Integrity is at the heart of what we do at TEM. We go beyond international requirements by carrying out our own extensive due diligence for every project, as well as following an ESG screening process for new clients.
Our due diligence process
Our thorough due diligence process ensures we only invest in the highest quality projects with real and lasting impact. We carry out this process for every project we undertake and invest in to ensure its quality, integrity and measurable carbon abatement impact. This process is critical in confirming that emission reductions achieved through the projects are additional, permanent, and accurately accounted for. It also verifies the co-benefits of the projects beyond carbon emissions.
Our process includes:
Ownership and land use rights verification
Verification of the information used to establish ownership of the project and the rights to offset units.
Additionality, permanence, leakage checks
Investigation and confirmation of project’s additionality, permanency, leakage and transparency to ensure it is a high-quality project.
Best practice methodology
Assessment of the in-situ application of the relevant carbon project methodology to ensure it is best practice.
Social, human rights and political review
Assessment and confirmation that there is no project association with human rights issues, bribery, corruption, environmental damage or landholder mistreatment.
Legal review
Checking the legality of projects and ongoing regulatory compliance.
Financial analysis
Assessment of the financial due diligence of the project stakeholders.
Community perception
Assessment of local community perception of projects.
Reputational risks
Assessment of reputational risks, including any issues that might bring reputational harm to TEM’s partners, such as the reputation of the project developer.
Checking impacts beyond carbon
Assessment and verification of the co-benefits and Sustainable Development Goal (SDG) impacts of the project, for example biodiversity improvements, health benefits and economic impacts, such as local employment.
Our ESG screening process
As part of TEM’s focus on integrity, we conduct an Environmental, Social and Governance (ESG) screening process to ensure alignment before engaging with potential partners.
This creates a shared understanding between TEM and potential partners about the responsible use of carbon credits, ensuring credits are contributing towards the genuine decarbonisation of our economy and that credits are utilised in a manner that is consistent with our shared values and principles.
This process is outlined below.
Step 1: Screening based on industry type
For example: TEM does not work with companies in the following industries: tobacco, pornography, companies involving modern slavery, weapons manufacturing and whaling.
Step 2: Screening for reputational/ values-alignment risks
For example, TEM does not work with companies where there is a clear conflict with our company values.
Step 3: ‘Critical question’ screening
TEM screens companies based on key questions including:
- Has the company received any red flags/strikes against its name from a regulator in the last five years?
- Has the company been accused of financial misconduct?
Step 4: Screening for alignment with TEM’s values
We examine areas including: Does the company have a well-developed decarbonisation strategy that includes the immediate use of offsets?