 alongside MRV, Traceability, and Disclosure Data:
Pillar 1: Evidence Types
How Evidence Connects
MRV tells you what happened (measurements).
Traceability tells you where it came from (origin).
Disclosure Data tells stakeholders (reporting).
Impact Evidence proves it actually mattered (causality).
The critical distinction: MRV measures what happened. Impact evidence proves why it matters – demonstrating that outcomes wouldn't have occurred without intervention, and that benefits are real, durable, and not displaced elsewhere.
The Core Concepts
Four principles determine whether a sustainability claim represents real impact or creative accounting. These concepts underpin carbon credit integrity, impact investment evaluation, and outcome-based contracting.
Additionality
"Would this have happened anyway?"
The most contested concept in carbon markets. A project is additional if it would not have occurred without carbon finance. This requires demonstrating that the project faces barriers (financial, technical, institutional) that carbon revenue overcomes.
Without additionality, carbon credits represent business-as-usual emissions reductions that would have happened regardless – buyers pay for nothing, sellers profit from activities they would have done anyway.
Additionality Tests
- Financial: Project not viable without carbon revenue
- Barrier: Non-financial obstacles prevented implementation
- Common practice: Activity not standard in region/sector
- Legal: Not required by existing law or regulation
- Performance: Exceeds business-as-usual benchmarks
The challenge: Proving a counterfactual is inherently uncertain. How do you prove something wouldn't have happened? This is why additionality remains the most debated and gamed aspect of carbon markets.
Permanence
"How long will the benefit last?"
Carbon stored today can be released tomorrow. Forests burn. Projects fail. Landowners change their minds. Permanence asks whether emission reductions or removals will endure for climate-relevant timescales (typically 100+ years for removal claims).
This creates fundamental asymmetry: emissions cause permanent atmospheric damage, but many removal methods (especially nature-based) offer only temporary storage with reversal risk.
Risk Mitigation Mechanisms
- Buffer pools: 10-40% of credits withheld as insurance
- Tonne-year accounting: Credits for storage duration, not mass
- Insurance products: Financial coverage for reversals
- Monitoring commitments: Long-term MRV obligations
- Legal covenants: Land use restrictions, conservation easements
Real-world test: California's forest offset buffer pool has been nearly depleted by wildfires, raising questions about whether current buffer rates adequately account for climate-amplified risks.
Leakage
"Did the problem just move somewhere else?"
Leakage occurs when an intervention reduces emissions in one place but causes increases elsewhere. Protecting one forest may simply push logging to an adjacent forest. Reducing one factory's emissions may shift production to a dirtier competitor.
Studies suggest REDD+ forest protection projects achieve only ~25% of claimed reductions when accounting for leakage – deforestation is displaced, not avoided.
Leakage Types
- Activity shifting: Deforestation moves to adjacent areas
- Market leakage: Reduced supply raises prices, driving activity elsewhere
- Ecological leakage: Protecting one ecosystem degrades connected systems
- Life-cycle leakage: Upstream/downstream emissions not captured
Mitigation approaches: Expanded project boundaries, leakage belts (monitoring zones around projects), conservative baseline adjustments, jurisdictional approaches that cover entire landscapes rather than individual sites.
Attribution
"Can you link your action to the outcome?"
Even if outcomes are real, additional, permanent, and not leaked – can you prove yourintervention caused them? Attribution establishes the causal chain between activities and outcomes, especially important when multiple actors contribute.
This is particularly challenging for impact investments: if a social enterprise grows from 20 to 100 employees, how much credit goes to each investor? Attribution requires defensible methodology, not just outcome measurement.
Attribution Methods
- Counterfactual analysis: Compare to control group or baseline
- Theory of Change: Map causal pathways explicitly
- Contribution analysis: Assess role among multiple factors
- Quasi-experimental: Statistical methods when RCTs impossible
- Process tracing: Qualitative evidence of causal mechanisms
Baselines & Counterfactuals
Every impact claim requires a baseline: what would have happened without the intervention? Getting this wrong is the single largest source of over-crediting in carbon markets.
Baseline Approaches
Static Baseline
Fixed at project start. Assumes business-as-usual conditions persist. Simple but prone to over-crediting if conditions change (e.g., regulations tighten, technology improves).
Dynamic Baseline
Updated periodically based on observed trends. More accurate but harder to implement and verify. Better reflects evolving context.
Performance Benchmark
Based on best-available technology or sector average. Only credits performance above the benchmark, not absolute reductions.
Counterfactual Methods
Randomised Control Trials
Gold standard but often impractical or unethical. Randomly assign treatment and control groups, compare outcomes. Rarely used in carbon projects.
Matched Comparison
Select similar sites/entities without the intervention. Compare outcomes to establish counterfactual. Subject to selection bias.
Before/After Analysis
Compare outcomes before and after intervention. Simple but conflates intervention effects with other changes over time.
The Baseline Problem in Practice
Studies of avoided deforestation projects found baseline deforestation rates were overestimated by ~170% on average. Projects claimed credit for preventing deforestation that was never going to happen.
Emerging solutions: Standardised baselines (sector/region-wide rather than project-specific), conservative default assumptions, dynamic recalibration, and independent baseline validation by rating agencies.
