The LEAF Coalition includes four transaction pathways: There is one pathway for Sovereign contributors to engage in transactions (#1), and three pathways for private sector buyers to do so (#2-4). In #1, Sovereign contributors will not use Emissions Reductions toward their NDCs. Payments support mitigation efforts in the supplier jurisdiction.. The underlying mitigation may be counted once: towards the Supplier Country’s NDC.
Private Sector buyers have three pathways:
2. Private sector buyers provide results-based payments without taking title to ERs.
3. Private sector buyers take title to ERs. Under this option the Supplier will transfer the ERs to the buyer on the ART registry. The supplier country may include the underlying mitigation in accounting for its NDC. The private sector buyer must transparently communicate that the underlying mitigation contributes to the Supplier country’s NDC implementation and achievement.
4. Private sector buyers take title to ERs for which the Supplier Country is willing to make a corresponding adjustment. Under this option the Supplier will transfer the ERs to the buyer on the ART registry, and the supplier country will apply corresponding adjustments for the underlying mitigation in accounting for its NDC.
For all pathways, the ART registry will clearly identify each issued ER for which the Supplier Country intends to or did carry out a corresponding adjustment for the underlying ERs in accounting for its NDC. In pathway 4, the application of a corresponding adjustment ensures the underlying mitigation is not double-counted.
Coalition participants transacting under pathway 3 should transparently communicate in public disclosures (e.g. corporate websites, annual sustainability reports) that the mitigation underlying units purchased through LEAF counts toward the Supplier Country’s NDC implementation and achievement.
These requirements – along with the buyer criteria detailed in the Call for Proposals document – will be ensured by the administrative coordinator through periodic checks. Should a corporate participant not make appropriate disclosures, the administrative coordinator will attempt to clarify the requirements with the participant. Following a notice period and a decision by LEAF Coalition participants, companies which continue to fail to disclose will not be able to continue to participate in the Coalition.
Standards and guidance bodies and the broader media and NGO community have a vital role to play in ensuring companies maintain their commitments. Beyond internal mechanisms, LEAF Coalition participants will look to broader civil society actors to further support accountability, and to bring any issues to the attention of the Coalition to support the process above.