Validation Body and Verification Body Requirements

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These CAPTURIANT VALIDATION AND VERIFICATION BODIES REQUIREMENTS (the “VVB Requirements”) set out the Capturiant rules and requirements for the Validation Body and the Verification Body (either, a “VVB”) to become a Capturiant-approved or recognized VVB, for the appropriate VVBs to conduct validation of the Projects in accordance with the Capturiant Standard and for the appropriate VVBs to conduct an independent and rigorous Verification of the Environmental and Sustainable Development Benefits reported by Project Developers. Project Developers should also use this the VVB Requirements to help prepare them for the validation and verification process. These VVB Requirements form a part of and are subject to the Capturiant Platform Terms of Service.

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1. Introduction

1.1 Key Objectives to Validation and Verification

Validation and Verification are integral to the Capturiant Program. The key objectives of the VVB Requirements are to:

·   Ensure Projects and Project Developers meet minimum eligibility requirements;

·   Ensure Projects meet the Capturiant Standard (Click here for the Capturiant Program Requirements);

·   Minimize the risk of erroneously crediting or double counting of Environmental and Sustainable Development Benefits, PEACs or EACs;

·   Support the transparency and integrity of the data contained on the Capturiant Website, Capturiant Registry and Capturiant Marketplace;

·   Maintain that verifications are conducted in a consistent and comparable manner across Projects;

·   Establish regular audits of Projects’ is conducted to ensure on-going compliance with the Capturiant Standard;

·   Establish standards for VVBs;

·   Ensure the Verification process is conducted independently and with integrity and without conflicts of interest;

·   Establish standards for documenting Validation and Verification services; and

·   Provide required templates used by VVBs for Validation and Verification services. 

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1.2 Disclaimer

The VVB Requirement content is not intended to constitute legal advice and any VVB who requires legal advice should obtain it themselves. Capturiant reserves the right to amend or depart from any procedure, practice or guideline referred to in the VVB Requirements.

Nothing in this VVB Requirements should be taken as amending or replacing any provision of a Validation Body Agreement.  If there is any inconsistency between the VVB Requirements and a Validation Body Agreement, the latter shall prevail to the extent of the inconsistency.

1.3 Language

The operating language of the Capturiant Program is English. The VVB Requirements document may be translated into other languages to facilitate local use. However, the English versions of the VVB Requirements document and any corresponding ancillary documents, and the interpretation of same, shall take precedence over any other language translations.

1.4 Definitions

Capitalized terms used herein without a definition shall have the meaning given in the Platform Terms of Service. For definitions applicable to the VVB Requirements, please see Schedule 1 attached hereto.

1.5 Capturiant VVB Requirements Templates and Forms

The following forms shall be used by respective VVBs:

   ·   VVB Qualification Form;

   ·   Validation Body Agreement;

   ·   Validation Body Request for Approval;

   ·   Validation Services Agreement;

   ·   Validation Report Template;

   ·   Verification Body Agreement;

   ·   Verification Body Request for Approval;

   ·   Verification Services Agreement;

   ·   Verification Report Template;

   ·   Verification Opinion Template;^[1]

   ·   Verification Statement Template;

2. Overview of the VVB Requirements

2.1 VVB Requirements Scope

The VVB Requirements provides the standard and framework to become a Capturiant approved or recognized VVB, for VVBs to conduct Validation of the Projects in accordance with the Capturiant Standard, for VVBs to conduct an independent and rigorous verification of the Environmental and Sustainable Development Benefits reported by Project Developers and for VVBs to subsequently conduct an independent and rigorous verification of PEACs and EACs. The scope of the Requirements document covers all those services related to the Validation of a Project, the Verification of Environmental and Sustainable Development Benefits and the continued Verification of PEACs and EACs. The scope does not include carbon footprint assessments or carbon neutrality claims.

Although a Validation Body may participate in the Capturiant Program on a voluntary basis, by accepting the Terms of Service, the Validation Body agrees that these VVB Requirements set out the Validation Body’s obligations and agreements for participation. Similarly, although a Verification Body is an independent Person, required to enter into an agreement with the Project Developer to perform Verification of the Environmental and Sustainable Development Benefits generated by or resulting from the Project Developer's Project, such Verification Body must also accept the Terms of Service. By accepting the Terms of Service, the Verification Body agrees that these VVB Requirements set out the Verification Body’s obligations and agreements for participation. 

2.2 VVB Requirements

The rules and requirements for the VVB Requirements are set out in the following sections:

   ·   Core Principles

   ·   Overview of the Validation and Verification Processes

   ·   Required Qualifications of VVBs

   ·   Validation and Verification Services – Expectations and Required Activities

   ·   Documenting and Reporting of Validation and Verification

   ·   General Obligations of VVBs

   ·   Administration and Rights of Capturiant

   ·   VVB Improvements 

2.3 Roles and Responsibilities

     2.3.1 Validation Body A Validation Body has been approved when it is engaged by Capturiant under the VVB Qualifiction Form, Validation Body Agreement, and the Validation Body Request for Approval to Validate whether Projects meet the Capturiant Standard under the Program Requirements. [A Project Developer engages one of the available Validation Bodies with a Validation Services Agreement (or similar document) to provide Validation Services with respect to their Project.]

