Quality matters: how Shell is working to build confidence in its carbon credit portfolio for customers
Sam Hoffer, Nature Based Solutions Global Technical Manager at Shell, explains the screening process that Shell uses to help assess the quality of carbon credit projects which includes safeguards that aim to protect local communities and ecosystems.
Sam Hoffer
Global Technical Manager for Shell’s Nature Based Solutions business – manages a global team of experts responsible for overseeing the quality of Shell’s carbon credit portfolio. Sam’s background is in climate change science and environmental economics. Sam joined Shell in 2020 and works out of Washington DC.
Research from late 2024 indicates a growing commitment among Fortune 500 companies to achieve net-zero emissions by 2050. In 2020, just 8% of these companies had set such a goal; by 2024, that number had risen to 45%. A parallel, though more modest, increase has been observed in the use of carbon credits among this group, with adoption rising from 40% in 2023 to 42% in 2024.1
However, this momentum risks being undermined. Media and industry reports have brought to light concerns around the quality and impact verification of certain carbon credit projects. As a result, some companies pivoted to delay public disclosure of their climate strategies – including their use of credits – in response to this scrutiny and potential reputational and legal risks.2 Despite this, while Shell believes that efforts to avoid and reduce emissions should be prioritised, there is a clear and immediate role for carbon markets to play, especially in hard-to-electrify sectors such as marine and aviation, as a way to compensate for emissions that can’t yet be avoided or significantly reduced.
To overcome the negative perception of carbon credits and build trust in the VCM, companies investing in projects need a full understanding of the quality of the carbon credits that these projects can generate. However, identifying projects that make a measurable difference can be challenging.
To address this, Shell has developed its own due diligence process to help customers feel confident in engaging with this growing market.
How, then, does Shell aim to verify the quality and efficacy of the projects that it invests in?
Tapping into carbon market experience to determine carbon credit quality
To help answer this question, we asked Sam Hoffer, Nature Based Solutions Global Technical Manager at Shell. He and his team bring considerable expertise in areas from biodiversity, forestry, agriculture and more. Collaborating with Shell experts across the company, the team evaluates carbon credit projects for Shell’s Environmental Products Trading team’s offtake.
“Because a lot of my team come from the world of carbon certification, we know how the standards are built,” he explains. “We understand how the rules and requirements can vary depending on the project type and we know what to look for to determine the quality of the carbon credits. All of that is crucial to our success as a team – and to Shell’s success as an investor in projects and as a supplier of high-integrity carbon credits.”
Going above and beyond: Shell’s carbon credit screening process
To evaluate projects, Sam and his team conduct a screening process designed to determine the strength and trustworthiness of a project’s work.
That starts with the prerequisite that projects must have achieved internationally recognised, independent accreditation (such as those provided by Verra, Gold Standard or the American Carbon Registry). Then Sam’s team uses a standardised process to analyse the projects, covering more than 40 individual risk criteria within seven key areas of risk. These are:
Geographical location
Looking at the stability of the local regulatory environment, including the threat of corruption and the potential for policy change to impact the project’s long-term success.
Business ethics
Exploring the organisations involved in developing and implementing a project (along with any partners) to understand their experience and track record of delivering on project outcomes.
Technical risks
The broadest element of the review looks at factors like additionality, baseline setting, project design and delivery capacity. It also includes a detailed assessment of the number of carbon credits the project could generate based on the quantification of its emissions reductions.
Labour and working conditions
Many projects work with local communities, often directly hiring residents to help implement a project. Sam and his team evaluate the project’s standing in this regard, reviewing things like conditions of employment and work policies including anti-discrimination.
Community engagement and benefits
Evaluating the project’s stakeholder consultation approach, grievance mechanisms and the success with which it shares its benefits with local communities.
Biodiversity and environment
Assessing the impact of the project on biodiversity and the natural environment. For example, is there a risk of deforestation when preparing the development of a renewable energy facility?
Other reputational risks
Determining the overall credibility of the project, including possible negative market sentiment.
To explore these risk factors, Sam’s team gathers a range of evidence from a project’s operators. But while a project might have all the correct processes in place on paper, they also test whether this translates into real-world action. This includes visiting some projects to see how a project is set up and performing while gaining the opportunity to engage with the wider community surrounding it. They can also use technologies like satellite mapping to help verify the work of the project. Together, these methods help the team to assess the integrity of the carbon credits being generated.
Due diligence is ongoing: Why the screening process never really ends
Even for projects that get the green light, the screening process does not end at the point of the initial investment. As Sam explains:
Sam Hoffer, Global Technical Manager for Shell’s Nature Based Solutions“Accurately quantifying emissions reductions is a scientific question, and science is evolving all the time. Standards therefore often need to change, and projects must evolve with them.”
Working with a broad team of internal Shell experts in fields such as biodiversity, social performance, and ethics and compliance, Sam and his team carry out ongoing due diligence to stay on top of this. First, by checking the independent certification cycle (which requires projects to regularly re-certify their credentials), reviewing any new evidence and calculations. And second, by talking to third-party stakeholders and monitoring market sentiment for changes to a project’s risk profile. Recommendations are then modified as needed in order to respond to changes.
Shell’s own due diligence process is also independently audited by Lloyd’s each year, providing assurance over the quality of the projects it supports and the carbon credits they generate.
Discover the difference our process can make for you
We’ve developed our own due diligence process to help us – and our customers – feel confident engaging with this growing market.
Choosing a partner that can help build trust in carbon credits
The importance of quality is not just a challenge for Shell but is a prerequisite to the credibility of carbon markets as a whole. In-depth due diligence is not simple but investing the time and effort to evaluate projects helps Shell to invest in high-quality projects.
At Shell, we believe that carbon markets are a vital additional lever for the world as it transitions towards net-zero emissions. Our due diligence process is one way we believe we can help to build trust and improve transparency in the constantly evolving carbon market.
Date of publication: August, 2025
Shell Environmental Products
Used in addition to low-carbon fuels and decarbonisation technologies, quality carbon credits offer business leaders the choice to compensate for emissions that cannot yet be avoided or reduced.
Disclaimers
1 Morgan Stanley. “Where the Carbon Offset Market Is Poised to Surge.” 2023.
2 World Economic Forum. “The Voluntary Carbon Market: Climate Finance at an Inflection Point - PDF (PDF).” 2023.
