PCS ESS 005 Environmental & Social Safeguards Standard_v1.0

Document Control

Document identification

• Document code: PCS-ESS-005

• Title: Environmental & Social Safeguards Standard

• Scope: Establishes mandatory environmental and social safeguard requirements for all PCS project types across the full project cycle, including risk-based screening, documentation requirements, stakeholder engagement and FPIC where relevant, monitoring and verification expectations, corrective action, transparency, and eligibility rules for safeguard performance labels where applicable.

• Outcome: Ensures projects avoid harm, uphold rights, manage E&S risks, and maintain safeguard compliance throughout validation, monitoring, verification, and renewal under PCS rules.

Version history and change log

Table DC-1. Revision history

Version	Date	Status	Summary of changes	Prepared by	Approved by
v1.0	TBD	Draft	Initial release for public consultation	PCS	TBD

Superseded versions

No superseded versions for v1.0.

Governance note on versioning and archiving

Only the latest approved version of this Standard shall be used. Superseded versions shall be archived and retained for traceability and audit purposes, consistent with PCS governance rules.

Chapter 1 - Introduction

1.1 Purpose

1. The PCS Environmental & Social Safeguards Standard (PCS-ESS 2.0) establishes the mandatory environmental and social requirements that all mitigation activities must meet to be registered and maintained under the Planetary Carbon Standard (PCS). Its purpose is to ensure that PCS-certified projects:

• avoid adverse environmental and social impacts;

• uphold human rights, land rights, and community well-being;

• protect biodiversity, ecosystems, and cultural resources;

• contribute positively to sustainable development;

• operate in accordance with the highest international integrity frameworks.

1. The Standard also introduces the PCS Safeguard+ System, which recognizes projects that exceed minimum safeguard requirements and demonstrate exceptional environmental and social performance.

1.2 Scope of Application

1. This Standard applies to all PCS project types, including:

• renewable energy and energy efficiency projects,

• industrial mitigation activities,

• AFOLU/Nature-Based Solutions,

• engineered removals (CCS, BECCS, DACCS),

• household and distributed technologies,

• waste and circular-economy projects,

• transport and built-environment activities.

1. Safeguard requirements apply:

• during project design,

• during implementation,

• during monitoring and verification,

• throughout the crediting period,

• and during renewal.

1.3 Relationship With Other PCS Standards

1. This Standard works in conjunction with:

• PCS-STD-005 (Project Standard)

• PCS-STD-003 (Sustainability & SDG Integrity Standard)

• PCS-STD-004 (Validation & Verification Standard)

• PCS-STD-001 (Avoidance of Double Counting)

• PCS Registry Protocol

• PCS Methodologies (project- and sector-specific rules)

1. Safeguards address harm prevention and risk management, while the SDG Standard addresses positive development contributions.

2. The two systems are complementary, but safeguard compliance is mandatory, whereas SDG labels are optional.

1.4 Alignment With International Frameworks

1. PCS-ESS 2.0 is aligned with the following global frameworks:

• IFC Performance Standards

• World Bank Environmental & Social Framework (ESF)

• UN Guiding Principles on Business and Human Rights (UNGPs)

• ICVCM Core Carbon Principles (CCPs)

• ISO 31000 (Risk Management)

• ISO 14064 (GHG integrity)

• FAO Voluntary Guidelines on Land Tenure

• UN Declaration on the Rights of Indigenous Peoples (UNDRIP)

1. Alignment with these frameworks ensures that PCS safeguards meet the expectations of global markets, buyers, and regulators.

1.5 The PCS Safeguard+ System

1. PCS-ESS 2.0 introduces a three-tier safeguard excellence system:

1

PCS Safeguard Compliant (PSC)

Minimum safeguard requirements fully met; required for registration and issuance.

2

PCS Safeguard+ (Environmental)

Awarded to projects that exceed environmental safeguard requirements and demonstrate measurable ecosystem co-benefits.

3

PCS Safeguard+ (Social)

Awarded to projects that exceed social safeguard requirements and demonstrate inclusive, community-positive outcomes.