     2.3.2 Verification Body A Qualified Verification Body has been approved by Capturiant after it has completed the VVB Qualifiction Form, Verification Body Agreement, and the Verification Body Request for Approval to Verify the Environmental and Sustainable Development Benefits of Projects on the Capturiant Platform. Qualified Verification Bodies are required to enter into an agreement with the Project Developer to perform Verification of the Environmental and Sustainable Development Benefits generated by or resulting from the Project Developer's Project. Project Developers are encouraged to use Verification Services Agreement template to engage a Qualified Verification Body. 

     2.3.3 Capturiant The Capturiant Platform is managed by Capturiant, which is an organization formed under the jurisdiction of the Cayman Islands. Capturiant is responsible for managing, overseeing, and operating the Capturiant Platform, including and not limited to the Capturiant Website, the Capturiant Registry, the eVault, and the Marketplace. Capturiant also:

   · Lists eligible Projects on the Capturiant Website;

   · Establishes, maintains, and oversees the Capturiant Program;

   · Enters into the Validation Agreements with Validation Bodies or provides the Verification Services Agreement template for the Project Developer to allow for VVBs for participation in the Capturiant Program; and

   · Mints Assets in accordance with the Capturiant Program and the Tokenization Process for deposit into the eVault, registration on the Capturiant Registry, and trade in the Marketplace.  

3. Core Principles

The VVB Requirements have been established to maintain the minimum criteria for VVBs to participate in the Capturiant Program. 

An essential element of project Validation and Environmental and Sustainable Development Benefit and Asset Verification is to ensure that all VVBs are qualified to conduct the validation and Verification services, and that the Verification Bodies conducting work under the Capturiant Program uphold the basic verification principles laid out in International Organization for Standardization (“ISO”) 14064-3:2006.

Validation Bodies must be approved and engaged by Capturiant under the Validation Body Agreement to Validate Projects under the Program Requirements. A Project Developer must engage one of the available Validation Bodies to provide Validation services with respect to the Project. The list of approved Validation Bodies can be found at the following link.

Verification Bodies must demonstrate independence from the Project Developer and the Project being Verified. Verification Bodies must contract directly with the Project Developer. Verification Bodies must also agree to the Capturiant Terms of Service. In providing Verification services under the Capturiant Program, Verification Bodies must demonstrate ethical conduct and fair presentation of findings, conclusions and reports throughout the Verification process. Finally, Verification Bodies must conduct Verifications with due professional care, demonstrating the skill, diligence and competence necessary to perform the Verification.

4. Overview of Validation and Verification Processes

Capturiant requires validation of all Projects to determine eligibility for the Capturiant Program and compliance with Capturiant Standards. Capturiant requires an independent and rigorous Verification of the Environmental and Sustainable Development Benefits reported by Project Developers and for VVBs to subsequently conduct an independent and rigorous Verification of PEACs and EACs.

4.1 Validation Process Overview

Once a Project is listed on the Capturiant Website as "Submitted", and the Project Developer has selected the Validation Body and submitted the Uniform Project Description, with all required accompanying documentation, to the Validation Body for validation services, the Validation Body may start to perform validation services. The Validation Body will assess whether the Project is being developed and/or operated in accordance with the Capturiant Program. After review, the Validation Body will submit its Validation Report to Capturiant and to the Project Developer. Capturiant may request more information from the Validation Body or Project Developer.

Upon Capturiant's acceptance of the Validation of the Project, the Project will be listed on the Capturiant Website as "Validated." Once a Project is Validated, the Project Developer may request minting of PEACs.

4.2 Verification Process Overview

Once a Project is listed on the Capturiant Website as “Validated”, and the Project Developer has engaged with a Verification Body (using the Verification Services Agreement template or a substantially similar agreement), and the Project Developer has submitted the Uniform Project Description, the Validation Report, with all required accompanying documentation to the Verification Body for Verification, the Verification Body may start to perform Verification services.

For Projects in “Validated” status that have not yet produced Verified Assets, the Qualified Verification Body will Verify the generation of the Environmental and Sustainable Development Benefits associated with the Project and provide a Verification Report to Capturiant and the Project Developer. Capturiant may request additional information from the Verification Body and Project Developer.

Upon Capturiant’s acceptance of the Verification Report of the Environmental and Sustainable Development Benefits associated with the Project, the Project will be identified on the Capturiant Website as "Assets Verified."

Once the Environmental and Sustainable Development Benefits associated with a Project are designated as “Assets Verified”, the Project Developer may request issuance of EACs.

For Projects identified as “Assets Verified” the Qualified Verification Body shall conduct periodic Verification in accordance with the timetable set forth in the applicable methodology for the ongoing monitoring of the generation of Environmental and Sustainable Development Benefits and submit a subsequent and additional Verification Report to Capturiant and the Project Developer. Capturiant may request additional information from the Qualified Verification Body or Project Developer.

Upon Capturiant’s acceptance of the subsequent Verification of the Project, the Project listing on the Capturiant Website will be updated to include the new Verification date.

Once the Environmental and Sustainable Development Benefits of a Project are again Verified, the Project Developer may request Minting of additional EACs.

5. Required Qualifications of VVBs

VVBs must be qualified to conduct validation services and Verification services in accordance with these VVB Requirements.

