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Investment Committee Decision Memo
Emissions Avoidance Project
Prepared for: Investment Committee
Purpose: Decision support regarding engagement with / allocation to the emissions avoidance project
Project Sponsor: Jedon Kotler
1. Executive Recommendation
Recommendation:
Proceed with the emissions avoidance project as a low–greenwashing-risk, high-defensibility climate integrity instrument, subject to standard legal and transaction-specific review.
The project is not a traditional voluntary carbon offset. It is an ownership-based emissions avoidance structure designed to withstand regulatory, audit, and litigation scrutiny under converging voluntary and compliance standards.
2. Project Summary (Decision-Relevant)
- The project is located in Los Angeles County, California, USA (onshore) a historically productive and economically viable oil field.
- Emissions are avoided through permanent non-extraction of hydrocarbons.
- Climate benefit arises because production could occur under standard economic assumptions but is intentionally and legally prohibited.
- Avoided emissions span Scope 1, 2, and 3 lifecycle impacts.
Key distinction: emissions are prevented at the source, not offset after release.
3. Strategic Rationale
Carbon markets are converging toward:
- Financial disclosure standards
- Anti-greenwashing enforcement
- Litigation and retrospective scrutiny
- Audit-grade documentation expectations
Many voluntary credits face rising reputational and regulatory risk due to modeled permanence, registry dependence, and reversal exposure.
The project was structured from inception to align with this convergence.
4. Risk Assessment (High Level)
A. Permanence & Reversal Risk
- Permanence is enforced through ownership and legal restraint.
- No extraction = no emissions pathway.
- No buffers, insurance pools, or future performance dependencies.
Assessment: Reversal risk is structurally eliminated.
B. Greenwashing / Misrepresentation Risk
- Claims are limited strictly to what is documented and validated.
- No qualitative or comparative superiority claims.
- Disclosure is documentation-first, not marketing-driven.
Assessment: Material greenwashing risk is low.
C. Double Counting & Ownership Risk
- Singular ownership and control of the underlying asset.
- Singular authority over emissions avoidance claims.
- No reliance on registry abstraction for claim legitimacy.
Assessment: Double counting risk is structurally mitigated.
D. Regulatory & Litigation Risk
- Conservative quantification methodology.
- Independent third-party validation under ISO 14064-3.
- Documentation retained for retrospective review.
Assessment: Project is defensible under evolving regulatory and legal standards.
5. Methodology & Assurance
- Emissions avoidance quantified using a conservative, lifecycle-based methodology aligned with ISO 14064-2.
- Baseline grounded in historical production data and economic viability, not speculative scenarios.
- Methodology and application independently validated under ISO 14064-3 by an accredited third party.
Implication: Claims are auditable, reproducible, and externally reviewed.
6. Governance & Disclosure Posture
- Claims constrained by evidence, not market convention.
- Explicit acknowledgment of assumptions and limitations.
- Alignment between ESG-related statements and fiduciary disclosure expectations.
Implication: Reduced risk of inconsistency between climate claims and financial or risk disclosures.
7. Key Limitations (Explicit)
- Asset-specific (not broadly scalable across unrelated sites).
- Applicable to avoidance, not removal.
- Value proposition is defensive credibility, not yield maximization.
These limitations are disclosed and understood as part of the risk posture.
8. Committee Decision Framing
This project should be evaluated as:
- Climate integrity infrastructure
- A defensible avoidance-based claim
- A risk-managed alternative to probabilistic voluntary credits
Not as:
- A speculative environmental instrument
A narrative-driven ESG product
Investment Committee Decision Memo
Bottom Line
The emissions avoidance project is structured to answer the core investment-committee question under modern scrutiny:
“Can this climate claim be defended years later—under audit, regulation, or litigation—without relying on assumptions?”
Based on ownership-based permanence, conservative accounting, and independent ISO validation, the answer is yes.
Available on request:
- Transaction-specific risk memo
- Legal counsel issue-spotting appendix
- Auditor-focused evidence map
- Board or IC slide version