1. Projects achieving both Safeguard+ tiers become eligible for PCS SDG+ labeling under the PCS SDG Standard.

1.6 Risk-Based Approach

1. PCS-ESS applies a risk-based screening and management system that classifies each project into:

• Low Risk

• Moderate Risk

• Substantial Risk

• High Risk

1. The classification determines:

• documentation intensity,

• whether an Environmental & Social Management Plan (ESMP) is required,

• monitoring frequency,

• verification scope,

• eligibility for Safeguard+ labels.

1. Projects classified as High Risk may be rejected or required to undergo redesign prior to validation.

1.7 Responsibilities

1. Project Proponent (PP):

• Conduct safeguard screening

• Prepare safeguard documentation and mitigation plans

• Implement mitigation measures

• Monitor and report E&S performance

• Operate a grievance mechanism

• Maintain compliance throughout the project cycle

1. Validation & Verification Body (VVB):

• Independently assess safeguard compliance

• Verify evidence and mitigation measures

• Identify safeguard non-conformities

• Conduct site visits, interviews, and checks

• Provide safeguard findings in PVR/VR

1. PCS Secretariat:

• Approve risk classification and safeguard compliance

• Conduct targeted safeguard audits

• Evaluate eligibility for Safeguard+ labels

• Determine corrective actions or suspensions

• Oversee transparency in the PCS Registry

1.8 Safeguard Documentation Requirements

1. At minimum, all projects must submit:

• PCS Safeguards Form (screening tool)

• Risk Classification

• Safeguard mitigation measures

• Evidence of stakeholder engagement

• FPIC documentation (if Indigenous Peoples involved)

1. Additional documents may include:

• Environmental and Social Management Plan (ESMP)

• Biodiversity Management Plan (BMP)

• Land Tenure Assessment

• Labor Management Procedures (LMP)

• Community Development or Benefit Sharing Plan

1. All safeguard documentation becomes part of the PCS Registry.

1.9 Continuous Compliance Requirement

1. Safeguards are not “one-time” conditions. Projects must maintain compliance throughout:

• implementation,

• monitoring,

• verification,

• renewal periods.

1. Changes in project design, land tenure, community dynamics, environmental conditions, or regulatory environments may require updated safeguard assessments.

2. Failure to maintain compliance may result in:

• suspension of issuance,

• loss of Safeguard+ designation,

• corrective action requirements,

• project deregistration in severe cases.

1.10 Transparency & Disclosure

1. To ensure credibility, PCS requires public disclosure of:

• key safeguard findings,

• risk classification,

• mitigation plans,

• community engagement processes,

• Safeguard+ award decisions.

1. Sensitive personal data is excluded from disclosure.

Chapter 2 - Principles & Foundations

2.1 Purpose

1. This chapter establishes the foundational values that guide environmental and social safeguards under the Planetary Carbon Standard (PCS). These principles underpin the design, implementation, monitoring, and independent verification of all mitigation activities. They form the basis for determining whether a project is environmentally sound, socially responsible, and aligned with international expectations for high-integrity climate action.

2.2 Alignment With International Norms

1. PCS safeguards are grounded in well-established global frameworks that represent current best practice. These include the IFC Performance Standards, the World Bank Environmental and Social Framework (ESF), the UN Guiding Principles on Business and Human Rights (UNGPs), the UN Declaration on the Rights of Indigenous Peoples (UNDRIP), the ICVCM Core Carbon Principles, and relevant ISO risk-management and environmental standards. These frameworks inform how PCS interprets environmental and social risk, rights protections, stakeholder engagement, and harm prevention across all project types.

2.3 Safeguard Principles

1. The PCS safeguard system is anchored in a set of core principles that shape how environmental and social risks are identified, assessed, and managed. Instead of listing them individually, PCS organizes these principles into a structured set of expectations, shown in Table 2-A.

Table 2-A: Core Principles of PCS Environmental & Social Safeguards

Principle	Description
Do No Harm	Projects must avoid or prevent adverse impacts on people, ecosystems, and resources. Any residual risks must be minimized and responsibly managed.
Human Rights Protection	Projects must respect internationally recognized human rights, avoid discrimination, and refrain from violating labor rights or community rights.
Environmental Integrity	Projects must protect biodiversity, natural habitats, water, soil, and ecosystem function. Environmental degradation is not permitted.
Free, Prior and Informed Consent (FPIC)	Required where Indigenous Peoples or customary landholders may be affected. Consent must be obtained before the project begins and maintained through continuous engagement.
Inclusion and Equity	Projects must ensure fair treatment, access to benefits, and participation of vulnerable and marginalized groups, including women and youth.
Transparency and Accountability	Projects must disclose relevant safeguard information and maintain mechanisms that allow concerns to be raised and resolved.
Precautionary Approach	Where uncertainty exists, projects must apply conservative measures to avoid harm, particularly in sensitive ecosystems or communities.