5.1 Required Qualifications for Validation Bodies

A Validation Body must show that based on the totality of the circumstances that such Validation Body is qualified to perform Validation services in accordance with the Capturiant Standard. As a starting point, the Validation Body should provide the documents described in, and evidence of compliance with, the requirements listed below:

   · A signed Validation Body Agreement;^[2]

   · Completed Validation Body Request for Approval

   · Has implemented risk management policies and procedures (“Risk Management”);

   · Has implemented the necessary regulatory compliance policies and procedures (“Regulatory Compliance"), if applicable;

   · Holds at least one (1) regulatory license and/or registration with any commodities, securities, or environmental regulator (“Licensed”), if applicable;

   · Has an entity structure that is integrated with a regulated finance, banking or securities regulated entity (“Financial Regulator Integration”), if applicable;

   · Has the necessary insurance to cover fraud and/or errors in the Validation services (“Insurance”), if applicable; and

   ·  Any additional enumerated qualifications (“Additional Qualifications”). 

The Validation Body must submit a complete and accurate VVB Qualification Form and accompanying documentation to Capturiant. By submitting the VVB Qualification Form for listing on the Capturiant Website, the Validation Body makes the representations and warranties set forth in the Capturiant Platform Terms of Service.

Capturiant will review the VVB Qualification Form and accompanying documentation for completeness and compatibility with these VVB Requirements. If the Validation Body has submitted the required information and the Validation Body appears, based on that information, to meet the qualification requirements of a Validation Body, then Capturiant will “approve” the Validation Body. Approved Validation Bodies are listed on the Capturiant Website in the Capturiant Approved Validation Bodies document, marking with an “x” the specific requirements from the above list that are satisfied by the Validation Body and not marking with an “x” the specific requirements that the Validation Body does not satisfy. Capturiant may request more information and/or documentation from the Validation Body.

Even though a Validation Body may not have an “x” demarcating that it has satisfied every one of the above requirements for qualification, Capturiant, using a totality of the situation approach, may still approve such Validation Body to perform validation services in accordance with the Capturiant Standard. Capturiant may refuse to approve any Validation Body, in its sole discretion.

The list of Validation Bodies that Capturiant has approved will be posted on the Capturiant Website for public display and will be available for viewing by all Account Holders and all users of the Capturiant Website.

Follow this link for a list of the Capturiant Approved Validation Bodies. Links to the approved Validation Bodies’ Validation Body Agreements are included in the list of Capturiant-approved Validation Bodies.

5.2  Required Qualifications for Verification Bodies and Lead Verifiers

The ISO is a recognized institution that developed GHG standards as various schemes emerging in international, national and voluntary sectors began using different sets of guidance or rules for GHG accounting. ISO created a series of standards intended to incorporate best practices and provide consistency and confidence in GHG assertions or claims. ISO 14065 is the international standard that specifies processes and requirements for accrediting verification bodies to perform GHG validation and verification services. The accreditation process provides criteria for assessing and recognizing the competence of verification bodies, thereby allowing for a consistent and comparable scheme across GHG programs.

A Verification Body must demonstrate to Capturiant that such Verification Body is qualified to perform Verification services in accordance with the Capturiant Standard. A Verification Body that meets the following Verification Body Requirements and Lead Verifier Requirements (collectively referred to herein, as “Comprehensive Verification Body Requirements”) is a “Qualified Verification Body”: 

     5.2.1 Verification Body Requirements

The Verification Body must provide all of the required information and/or documentation below to be considered a Qualified Verification Body:

   · Executed a Verification Services Agreement with the relevant Project Developer, if applicable;

   · Provide a certificate of a Senior Officer (e.g., president, CEO, CFO) certifying that the Verification Body is an independent third-party entity with no formal corporate or informal relationship to Capturiant and there are no Conflicts of Interest (as defined below) (the “First Senior Officers Certificate”);

   · Provide a certificate of a Senior Officer^[3] certifying understanding and competency with the Capturiant Standard and other Capturiant Program requirements and protocols (the “Second Senior Officers Certificate”, together with the First Senior Officers Certificate, the “Senior Officers Certificates”; and  

  ·  Accreditation under International Organization for Standardization (ISO) 14065:2013 or ISO 14065:2020 with conformance to all accreditation requirements under ISO 14065, ISO 14064-3:2006, ISO 14064-3:2019, ISO 14065: 2020 and all other accreditation requirements; or  

  ·  Accreditation under a Capturiant Approved Accreditation Body (see the list of Capturiant Approved Accreditation Bodies); and   

  ·  Employ at least one staff member (or contracted personnel) designated as Lead Verifier who qualifies according to the requirements below.

5.2.2 Lead Verifier Requirement

The Lead Verifier must satisfy all of the following requirements: 

   · Have an executed employment agreement or contract for services with a Qualified Verification Body;

   · Have successfully completed any training(s) Capturiant may require pertaining to the methodology applicable to the Project for which the Verification Body wishes to perform the Verification;

   · Have successfully completed the Verification Body’s required internal training requirements, following proper processes and procedures under the ISO 14065:2013 or ISO 14065:2020, ISO 14064-3:2006 or ISO 14064-3:2019; and

   · Have been identified as the Lead Verifier in the VVB Qualification Form submitted by the Verification Body to Capturiant. 

