Swiss carbon offset giant pulls plug on Zimbabwe project amid allegations

SOUTH Pole, the world’s leading seller of carbon offsets, has terminated its involvement in its flagship forest protection project in Zimbabwe following recent allegations of exaggerated claims.Around one-fifth of the Swiss firm’s staff could also lose their jobs, according to media reports. Carbon offsets allow firms and individuals to compensate for the carbon emissions they create – through, for example, an airplane flight or a building project – by paying to pull carbon out of the air elsewhere. Voluntary offsets have developed into a billion-dollar global market.
South Pole said on Friday that it was not confident the Kariba REDD+ project – owned and developed by Carbon Green Investments (CGI) – met the standards it expected from its partners. The Kariba REDD+ forest conservation project in northern Zimbabwe is one of the world’s largest forest conservation projects. REDD stands for “Reducing emissions from deforestation and forest degradation in developing countries”.
“All activities related to carbon certification and carbon credits from the Kariba REDD+ project will now be the responsibility of CGI, and South Pole’s role as the carbon asset developer has ended,” South Pole said in a statement on October 27. CGI did not immediately respond to a request for comment made by Reuters.
The major REDD+ project has been issued with around 36 million credits since 2011, all intended for removing carbon from the air by preserving the forest. A carbon credit represents a ton of climate-warming carbon dioxide or its equivalent either removed from the atmosphere or prevented from entering it in the first place.
South Pole said the carbon credits sold to date maintain their validity, irrespective of South Pole ending its contract with CGI. The Swiss firm’s sudden decision to terminate its partnership comes as the Kariba project and carbon offset schemes more generally have faced mounting criticism and difficulties regarding the integrity of the project and the carbon credits associated with it.
Last week the Washington, D.C.-based certification body Verra, the world’s leading carbon standard setter for the offsets market, announced it had launched an investigation into the Kariba project. This follows a critical report published on October 16 by the NewYorker magazine, entitled “The Great Cash-for-Carbon Hustle”, which claimed South Pole sold millions of credits for carbon reductions that weren’t real.
In a statement, Verra said on October 17 that it had been “deeply disturbed” by the magazine’s allegations, which had “raised serious questions about the carbon-offsetting firm South Pole and the Kariba project in Zimbabwe”. The non-profit certification body said it had launched an investigation into the project, which would remain on hold, along with “any further credit issuances” until the probe is complete.

South Pole, which has vehemently denied that it has knowingly sold worthless CO2 certificates, told Swiss public radio, SRF last week, that it would give full support to Verra’s probe and that the company’s role in the Kariba project would be “actively reviewed” in light of the revelations.
Kariba REDD+, which was started in 2011, is one of the world’s first large-scale forest protection projects, designed to conserve 785,000 hectares (1.94 million acres) of woodland in northern Zimbabwe. South Pole’s flagship has been a major beneficiary of carbon credits, as big firms fund projects that claim to remove carbon from the atmosphere to offset their own emissions. Multinationals such as Gucci, Nestlé and Volkswagen have voluntarily offset their emissions by investing in the project, according to Swiss public television SRF.
Criticism and difficulties for offset schemes
The Kariba project led to the spectacular growth of South Pole, but the Zimbabwe project and carbon offset schemes more generally have faced mounting criticism and difficulties in recent months. Studies published in January and March by various news organisations showed that South Pole, along with Verra, were linked to forest protection credits that did not deliver the promised carbon savings.
Follow-up research into the Kariba project by SRF, in collaboration with the German weekly Die Zeit and the Dutch research collective Follow the Money, published in July 2023, revealed that only a fraction of promised investments in Zimbabwe could be verified on site.
Several firms have reportedly been pulling out of the Kariba scheme. In May, The Guardian newspaper reported that Gucci had ended its collaboration with South Pole and the forest in Zimbabwe.
More widely, an international team of scientists and economists led by the University of Cambridge and VU Amsterdam found that millions of carbon credits are based on crude calculations that inflate the conservation successes of voluntary REDD+ projects. Most carbon offset schemes are significantly overestimating the levels of deforestation they are preventing, the according to the study which was published in the journal Science in August.
Carbon offset methodology is ‘not perfect’
Defending his company, South Pole CEO Renat Heuberger told Reuters they had followed the approved methodology for the Kariba project at all times.
“There is no other way to do deforestation projects. You cannot know ten years in advance what the deforestation rates will be,” he said in September.

Carbon credit certifier Verra, which controls around three-quarters of all voluntary credits worldwide, said it welcomed the scrutiny of the voluntary carbon market by journalists, scientists and environmental groups, while stressing its importance.
“It will not be possible to achieve global climate goals without the financing leveraged by the carbon markets, so we must encourage transparency in the markets and commit to continuous improvement,” it said.
REDD projects have achieved enormous impact to date, but the system is not perfect, Verra admitted.
“The calculation of emission reductions that result from this work is inevitably less clear-cut than in other cases. That is why we are continuously striving to update our REDD and all other methodologies in the Verified Carbon Standard Program to ensure they reflect best practices, the latest science, and our learnings from the past decade,” it said.
Investors move away from offsets
Until this year, the voluntary carbon market had grown as more companies came under shareholder pressure to adopt net-zero policies. The market was worth around $2 billion in 2021 and Shell and Boston Consulting Group jointly forecast in January that it could reach between $10 billion and $40 billion by 2030. But in September Reuters reported that voluntary carbon markets had shrunk for the first time in at least seven years, as companies reduced buying. Demand for carbon credits is on track to fall in 2023, according to two of the top data providers. The number of credits used by companies fell 6% in the first half of the year, data from BloombergNEF shows. Data from consultancy Ecosystem Marketplace showed a sharper fall of 8% over the same period.
“We are moving away from investing in carbon offsets for our brands to invest in programmes and practices that help reduce greenhouse gas emissions in our own supply-chain and operations, where it makes the most difference to reach our net zero ambition,” Nestlé told Reuters.
Recent developments appear to have had consequences for staff at South Pole. SRF reported that the firm announced internally two weeks ago that it would have to lay off a fifth of employees due to “a major restructuring”.
South Pole refused to comment, telling SRF: “Like every company, we regularly assess whether our global team is sustainably structured and staffed based on market dynamics and demand.” South Pole has around 1,200 employees