Where Did the Carbon Money Go?

In Verra’s Version 5 consultation on the Verified Carbon Standard (VCS), Eco Sustainability submitted feedback on one issue that goes right to the heart of trust in carbon markets: financial transparency in benefit sharing.

On paper, benefit-sharing agreements promise to channel revenues from carbon credits back to Indigenous Peoples, local communities, and customary landowners. In practice, the picture is often murkier. Across ASEAN, we have seen intermediaries and “project partners” acting as gatekeepers, controlling financial flows and keeping beneficiaries in the dark. Communities hear about millions of dollars in credit sales, yet on the ground the benefits are far less visible.

That is why we strongly supported Verra’s proposal for mandatory disclosure of financial information to beneficiaries. If local communities cannot see the numbers, benefit sharing is little more than words.

But topline numbers alone are not enough. Categories like “administration” or “community benefits” can hide more than they reveal. Globally, there have been cases where “administration” swallows up large chunks of revenue, with little clarity on whether this covers legitimate operations or inflated intermediary fees. Beneficiaries need breakdowns that show revenues, intermediary fees, timelines, and actual disbursements.

Transparency also needs teeth. Annual updates should be mandatory so communities can see whether promises made in year one are still being honoured in year three. Independent verification of financial flows would add another layer of accountability. And the information itself must be accessible. Reports in English or technical jargon are meaningless to farmers in rural ASEAN unless they are translated into local languages and presented in formats people can understand.

Finally, there must be a way to act when things go wrong. Without a grievance mechanism, communities who are excluded or short-changed have nowhere to turn. In many parts of the world, the absence of recourse has left frustration to build silently, eroding trust in the entire system.

Eco Sustainability’s submission made a simple point: carbon markets live or die on trust. If communities see carbon finance as another form of extraction, credibility collapses. If they see it as a transparent partnership, markets can grow with legitimacy.

About Eco Sustainability

As a trusted advisor on sustainability and climate policy, Eco Sustainability is not only aligned with global standards - we help shape them by contributing to technical consultations and international standard-setting processes.