The Project Developer and the Qualified Verification Body must execute a Verification Services Agreement in a form substantially similar to the Verification Services Agreement linked here in section 1.5. 

The Verification Body must submit a complete and accurate VVB Qualification Form and accompanying documentation to Capturiant.

By submitting the VVB Qualification Form for listing on the Capturiant Website, the Verification Body makes the representations and warranties set forth in the Capturiant Platform Terms of Service.

Capturiant will review the VVB Qualification Form and accompanying documentation for completeness and compatibility with these VVB Requirements. If the Verification Body has satisfied the Comprehensive Verification Body Requirements, Capturiant will designate the Verification Body as a Qualified Verification Body for the applicable Project. Capturiant may request more information and/or documentation from the Verification Body.

Capturiant will notify the Project Developer and the Verification Body of Qualified Verification Body status and/or the rejection of the Verification Body as qualified. Capturiant may refuse to qualify any Verification Body, in its sole discretion.

The information for the Project listed on the Capturiant Website will include the name of the Qualified Verification Body and the date such Verification Body was deemed as such. 

     5.2.3 Verification Body Conflicts of Interest

It is crucial that a Verification Body conduct Verification services with independence and without actual or potential interests in the Project or the Project Developer (“Conflicts of Interest”).  Examples of possible conflicts of interest include:  

·     any member of the Verification Body team is engaged in providing other fee-paying services to the applicable Project Developer or Project during the term of the Verification Services Agreement; and/or 

·     a material proportion of the Verification Body’s total annual revenue is derived from fee-paying services provided to the selected Project, or the selected Project is a major client of the Verifying Body in terms of annual revenue;

A Verification Body must notify Capturiant of any potential or actual Conflicts of Interest immediately upon knowledge, or when a reasonable Verification Body would have knowledge, of such Conflict of Interest. A Verification Body may not enter into any agreement with Capturiant or a Project Developer to perform Verification services for a Project with respect to which it actually has, knows, or reasonably should know it, has a Conflict of Interest.

6. Validation and Verification Services – Expectations and Required Activities

6.1 Validation Services

The selected approved Validation Body will assess whether the Project is being developed and/or operated in accordance with the Capturiant Program. After such assessment, such Validation Body will submit its Validation Report in the form linked in section 1.5 to Capturiant and to the Project Developer. Capturiant may request more information from the Validation Body or Project Developer.

Upon Capturiant's acceptance of the Validation of the Project, the Project will be listed on the Capturiant Website as "Validated" providing a link to the Validation Report.

Once a Project is Validated, the Project Developer may request minting of PEACs.

6.2 Verification Services

     6.2.1 Risk-Based Verification

The engaged Qualified Verification Body is to develop a risk-based Verification plan for the Project and conduct such Verification of the Project following the Verification Body’s internal policies and procedures. A confidential list of material and immaterial findings is sent to the Project Developer, so the Project Developer the opportunity to correct any errors found.

After one turn of the confidential list of findings back from the Project Developer with corrections, the Qualified Verification Body is to prepare a Verification Report, which lists its final findings and Verification Opinion (in the form linked in section 1.5), and a Verification Statement (in the form linked in section 1.5).  The Qualified Verification Body will submit the final Verification Report and the Verification Statement, coupled with any underlying or supporting documents, to Capturiant and the Project Developer.

    6.2.2 Verification Standards

A Qualified Verification Body must Verify that each Environmental and Sustainable Development Benefits meet and comply the following:

·   The Capturiant Standard or Applicable Standard, including the applicable methodology;

·   Any other Capturiant Program Requirements;

·   These VVB Requirements; and

·   ISO 14064-3:2006, ISO 14064-3:2006. ISO 14064-1:2006 or ISO 14064-2:2006 (as applicable). 

The applicable verification standards must be stated in each Verification Report.

    6.2.3 Required Components of the Verification

Using a risk-based approach to scale the Verification accordingly, a Qualified Verification Body must ensure that the calculations of Environmental and Sustainable Development Benefits are accurate within the appropriate quantitative materiality threshold. This is achieved by re-calculating all Environmental and Sustainable Development Benefits estimates based on the Project activity data. All factors used in the applicable methodology equations must also be checked. The Qualified Verification Body must cross check the calculated Environmental and Sustainable Development Benefits and Project performing data in line with the applicable methodology to ensure quantitative material misstatements are identified and resolved. The Qualified Verification Body shall also trace activity and/or monitoring data compiled by the Project Developer back to the original source and perform re-calculations in accordance with a sampling plan that focuses on high-risk data. The Qualified Verification Body shall review all relevant physical and documentary evidence.

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Recalculation Using Sample Data

In order for a Qualified Verification Body to verify the Environmental and Sustainable Development Benefits estimated in the Uniform Project Developer form, the Qualified Verification Body must recalculate projected Environmental and Sustainable Development Benefits data using a sample of the Project data.  The recalculation must result in a quantification of the Environmental and Sustainable Development Benefits that is free of material misstatement. It is possible that the overall Environmental and Sustainable Development Benefits calculated by the Project Developer will differ from those estimated by the Qualified Verification Body. A discrepancy is considered material if the difference between the Environmental and Sustainable Development Benefits reported on the Uniform Project Developer form and the Verifier’s estimate surpasses the materiality threshold of two percent (2%). Immaterial discrepancies are those that fall within the materiality threshold and are not required to be corrected on the Uniform Project Developer form.