2.4 Risk-Based Safeguard Management

1. PCS adopts a structured, risk-based approach to safeguard assessment. Rather than treating all projects the same, PCS tailors requirements based on the level of risk identified at registration.

2. Risks are classified into four levels: Low, Moderate, Substantial, and High. Higher risk levels require more documentation, more rigorous mitigation measures, and increased scrutiny during verification.

Table 2-B: PCS Safeguard Risk Classification Structure

Risk Level	Definition	PCS Requirements
Low	Minimal or no anticipated environmental or social risks.	Basic safeguard documentation; standard monitoring.
Moderate	Manageable risks with established mitigation measures.	Additional evidence and more detailed mitigation measures; VVB review focuses on risk controls.
Substantial	Significant risks that require active mitigation and close monitoring.	Mandatory Environmental & Social Management Plan (ESMP); targeted verification; potential PCS Secretariat review.
High	Severe risks or impacts that threaten rights, ecosystems, or community stability.	Project redesign required. PCS may reject registration unless risks can be reduced.

1. This structure ensures proportionality: simple projects are not overburdened, but sensitive projects receive deeper safeguards scrutiny.

2.5 Continuous Improvement and Adaptive Management

1. Safeguard compliance is not a one-time requirement. Projects must continuously assess risks and adjust mitigation measures in response to new information, stakeholder feedback, environmental conditions, or changes in socio-economic contexts.

2. Adaptive management is especially important for AFOLU/NBS projects, distributed technologies with evolving user behavior, and projects in dynamic regulatory environments.

2.6 Integration With PCS SDG Framework

1. Safeguards and sustainable development are connected but distinct. Safeguards prevent harm; SDGs measure positive contributions. Under PCS:

• A project must pass all safeguard requirements to be registered or issued credits.

• PCS Safeguard+ (Environmental or Social) is awarded to projects that exceed minimum safeguard performance.

• Projects achieving both Safeguard+ designations may qualify for the PCS SDG+ Label under the PCS Sustainability & SDG Standard.

1. This ensures a clear hierarchy: no SDG claim can compensate for unmet safeguard obligations.

2.7 Roles and Responsibilities

1. The roles of the Project Proponent, Validation & Verification Body (VVB), and PCS Secretariat are defined in Table 2-C.

Table 2-C: Responsibilities for Safeguard Implementation

Entity	Key Responsibilities
Project Proponent (PP)	Conduct screening, prepare safeguard documentation, implement mitigation measures, monitor performance, operate grievance mechanisms, and maintain compliance.
Validation & Verification Body (VVB)	Independently assess safeguard compliance, verify evidence, conduct interviews and site visits, and classify safeguard-related non-conformities.
PCS Secretariat	Approve risk classification, review safeguard findings, conduct audits, determine eligibility for Safeguard+ labels, and apply corrective actions when needed.

2.8 Universal Applicability

1. The principles contained in this chapter apply to all:

• sectors,

• methodologies,

• host countries,

• project scales (micro to large),

• PCS eligibility levels,

• project stages (registration → monitoring → verification → renewal).

1. There are no exceptions, opt-outs, or simplified safeguard pathways, except where explicitly provided for in PCS methodologies for low-risk distributed technologies.

Chapter 3 - Safeguard Categories

3.1 Purpose

1. Safeguard categories define the areas of environmental and social risk that PCS projects must address. They organize the safeguard requirements into a structured set of themes, ensuring that every project systematically identifies and mitigates potential negative impacts.

2. These categories also guide VVBs in assessing project compliance and determine eligibility for higher-level PCS Safeguard+ recognition.

3. PCS utilizes a consolidated and modernized set of safeguard categories, drawing from IFC Performance Standards and the World Bank ESF, while simplifying terminology and requirements to suit a carbon-standard context.

