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Technology & Data

Trove Unveils VCM Country Opportunity and Risk Index

Climate-focused data and analysis firm Trove has launched its VCM Country Opportunity and Risk Index to help buyers and sellers of carbon credits to assess market-related risks. The country-level index leverages Trove’s country profiles, carbon market data and project-level integrity rating system. It offers a detailed analysis of climate policies, regulations, and political risks in 20 countries hosting over 3,400 voluntary carbon projects, representing more than 80% of all carbon credit issuances, with five more nations slated for inclusion in September. The assessment evaluates seven business risk aspects, including corruption, rule of law, land tenure, climate policy uncertainty, business environment, governance, and political stability. Additionally, it encompasses four measures of carbon trading risk, such as domestic market and taxes, trading restrictions, corresponding adjustments, and national registry issues. The evaluation of opportunity considers each country’s nationally determined contributions (NDCs) under the Paris Agreement, the potential for international finance to support their objectives, and the opportunity to generate positive societal and environmental impacts. The resulting opportunity-to-risk ratio aids developers in assessing trade-offs between potential benefits and risks when exploring new investment territories. Rapid expansion of the voluntary carbon market has prompted governments worldwide to consider regulations, resulting in taxes and export limits in some countries, including Zimbabwe, Kenya, and Zambia. Trove said its indices will adapt as policies evolve, with plans to launch an interactive dashboard enabling clients to customise index weightings to match their risk appetite. 

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