If the reported Environmental and Sustainable Development Benefits in the Uniform Project Developer form contains material misstatement, the Qualified Verification Body shall include this information in the list of findings. Once the Qualified Verification Body has confirmed that the data sample is free of material misstatements, it is ready to complete the Verification services. Examples of directly monitored and measured data or supporting evidence that should be reviewed during a Verification include, but are not limited to:

·   Flow meter, electricity meter, and continuous emissions monitoring system (“CEMS”) data;

·   Outputs from gas collection, destruction, or abatement systems;

·   Electricity use or fossil fuel combustion records, invoices, purchases, and sales orders;

·   Onsite fuel stocks;

·   Data recording devices and portable monitoring equipment;

·   Maintenance and calibration records, log-books, and system operations manuals;

·   Laboratory test results or third-party reports;

·   Manufacturer specifications and reports;

·   Raw material inputs, production output, and hours of operation;

·   Field check reports, sampling exercises, and analysis reports; 

·   Emission factors (if not default), combustion efficiency, and oxidation factors;

·   Certificates of destruction, weight tickets, and customs documents; and

·   Calculation spreadsheets and electronic files.

It is a Qualified Verification Body’s duty to identify errors during Verification. Common errors include, but are not limited to:

·   Calculation errors: equations used by project developer do not match those specified by the applicable methodology;

·   Incompleteness: incorrect inclusion or exclusion of Environmental and Sustainable Development Benefits within the Project boundary, exclusion of significant sources and/or leakage effects

·   Inaccuracy: manual data transfer and transcription errors, double counting, and use of incorrect emission or destruction efficiency factors

·   Any of the above errors could result in the project developer materially over-estimating the Environmental and Sustainable Development Benefits.

Review of Project Boundary, Reporting/Monitoring Methods, and Calculation Methods

A Qualified Verification Body shall review a Project’s Uniform Project Description form and the accompanying documentation to ensure that the Environmental and Sustainable Development Benefits reported are within the Project boundary, as defined within the applicable methodology.  The review must also include the reporting and monitoring parameters for the Project. A site visit shall be used to confirm the Project boundary, examine Project equipment, identify any associated Environmental and Sustainable Development Benefits resulting from the Project, and assess the operation of the Project activity. As part of this process, a Qualified Verification Body shall review the Project’s Monitoring Plan to Verify that all reported Environmental and Sustainable Development Benefits and Project activities are measured, modeled or calculated appropriately and with the correct frequency. A Qualified Verification Body must also review the Project Developer’s future assertions regarding Environmental and Sustainable Development Assets, and data collection and storage methods. Once all reporting parameters and Environmental and Sustainable Development Benefits have been identified and any issues addressed, the Qualified Verification Body may proceed to review the Project’s Environmental and Sustainable Development calculations and management systems.

Review of Methodologies and Management Systems

After the Project’s boundary, reporting/monitoring and calculation methods have been confirmed, a Qualified Verification Body shall review the methodologies and management systems used to generate, compile, transcribe, and store the Environmental and Sustainable Development Benefits data. This is principally a risk assessment exercise in which the Qualified Verification Body must weigh the relative complexity of the scope of the Project’s Environmental and Sustainable Development Benefit generation operations and activities, the Project Developer’s methodologies and management systems used to report such Environmental and Sustainable Development Benefits, and the likelihood of calculation error as a result of reporting uncertainty or misstatement. The Qualified Verification Body must determine the presence and level of inherent and management type risks and focus its Verification effort on the highest risk areas. This is an area which requires professional judgment, and it is likely that qualitative material non-conformances with the applicable methodology could be identified. Through this review, the Verification Body shall determine the appropriateness of the management systems, IT systems, staff competency, internal audits, record keeping arrangements, and documentation processes to understand the risk of systemic errors as a result of reporting uncertainty or misstatement. A review of records and management systems onsite helps to ascertain the adequacy of the management system relative to the applicable methodology requirements. A Qualified Verification Body’s general review of a Project’s Environmental and Sustainable Development Benefits management systems should document whether methodologies/procedures are appropriate given the inherent uncertainty/risk; the likelihood that the Environmental and Sustainable Development Benefits data is correctly aggregated, monitored, and measured; and whether a qualified individual is responsible for managing and reporting the Environmental and Sustainable Development Benefits. The Qualified Verification Body shall also check that the correct metering equipment is used, inspected, cleaned and calibrated in accordance with the applicable methodology. The Qualified Verification Body is responsible for ensuring that all metered and modeled (if applicable) data are accurate.

Inspections and Gathering Evidence for Verification

A Qualified Verification Body should obtain appropriate audit evidence to be able to draw reasonable conclusions on which draft the Verification Report and draw the conclusion in the Verification Opinion. Audit evidence is obtained during all phases of the Verification and should include an appropriate mix of Verification procedures outlined in Table 1.

The Qualified Verification Body must use their professional judgement to determine the specific mix of Verification Body procedures to provide sufficient and appropriate evidence to support a Verification Opinion on each item within the scope. Supporting documentation should always be clear, traceable, and directly correspond to the reported timeline.