3.2 Overview of PCS Safeguard Categories

1. PCS safeguards are divided into twelve categories, covering environmental, social, and governance dimensions. Each category represents a mandatory area of compliance for all projects unless clearly demonstrated to be not applicable.

2. The categories are summarized in Table 3-A, followed by further explanation.

Table 3-A: PCS Safeguard Categories

Safeguard Category	Scope of Requirement
1. Environmental Protection	Prevention of environmental degradation, soil damage, pollution, and unsustainable practices.
2. Climate & Ecosystem Integrity	Protection of natural ecosystems, climate stability, and ecological resilience.
3. Biodiversity & Natural Habitats	Avoidance of adverse impacts on species, habitats, and ecological connectivity.
4. Water & Soil Stewardship	Sustainable management of water resources and soil health.
5. Pollution Prevention & Waste Management	Avoidance of air, water, noise, and soil pollution; safe waste handling.
6. Land & Resource Rights	Respect for legal and customary land and resource rights.
7. Indigenous Peoples & FPIC	Protection of Indigenous rights and mandatory Free, Prior, and Informed Consent.
8. Community Health, Safety & Security	Protection of community well-being, safety, and resilience.
9. Labor & Working Conditions	Fair treatment of workers and respect for labor rights.
10. Gender Equality & Inclusion	Non-discrimination, inclusivity, and gender-responsive project design.
11. Cultural Heritage Protection	Protection of historical, spiritual, and cultural resources.
12. Governance, Ethics & Anti-Corruption	Transparency, anti-corruption measures, lawful practices, and ethical conduct.

3.3 Environmental Safeguard Categories

3.3.1 Environmental Protection

1. Projects must demonstrate that their activities do not cause environmental degradation. This includes avoiding deforestation, habitat fragmentation, erosion, contamination, and unsustainable resource extraction. The Project Proponent must provide evidence of compliance with Host Party environmental regulations and international norms.

3.3.2 Climate & Ecosystem Integrity

1. Projects must avoid actions that undermine ecological resilience or contribute to long-term climate risks. This applies not only to emissions but also to broader ecosystem impacts such as forest structure disruption, wetland modification, or land-use changes.

3.3.3 Biodiversity & Natural Habitats

1. Projects must ensure that sensitive ecosystems — including critical habitats, threatened species zones, wetlands, and protected areas — are not adversely affected. If the project may influence biodiversity, a biodiversity screening or management plan may be required.

3.3.4 Water & Soil Stewardship

1. Projects must manage water resources sustainably, preventing over-extraction, eutrophication, contamination, or disruption of natural hydrology. Soil conservation must be integrated where land disturbance occurs.

3.3.5 Pollution Prevention & Waste Management

1. All projects must control pollution risks, including emissions, effluents, waste disposal, hazardous material handling, noise pollution, and dust control. Pollution control should follow Host Party standards or international guidelines where local standards are insufficient.

3.4 Social Safeguard Categories

3.4.1 Land & Resource Rights

1. Projects must respect formal and customary land tenure systems. Projects must not displace communities, undermine land access, or diminish resource availability. Land-use agreements must be documented, and disputes must be resolved prior to registration.

3.4.2 Indigenous Peoples & FPIC

1. Where Indigenous Peoples may be affected, the project must secure Free, Prior, and Informed Consent (FPIC). FPIC must be documented, renewed as necessary, and verifiable by the VVB. This is a non-negotiable safeguard.

3.4.3 Community Health, Safety & Security

1. Projects must avoid health or safety risks such as air pollution, hazardous equipment, water contamination, increased conflict risk, or security-related harm. A community safety assessment is required for moderate or higher-risk projects.

3.4.4 Labor & Working Conditions

1. Workers must be protected through fair wages, safe conditions, and compliance with ILO Core Conventions. Forced labor, child labor, discrimination, or unsafe conditions are strictly prohibited.

3.4.5 Gender Equality & Inclusion

1. Projects must promote inclusivity and avoid discrimination. Women, youth, and vulnerable groups must be engaged meaningfully in consultation and benefit-sharing processes. Gender risks must be screened and addressed.

3.4.6 Cultural Heritage Protection

1. Projects must identify potential impacts on tangible or intangible cultural heritage, including sacred sites, historic artifacts, and Indigenous cultural values. Avoidance and preservation measures must be documented.

