Last year, we founded an Africa Nature-based Solutions (NbS) Program and secured the commitment of major investors for the development and implementation of socially inclusive, large-scale and long- term projects that are consistent with our strategy to identify and work with local groups and their existing trust networks. Our objective is to develop at least 30 high-quality community-based NbS carbon projects by 2024. The first N4J-sponsored project has been developed in partnership with the Gouritz Cluster Biosphere Reserve in South Africa.
The current state of the world and the accelerating impacts of climate change call for a dramatic increase in the number and scope of NbS projects. To accelerate project identification, we issued a Request for Proposals (RfP) in December 2022. With this, we aimed to go beyond our existing, extensive networks to identify suitable partner organizations with high-quality project proposals that could qualify for project funding through our Africa NbS Program.
Through the RfP we aimed to do three things: 1) Introduce the NbS concept to the many small and medium-sized organizations across multiple countries that have no familiarity with the concept, 2) Start to build a network of organizations that can work with one another to build resiliency by integrating nature more fully into their land management approaches, and 3) Ensure that project applicants knew that their proposals were evaluated holistically and systematically in a transparent fashion.
The remainder of this short paper focuses on the third of these objectives by describing the Multi-Criteria Decision Analysis (MCDA) tool (Version 1.0) that we have developed to ensure that project proposals are systematically and fairly evaluated.
Multi-Criteria Decision Analysis (MCDA)
NbS projects are complex and have multiple sought-after outcomes beyond sequestering carbon. They will succeed if they are socially just, environmentally and economically sustainable, and structured to address risk over time. That’s a tall order. Using the RfP and MCDA tool, we can gain insights into our local partners’ technical and managerial capabilities and what we will need to do to help them succeed over time.
Hence, the MCDA tool was built to evaluate a range of alternatives using multiple criteria, each with associated indicators. (It’s clear when you look at the tables). We needed this structured approach to ensure that our selection of partners and their projects is made through a balanced and consistent process of evaluation – and with the underlying objective of ensuring that they align with N4J’s mission and our investors’ key objectives.
The development of the MCDA tool has been led by Nicci Mander, N4J’s Director for NbS in Africa, and has included inputs from N4J’s project partners and investors. There are two stages in the MCDA evaluation process. The first stage comprises high-level eligibility screening, and the second involves scoring project proposals and partner capabilities using a set of weighted criteria and indicators.
This eligibility screening process includes a high-level ethical due diligence check on partner organizations and screens their proposed projects for potential major risk factors, including whether they qualify as bona fide NbS projects and are likely to generate additional, measurable, and permanent carbon benefits. The table below lays out the indicators for eligibility and provides commentary for Fail, Uncertain, and Pass.
Projects that pass the eligibility test, or receive an “uncertain” score due, for example, to the early stage of project development, are progressed to the second stage in the evaluation. Projects that fail the eligibility test are referred back to the proponents with reasons, and N4J invites these partners to resubmit their projects if / when they have addressed the eligibility issues. Note: PIN stands for Project Identification Note (a type of early-stage proposal).
Eligible projects are technically evaluated using multi-criteria analysis to score each project proposal. The criteria included in the MCDA evaluate and score the organizational strength and delivery capabilities of the project partner, the project’s potential to deliver benefits, and potential feasibility issues/risks associated with the project. Given N4J’s aim of developing large-scale and long-term projects, the potential for replication and/or scaling of the project is also evaluated.
The criteria are weighted based on their relative importance to the success of the project. These weightings were developed collaboratively with our major investors and a selection of existing project partners and will continue to be refined over time. Here’s an example.
One of the major advantages of using the MCDA approach to evaluate NbS project proposals is that it provides a balanced, transparent assessment of the different types and scales of benefits that are associated with each project. This helps avoid decision-making bias towards projects that offer high potential for very specific types of benefits. For example, by using the MCDA tool, it is possible for a project proposal to score very high on carbon benefits, but not rank as high overall as a project with a better balance of social, ecological, and carbon benefits. See the example table below.
Putting It All Together
To date, we have received over 60 project proposals through the RfP process, and our target is to move between six and ten of these into pre-feasibility / project design stage within the next few weeks. All applicants will get substantive feedback on their submissions based on the outcome of the eligibility screening and/or MCDA evaluation.
We are taking this approach to other parts of the world, but will, of course, adapt it based on the learning we do in Africa and the regionally specific considerations of new areas. Finally, this is the first iteration of the MCDA (Version 1.0 as noted above) and we welcome your feedback. If you would like to try this approach for your own projects, please do so but we only ask that you share your experience with us. Thank you.