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Table 1:  Procedures from obtaining Verification evidence‍

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A variety of factors will affect the reliability of Verification evidence.  These include:

·   Its independence. Evidence generated outside the organization is generally considered to be more reliable than evidence generated internally;

·   The knowledge and lack of bias of the person providing the evidence to the Verification Body, and the attention paid to the Verification Body request for evidence;

·   The directness in which it is obtained. Evidence received directly by the Verification Body is generally considered, all other things being equal, to be more reliable than evidence received indirectly, and

·   Control systems. Internal client-generated evidence prepared under systems of strong internal control is considered more reliable than client-generated evidence under systems of weak internal controls.

The Qualified Verification Body should adopt an attitude of professional skepticism throughout the audit and obtain the level of audit evidence necessary to enable them to identify areas likely to cause material misstatement.

7. Documenting and Reporting Verification Activities

7.1 Required Documentation and Actions

After a Qualified Verification Body has completed its review of a Project Developer’s estimated Environmental and Sustainable Development Benefits, it must take the following steps to document the Verification process:

·   Complete a detailed list of findings containing both immaterial and material findings (if any) and deliver it to the Project Developer, allowing the opportunity for corrective actions (private document);

·   Complete a detailed Verification Report and deliver it to Capturiant and the Project Developer (public document);

·   Complete a Verification Statement detailing the quantity of the Environmental and Sustainable Development Benefits and deliver it to Capturiant and the Project Developer (public document);

·   Conduct an exit meeting with Capturiant and the Project Developer to discuss the Verification Report, including the list of findings and corrections, and Verification Statement and determine if material misstatements (if any) can be corrected. If so, the Verification Body must continue the Verification after the Project Developer has made the necessary revisions; and

·   If a reasonable level of assurance is successfully obtained, upload the Verification Report, list of findings, Verification Opinion, and Verification Statement on the Capturiant Website.

·   Return important records and documents to the project developer for retention.

7.2 Lead Verifier Responsibilities

Lead Verifiers are responsible for the technical quality of the Verification and for supervising the work of the Verification team. The Lead Verifier is responsible for ensuring that analysis conducted and documentation prepared by the Verification team are conducted, and prepared, in a manner that supports the conclusion as reported in the Verification Report. In addition, if the Qualified Verification Body engages subcontractors or experts to assist with a Verification, the Lead Verifier is responsible for ensuring the quality and integrity of the work conducted by such subcontractors and experts to provide Capturiant a reasonable assurance for the basis their conclusions. It is recommended that Lead Verifier sign off the Verification documents and maintain such documents as evidence that they have been reviewed by the Lead Verifier. The Lead Verifier should be present at the final issues meetings for Verifications of Capturiant Projects.

7.3 Requirements for Validation and Verification Reports

     7.3.1 Guiding Principles for Validation & Verification Reports

Validation Reports and Verification Reports must satisfy the principles outlined in Table 2 below:

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Table 2:  Principles for Validation Report and Verification Reports

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7.4 Components of a Verification Report

The Verification Report must contain a detailed summary and scope of Verification activities undertaken. As such, the Verification Report must provide positive assertion that the Project met all eligibility requirements, followed all monitoring requirements, applied the appropriate calculation methodologies, and is free of material errors for the reporting period in question. In addition, the Verification Report must include a discussion of how the perceived areas of risk were incorporated into verification activities and project data review.

Verification Reports must include the following:

·   Project Location: 

Each methodology limits Project activities to an explicitly defined geographic boundary. Verification of project location shall be conducted through site visits, corroboration and review of appropriate documentation, and/or geographic searches confirming location and the Project area.

·   Project Start Date

Each project must have a Project State Date, or the date that starts the Project’s crediting period. Verification Bodies must verify that the Project Start Date listed on the Uniform Project Developer form is correct and explicitly stated in every Verification Report for the Project.

·   Crediting Period

A Verification Body shall Verify that the reporting period falls within the Project’s crediting period as defined in the applicable methodology. A Verification Body shall also confirm that the crediting period and the reporting period that is provided on the Uniform Project Developer form is accurate and the underlying activity or source data supplied by the Project Developer directly corresponds to these dates.

·   Additionality

Tests for Additionality shall be set forth in the applicable methodology. Verification requires: (a) a determination that the Project was implemented, established, operated, and conducted voluntarily and for the Environmental and Sustainable Development Benefits and (b) a review of applicable local, state or federal regulations in order to reach reasonable assurance that there are no specific mandates for the Project’s implementation.

·   Performance Standard

A Verification Body must Verify that the Project meets or exceeds the applicable methodology-specific performance standard. The applicable performance standard is applied by the Project Developer at the Project Start Date.

·   Regulatory Compliance

The Verification Body shall confirm that the Project being Verified was in material compliance with Applicable Law, including environmental regulations, during the crediting period; no PEACs or EACs may be minted for periods when a Project was not in material compliance with Applicable Laws. Any violation that is found by the Verifier to be caused by the Project shall be reported, in writing, to Capturiant as soon as possible for assessment on a case-by-case basis. A Verification Body should provide relevant details on the violation, including copies of the notice of violation, communication between the regulator and the Project Developer or Verification Body, and any other relevant documents when the verification report and statement are submitted, if not before.