3.5 Governance and Ethical Safeguard Category

3.5.1 Governance, Ethics & Anti-Corruption

1. Projects must maintain ethical conduct and comply with applicable laws. This includes:

• anti-corruption controls,

• transparent contracting,

• disclosure of conflicts of interest,

• lawful resourcing and procurement,

• truthful reporting in all PCS documents.

1. Projects with credible allegations of corruption, fraud, or illicit activities may be denied registration or have issuance suspended.

3.6 Integration of Categories Into the PCS Risk Assessment

1. These safeguard categories form the basis for:

• the PCS Safeguard Screening Form,

• risk classification (low, moderate, substantial, high),

• ESMP requirements,

• VVB validation and verification scope,

• eligibility for PCS Safeguard+ (Environmental or Social).

1. Each category may trigger different documentation pathways depending on risk level.

2. A summary of how categories influence documentation is provided in Table 3-B.

Table 3-B: Summary of Documentation Requirements by Safeguard Category

Category	Low Risk	Moderate Risk	Substantial Risk	High Risk
Environmental Protection	Basic screening	Mitigation measures	ESMP required	Project redesign likely
Biodiversity & Natural Habitats	Screening	Additional evidence	Biodiversity Plan	Not permitted if critical habitat affected
Land & Resource Rights	Screening	Land rights documentation	Detailed tenure analysis	FPIC + Independent audit
Indigenous Peoples	Not applicable	Screening	FPIC required	FPIC + external monitoring
Labor & Working Conditions	Screening	Policies documented	LMP required	Stop-gap corrective actions
Community Health & Safety	Screening	Risk mitigation	ESMP required	High risk may disqualify
Governance & Ethics	Screening	Controls described	Enhanced oversight	PCS audit required

3.7 Mandatory Applicability

1. All twelve safeguard categories apply to all PCS projects unless a category is explicitly demonstrated to be not relevant to the project’s nature or location. In such cases, justification must be clear, documented, and validated by the VVB.

2. No safeguard category can be ignored; at minimum, every category must undergo screening to determine relevance and risk level.

Chapter 4 - Risk Classification Framework

4.1 Purpose of the Risk Classification System

1. The PCS Safeguards Standard uses a risk-based approach to determine the level of scrutiny, documentation, monitoring, and verification required for each project. Not all mitigation activities present the same level of environmental or social risk, and the PCS system adjusts safeguard obligations proportionally.

2. The Risk Classification Framework ensures that:

• low-risk projects are not burdened by excessive requirements,

• moderate- and substantial-risk projects implement appropriate controls,

• high-risk projects undergo enhanced assessment or may be deemed ineligible.

1. Risk classification is conducted during registration and revisited during verification if conditions change.

4.2 Four-Tier PCS Risk Levels

1. PCS classifies projects under four tiers:

• Low Risk

• Moderate Risk

• Substantial Risk

• High Risk

1. Each tier determines the depth of documentation required and the oversight applied by PCS and the VVB. The four tiers are summarized in Table 4-A.

Table 4-A: PCS Safeguard Risk Levels

Risk Level	Definition	Implications
Low Risk	Minimal potential for adverse environmental or social impacts; limited footprint; no vulnerable groups affected.	Simplified safeguard requirements; annual reporting; standard verification.
Moderate Risk	Impacts are possible but predictable; mitigation measures are straightforward; no likelihood of irreversible harm.	Additional evidence required; targeted mitigation measures; closer VVB scrutiny.
Substantial Risk	Potential for significant impacts requiring robust management; presence of vulnerable groups; sensitive ecosystems nearby.	Full Environmental & Social Management Plan (ESMP); strengthened monitoring; PCS review may be required.
High Risk	Potential for severe, irreversible, or widespread harm; major rights or ecosystem issues; conflict-affected or highly sensitive areas.	Project redesign likely; may be rejected unless risks can be reduced; enhanced oversight.

4.3 Screening Process and Classification

1. Risk classification begins with the PCS Safeguards Screening Form, completed by the Project Proponent at the time of registration. The screening assesses:

• project type and scale,

• project location and ecosystem sensitivity,

• affected communities and land users,

• potential for pollution, degradation, or resource conflict,

• presence of Indigenous Peoples or customary landholders,

• labor and safety risks,

• governance context and corruption risk.

