Practice areas

National environmental products clearinghouses, aggregator design, Nationally Determined Contribution monetization, and Article 6.2 authorization architecture.

The opportunity inside the NDC

Mitigation activity is already happening inside a country's borders. Most of it is sold as individual credits into a thin voluntary market at prices that bear no relationship to what the underlying tonne is worth to a buyer who has to hold it.

Depending on what a government is trying to achieve, that gap is closed in different ways: a national clearinghouse that aggregates and presents domestic supply as a single offering, an aggregator structure that lets smaller projects reach institutional buyers, a financing program built against the headroom in a country's Nationally Determined Contribution, or an authorization architecture under Article 6.2 that makes units eligible for the buyers who need them. These are not alternatives so much as components, and most programs use more than one.

What the sovereign is actually selling

When a government authorizes a unit for a use other than its own Nationally Determined Contribution, it makes a corresponding adjustment: the tonne returns to the national account and cannot be counted twice. That authorization is a sovereign covenant, and it is the reason institutional buyers will hold an authorized unit and not a voluntary credit. Headroom under a country's own trajectory is therefore a monetizable national asset, and its size can be estimated from the NDC and the national inventory before any commitment is made.

How we work

• Size the opportunity from the country's Nationally Determined Contribution, national inventory, and projected emissions trajectory.
• Determine which combination of clearinghouse, aggregation, NDC financing, and Article 6.2 authorization fits the government's objectives and its administrative capacity.
• Design the institutional architecture: entity form, governance, intake standards, and the authorization gate.
• Specify the instrument the units are presented in, and the legal documentation behind it.
• Map the program against Article 6, CORSIA, and the accounting treatment buyers must apply.
• Prepare the government's own team to operate the program, and remain available through implementation.

Design and full documentation of the financial instruments that carry environmental assets into institutional portfolios: custody, clearing, settlement finality, and permanence and reversal allocation.

The questions an instrument has to answer

An institution cannot hold an asset it cannot custody, cannot settle, and cannot carry on its balance sheet. Instrument architecture is the work of resolving each of those questions in documents, using legal forms that already exist and that a custodian, an auditor, and a risk committee will already recognize.

• Does the asset survive the failure of the entity holding it?
• Who carries counterparty risk between trade and delivery?
• When is transfer final, and does payment move against it?
• Who owns reversal risk, on what terms, and at what price?
• What does the holder actually own, expressed in a body of law a court has already interpreted?

How we work

We start from the buyer's constraints rather than the asset's features, because the buyer's constraints are the ones that are not negotiable. From there the design work covers the holding structure, the custody and settlement path, the allocation of delivery, authorization, and permanence risk, the insurance or reserve layer where one is warranted, and the full documentation set.

Fund and vehicle architecture for institutional exposure to environmental assets, hedging strategies and risk management tools, remediation and natural capital structures, and blended public and private designs.

Hedging and risk management

Institutional allocators already model a carbon price inside their climate risk frameworks and hold no position in the underlying. That is an unhedged exposure being carried deliberately, usually because no instrument exists in a form the institution can hold. We advise on the instruments and structures capable of offsetting transition and physical climate risk already embedded in a portfolio, and on how those positions are sized, valued, documented, and reported.

Vehicles and structures

• Fund architecture for exposure to sovereign-authorized environmental units, including domicile, regulatory perimeter, valuation policy, and reporting.
• Remediation and natural capital vehicles, including government-sponsored structures aimed at Article 9 and comparable mandates.
• Blended designs where a public sponsor supplies permits, political sponsorship, or first-loss, and private capital supplies the balance.
• Diagnostics on an allocator's embedded transition risk exposure and the instruments capable of offsetting it.

How we work

We design the vehicle, specify the regulatory and accounting perimeter it must sit inside, and prepare the documentation and materials a sponsor needs. The sponsor, the manager, and the placement of any interests remain entirely with the client and its licensed advisers.

Article 6 compliance design, CORSIA eligibility, corresponding adjustment and permanence obligations, sustainability and climate disclosure reporting, and accounting treatment.

Where we work

• Article 6.2 program design, authorization drafting, and the corresponding adjustment as a contractual covenant.
• Permanence and reversal obligations, and how they travel with a unit across jurisdictions.
• CORSIA eligibility and the emerging compliance demand channels.
• SFDR reporting, CSRD, ISSB, and the other climate disclosure regimes an institution or corporate is subject to.
• Accounting treatment of carbon credits and environmental instruments, and what it implies for whether an institution can hold them.

How we work

This work is usually done alongside the client's counsel and auditors rather than in place of them. We are not a law firm and we do not give legal, tax, or accounting advice. What we contribute is the design judgment about how a structure has to be built so that those opinions come back clean.