·   Ownership

One of the fundamental principles of the Capturiant Program is the unambiguous ownership of Assets. The Project Developer must agree that ownership of the Assets will not be sold or transferred except through the transfer in accordance with the Capturiant Registry Rules. It is essential that the Verification Body determines the appropriate individual or entity is the proper owner of a Project’s potential Assets early in the Verification process. The owner of the Assets must be the Account Holder. In addition, the Verification Body should review relevant contracts, agreements, and/or supporting documentation between Project Developers, facility owners, utilities, and other parties that may have a claim to the Assets generated by the Project.

·   The List of Findings

The initial list of findings is a private document that details all material and immaterial findings identified by the Verification team throughout the Verification. These findings shall be distinguished by materiality and whether they were qualitative non-conformances or quantitative misstatements. The list of findings shall be delivered first to the Project Developer in order to provide an opportunity to correct the issues that might impact PEAC or EAC minting. The list of findings shall accompany the Verification Report submitted to Capturiant and must include a record of all corrections or corrective actions made by the Project Developer to address the identified issues. A correction made by the Project Developer resolves an error and fixes the identified problem, while a corrective action fixes the cause of the problem in order to prevent its reoccurrence in future verifications. Each finding shall detail and list the identified issue and refer to the relevant section of the methodology but shall not provide any solutions or potential remedies for resolution. Resolutions constitute consulting advice and thus create a Conflict of Interest. The list of findings should also include opportunities for improvement (“OFIs”) to help the Project Developer streamline future Verifications. OFIs can consist of recommend improvements that cite sections of the methodology, but they may not provide advice on how to resolve the issues noted. A Verification Body may enumerate any shortcomings in Project Developer’s Environmental and Sustainable Development tracking and management systems as related to the specific applicable methodology requirements.

·   Inherent Limitations

The Verification Report should include, where appropriate, a description of any significant, inherent limitations associated with the Verification scope.

·   Recommendations for Improvement or Conditions to Verification

If relevant, Capturiant requires the Verification Body to recommend to it any conditions of Verification to which, in the Verification Body’s opinion, the Project Developer should be subject.

·   General Considerations

The Verification Report is a transparent, overarching document that is produced by the Qualified Verification Body for the Project Developer and is also made available to general public. Qualified Verification Bodies have the ability to construct the Verification Report in a manner that they feel best communicates the activities undertaken and the results of the Verification. Verification Reports are public documents and should be treated as such. Capturiant expects all Verification Reports to make explicit, positive assertions of the conclusions drawn. For example, it is insufficient for a Verification Report to simply indicate that no regulatory non-compliances were identified. The report must explicitly provide a conclusion, to a reasonable level of assurance, that the Project met Regulatory Compliance requirements, is consistent with the Capturiant Standard and meets all applicable methodology requirements.

The Verification Report must contain a general description of Verification approach, the finalization date, signature of the Lead Verifier, and a written statement that the Verification was performed in accordance with these VVB Requirements. 

7.5 Verification Opinion

The submission of the Verification Report should also include a Verification Opinion. The Verification Opinion should clearly express the Qualified Verification Body’s opinion as to whether the Project Developer has met the requirements of the Capturiant Standard, including the applicable methodology. The types of Verification Opinions acceptable to Capturiant include, but are not limited to: 

·   Unqualified opinion: expressed when there are no material departures from the requirements specified in the Capturiant Standard, including the applicable methodology.

·   Qualified opinion: expressed when there is a material departure from the requirements specified in the Capturiant Standard, including the applicable methodology or a significant scope limitation.

·   Inability to form an opinion: issued when a significant scope limitation has been imposed on the Verification Body or in circumstances that prohibit the Verification Body from forming an opinion.

7.6 Verification Statement

The Verification Statement presents the official results of the Verification. It details the amount of Environmental and Sustainable Development Benefits associated with the Project for a certain crediting period. The Verification Statement confirms the Verification activities and outcomes for all stakeholders: Capturiant, Project Developers, Account Holders, Verification Bodies, and the public. Capturiant relies on the Verification Statement provided by the Verification Body as the basis for issuing PEACs and EACs. A positive Verification Statement indicates that the Project and its reported Environmental and Sustainable Development Benefits meet the Capturiant Standard and these VVB Requirements.  The Verification Statement is a is available on the Capturiant Website.

8. General Obligations of VVBs

VVBs must follow all applicable Capturiant Program rules and adhere to the guidance provided in Capturiant Standard when performing Validation services and/or Verification services. In addition, an approved Validator, a Qualified Verification Body and its personnel must always demonstrate ethical conduct and competence, exercise due professional care. 

