From a carbon accounting perspective, where it is possible to use a sector threshold as the baseline for measuring performance, then it will be.  Within the STAC, the standards used must be referenced (for example, a party to a STAC would disclose the sector decarbonization approach it is using, such as the EU Taxonomy ESRS.  This means that within a specific business activity, outperformance relative to what is acknowledged as sector-aligned will be possible.   

Where a sector threshold is not available to use as the baseline, then the sector average for that business activity – based on CDP’s reporting universe – can be used.  In the case of agricultural projects, it makes sense to use monitoring baselines that are measured relative to the condition of a habitat or ecosystem prior to the financed intervention.  

A STAC is a forward-looking instrument that sets performance milestones, which are used as the basis for releasing performance based payments based on the contractual agreement.  Measurement and reporting on performance relative to contractually agreed KPIs must be independently audited.