Data-Driven Approaches to Managing Risk in the Voluntary Carbon Market
This report explores reputational, financial, and regulatory risks in the Voluntary Carbon Market and how data-driven tools can help manage them.
Data-Driven Approaches to Managing Risk in the VCM
Our new risk report examines the reputational, financial, and regulatory risks shaping today’s Voluntary Carbon Market (VCM), and how data-driven tools can help manage them. In this report, we explore buyer and investor exposure to low-quality credits, the growing impact of price volatility and reversal risks, and how robust carbon markets data can support transparent and resilient market participation.
Here are some of the key findings from our analysis:
AlliedOffsets’ data reveal a market still heavily concentrated in the lower tiers of quality. Among all active projects in the market today over 10,700 projects have a Normalized Quality Score between 0.1 and 0.3.
Tech and media buyers tend to purchase higher-quality credits, while agriculture, retail, and transportation sectors remain more exposed to reputational risk.
Price volatility, credit reversals, and tightening regulation continue to influence investment confidence and earnings exposure across the market.
How Stakeholders Can Manage Carbon Market Risks Using Data
Buyers
Monitor and select credits based on verified quality metrics (e.g., CCP, CORSIA, compliance standards) to reduce exposure to lower-integrity projects and greenwashing claims.
Use AlliedOffsets’ platform to track project quality, retirement activity, and reputational risk, supporting transparent, data-driven procurement decisions.
Investors
Incorporate historical pricing, volatility, and reversal risk into investment models to understand portfolio exposure.
Use AlliedOffsets’ analytics to identify high-quality and underperforming projects, forecast market trends, and manage portfolio risk to help protect returns.
Consultancies
Advise clients on credit selection, procurement timing, and regulatory exposure using standardized metrics and visualizations.
Leverage AlliedOffsets’ insights to benchmark performance and deliver clear, data-backed recommendations on carbon market risks and opportunities.
Interested in how AlliedOffsets’ data can help you identify, manage, and reduce carbon market risks?