Impact Measurement Frameworks
Beyond carbon, broader impact measurement requires systematic frameworks. These apply to impact investing, corporate sustainability programmes, and development interventions.
Theory of Change
Maps the causal pathway from activities to outcomes. Articulates assumptions, identifies intermediate outcomes, and specifies what evidence would confirm or refute the theory.
IRIS+ (GIIN)
The generally accepted impact accounting system for impact investing. Provides standardised metrics across themes (climate, gender, livelihoods) with Core Metric Sets for comparability.
Social Return on Investment (SROI)
Monetises social and environmental outcomes to express impact as a ratio (e.g., £5 of social value per £1 invested). Controversial due to subjectivity in valuation but useful for communication.
SDG Impact Standards
UNDP-backed standards for enterprises and investors embedding SDG impact into strategy, operations, and governance. Certification available for demonstrating genuine SDG contribution.
The Common Thread
All frameworks require specifying the counterfactual (what would have happened otherwise) and the causal mechanism (how your intervention produces outcomes). Without these, you're measuring correlation, not impact.
Credit Quality & Integrity
The voluntary carbon market is bifurcating: high-integrity credits trade at significant premiums while low-quality credits face declining demand. Understanding the quality landscape is essential for buyers, sellers, and intermediaries.
ICVCM Core Carbon Principles
MARKET STANDARDThe Integrity Council for the Voluntary Carbon Market (ICVCM) established 10 Core Carbon Principles (CCPs) in March 2023, now serving as the de facto quality benchmark. CCP-labeled credits trade at 46%+ premiums.
Governance
- • Effective governance
- • Tracking
- • Transparency
- • Robust independent third-party validation
Emissions Impact
- • Additionality
- • Permanence
- • Robust quantification
- • No double counting
Sustainable Development
- • Sustainable development benefits
- • Safeguards
- • Net-zero transition contribution
2025-2026 status: Only ~30% of Climate Action Reserve credits qualify for CCP labels. ICVCM is revising rules on reversals and risk buffers. First Article 6.4 credits expected early 2026.
Article 6.4 (Paris Agreement)
UN MECHANISMThe successor to the Clean Development Mechanism (CDM), operated by the UN. Article 6.4 Emission Reductions (6.4ERs) represent the new compliance-grade carbon unit under the Paris Agreement.
2025-2026 Milestones
- • First methodology approved (landfill gas flaring/use)
- • Five methodological standards adopted (additionality, baselines, leakage, permanence, suppressed demand)
- • 10 designated operational entities accredited
- • First 6.4ERs expected early 2026
- • CDM transition deadline: June 30, 2026
Key Features
- • OMGE: Overall Mitigation in Global Emissions (automatic cancellation)
- • Share of Proceeds: 5% to Adaptation Fund
- • Corresponding adjustments: Prevents double counting with NDCs
- • Host country approval: Required via Designated National Authority
Credit Rating Agencies
Independent rating agencies assess carbon credit quality, enabling price differentiation and informed purchasing decisions. Ratings have become market-moving signals.
| Agency | Scale | Focus | 2025-26 Trends |
|---|---|---|---|
| Sylvera | AAA to B | Field verification, MRV robustness, safeguards | BBB+ credits rose to 31% of retirements; $26/tCO2e for top ARR |
| BeZero | AAA to D | Risk-adjusted scores, likelihood of achieving claimed reductions | Emphasis on granular project-level signals |
| Calyx Global | A+ to C- | Environmental integrity, additionality, permanence | Growing coverage of nature-based projects |
| MSCI | AAA to CCC | Regulatory environment, additionality, co-benefits, Article 6 | BBB+ prices $6.8/tCO2e (up 20% YoY); 360% premium over low-rated |
Who Operates in Impact Evidence
Standard Setters
Defining integrity
ICVCM, Verra, Gold Standard, Article 6.4 Supervisory Body
How do we set bars high enough for integrity without excluding legitimate projects?
Rating Agencies
Assessing quality
Sylvera, BeZero, Calyx Global, MSCI Carbon
How do we create transparent, consistent ratings that buyers can trust?
Verification Bodies
Validating claims
VVBs (Verra), DOEs (Article 6.4), auditors
How do we verify outcomes at scale without compromising rigour?
Project Developers
Generating credits
Carbon project developers, NBS implementers, technology providers
How do we demonstrate real impact while remaining commercially viable?
The Pandion View
Impact evidence is where sustainability meets scientific method. The same rigour applied to clinical trials and academic research must apply to carbon credits and impact claims. Anything less enables greenwashing.
The market is finally demanding proof. High-integrity credits command premiums precisely because buyers recognise that most credits don't deliver what they claim. This isn't a crisis for carbon markets – it's a maturation. Quality differentiation is how markets are supposed to work.
As a hybrid professional, we help clients navigate impact evidence requirements from both sides: for buyers, assessing credit quality and building defensible offsetting strategies; for developers, designing projects that meet emerging integrity standards from the start.
The organisations that invest in robust impact evidence now will own the premium end of the market. Those that don't will find their credits stranded as quality standards tighten.