Additionally, Verification Bodies owe certain duties to Capturiant and must adhere to the following Verification principles throughout the Verification, including but not limited to:  

• Compliance with any guidelines or policies notified to them by Capturiant in writing;
• A minimum of one (1) Lead Verifier on the Verification team, subject to an executed employment agreement with the Verification Body;
• Ensure that all Lead Verifiers are competent and have successfully completed internal, general and group or protocol-specific training required by its internal policies and Capturiant;
• Ensure that a Lead Verifier directs, supervises and leads the undertaking of the Verification services, including signing all written reports and statements;
• Ensure that all personnel working on the Project verification have agreed to be bound by confidentiality obligations and understand that the Verification Body accepts liability for any breach of confidentiality by its employees, agents or contracted personnel;
• Submit an updated a signed and duly executed Senior Officers Certificate to Capturiant on an annual basis;
• Provide timely updated information on changes to the Verification team staff and certain personnel roles, as they may change and/or fluctuate through the Verification;
• Not enter into any agreement or participate in any activity that could create a Conflict of Interest;
• Retain Verification records for at least seven (7) years from the date the Verification Report, Verification Option and Verification Statement, and any underlying supporting documentation, or following the end of the Verification period, whichever is longer; and
• Provide full and free access to Capturiant to obtain all records, documents, accounting and other information maintained by the Verification Body that relate to the Projects.

9. Rights of Capturiant with Regards to VVBs

Capturiant has certain rights and powers that at any time and at its sole discretion employ, including, but not limited to:

• Direct the Verification Body to refrain from entering into any agreement that may give rise to a Conflict of Interest and the Verification Body must comply with any such direction;
• Determine that a Verification of a Project should not proceed or that a person involved in the Verification should be removed and/or suspended as a Lead Verifier;
• Conduct an audit or oversight of Verification services and sending its staff, partners or consultants to attend and oversee Verification services;
• Determine that a Verification Body’s qualification as a Qualified Verification Body should be suspended;
• Compel the Verification Body to submit the necessary to comply with these VVB Requirements; and 
• Amend these VVB Requirements as necessary.

10.  VVB Improvements

Over time, VVB’s are likely to identify opportunities for improving these VVB Requirements, or other aspects of the Capturiant Program. Capturiant will work with VVB’s to review and continuously improves processes through feedback and industry information gathered.

VVB have an important function to perform in contributing to the ongoing success and integrity of Capturiant. VVB’s are encouraged to provide feedback on any issues or recommendations to make these VVB Requirements more efficient and effective.

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Schedule 1: Additional Definitions

“Additionality” shall have the meaning given to it in the applicable Methodology of the Project as modified or supplemented by the terms of the Capturiant Standard.

“Approved Accreditation Body” means an internationally recognized, non-profit entity that certifies entities and individuals as competent to conduct Verification and Validation activities.

“Capturiant-approved Validation Bodies” are Validation Bodies approved to conduct Validation of Projects under the Capturiant Program.

“CEMS” means continuous emissions monitoring system the total equipment necessary for the determination of a gas or particulate matter concentration or emission rate using pollutant analyzer measurements and a conversion equation, graph, or computer program to produce results in units of the applicable emission limitation or standard as defined in EMC: Continuous Emission Monitoring Systems | US EPA.

“Comprehensive Verification Body Requirements” means the Verification Body Requirements and Lead Verifier Requirements set forth in Section 5.2.

“Conflicts of Interest” has the definition given to it in Section 5.2.

“First Senior Officer’s Certificate” has the meaning given to it in Section 5.2.

“Lead Verifier” means the professional competent to perform the responsibilities described in Section 7.2, as determined by Capturiant.

“Lead Verifier Requirements” are the requirements set forth in Section 5.2.

“List of Findings” means the findings of the Qualified Verification Body as described in Section 7.4.

“Monitoring Plan” means The policies and procedures in place to ensure ongoing observation, measurement, sampling, and/or other collection of data on a scheduled or event basis to provide indications of the extent to which project outcomes are being achieved.

“OFI” or “Opportunities for Improvement” are recommendations from the Qualified Verification Body to the Project Developer set forth in the Verification Report intended to help streamline future Verifications, as described in Section 7.4.

“Project Start Date” means the start date of the project as specified in the applicable Methodology for the Project.

“Qualified Verification Body” means a Verification Body who satisfies the Comprehensive Verification Body Requirements.

“Validation Body Agreement” means the agreement entered into between the Validation Body and [Capturiant] in substantially the form linked to this VVB Requirements doc in section 1.5.

“Validation Report” means the report that documents the Validation conducted by the Validation Body selected for a particular Submitted Project.

“Verification Body Requirements” are the requirements of a Verification Body set forth in Section 5.2.

“Verification Opinion” means the final written judgment of the Qualified Verification Body set forth at the end of the Verification Report as provided in Section 7.5.

“Verification Opinion Template” means the template linked to this VVB Requirements doc in section 1.5 with that name.

“Verification Report” means the report delivered by the Qualified Verification Body.

“Verification Services Agreement” means the agreement between a Qualified Verification Body and the Project Developer substantially in the formed linked to this VVB Requirements doc in section 1.5.

“Verification Statement” means the summary conclusions of the Verification Report and a list of the Environmental and Sustainable Development Benefits as described in Section 7.6.

“Verification Statement Template” means the template linked to this VVB Requirements doc in section 1.5 with that name.

“VVB Qualification Form” means the form linked to this VVB Requirements doc in section 1.5 with that name.

“Second Senior Officer’s Certificate” has the meaning given to it in Section 5.2.

“Senior Officer” means a member of the senior staff of an entity, designated either by the governing board or chief executive officer of the company with oversight responsibility for the Verification Body and its work (or potential work) in connection with a Project.

“Senior Officer’s Certificate” has the meaning given to it in Section 5.2.

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[Last updated on 08.01.2023]

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