1. The VVB validates risk classification during the validation assessment, and the PCS Secretariat makes the final determination.

4.4 Criteria for Determining Risk Levels

1. The classification is based on a combination of:

2. Magnitude of potential impact

3. Sensitivity of the environment or community

4. Scale and duration of project activity

5. Likelihood of harm

6. Capacity of the Project Proponent to manage risks

7. Regulatory context and Host Party enforcement capacity

8. Historical or ongoing disputes in the project area

9. These criteria ensure that risk determination reflects both the nature of the project and the vulnerability of the setting.

4.5 Automatic Triggers

1. Certain conditions automatically elevate risk levels regardless of project type. These are summarized in Table 4-B.

Table 4-B: Automatic Risk Elevation Triggers

Trigger	Minimum Risk Level
Presence of Indigenous Peoples	Substantial Risk, FPIC required
Activity within or near protected areas, key biodiversity areas, or peatlands	Substantial Risk
Unresolved land tenure disputes	High Risk until resolved
Use, storage, or disposal of hazardous chemicals	Moderate or Substantial Risk, depending on volume/type
Resettlement or economic displacement	High Risk
Potential for child or forced labor in supply chain	High Risk
History of violent conflict or security issues in project area	High Risk
Activities in conflict-affected regions	High Risk
Activities that modify hydrology (dams, diversions)	Substantial Risk

1. These triggers prevent projects from understating risk and ensure that sensitive issues receive proper attention.

4.6 Implications of Each Risk Level

1. The assigned risk level determines:

• required safeguard documentation;

• minimum mitigation measures;

• monitoring intensity;

• verification scope and depth;

• eligibility for Safeguard+ labels;

• whether PCS Secretariat review is necessary;

• whether additional oversight mechanisms apply.

1. Table 4-C summarizes the required actions.

Table 4-C: Safeguard Requirements by Risk Level

Requirement	Low Risk	Moderate Risk	Substantial Risk	High Risk
Safeguards Form	Required	Required	Required	Required
ESMP	Not required	If indicated	Mandatory	Mandatory + external review
Land/FPIC Documentation	If applicable	Required if land rights present	Mandatory	Mandatory + audit
Biodiversity Assessment	Screening only	Targeted assessment	Full assessment	Independent assessment
Community Engagement	Basic engagement	Structured engagement	Formal engagement plan	FPIC and external facilitation
VVB Verification Depth	Standard	Enhanced review	Intensive site verification	Multi-stage review
PCS Secretariat Oversight	Routine	Possible review	Required review	High-level approval required

4.7 Updating Risk Classification

1. Risk level is not fixed permanently. It must be reassessed:

• during each verification cycle,

• when project design changes,

• when land tenure or community dynamics change,

• when new environmental information becomes available,

• when the geographic or operational scope expands,

• or when a safeguard incident occurs.

1. If conditions worsen, the risk level may increase, triggering additional requirements.

2. If risks are mitigated effectively, the risk level may be reduced, but only with VVB confirmation.

4.8 High-Risk Projects

1. PCS may reject or suspend projects classified as High Risk when:

• severe or irreversible harm is possible,

• rights violations cannot be mitigated,

• FPIC cannot be obtained,

• operations conflict with protected ecosystems,

• there is inadequate capacity for mitigation.

1. Projects in High Risk settings may be accepted only if they demonstrate clear and credible pathways to reduce risks to Substantial or lower before validation.

4.9 Transparency and Disclosure

1. Risk classification results are disclosed in the PCS Registry, including:

• risk tier,

• justification of classification,

• key risk factors,

• mitigation plans (non-sensitive elements only).

1. This ensures confidence among stakeholders, markets, and affected communities.

Chapter 5 - Safeguard Screening At Registration

5.1 Purpose

1. Safeguard screening is the first step in determining a project’s environmental and social risk profile. It ensures that potential impacts are identified early, that appropriate mitigation measures are integrated into project design, and that the PCS Secretariat and Verification & Validation Bodies (VVBs) have a clear understanding of the project’s safeguard obligations before registration.

2. Screening results determine the project’s risk level, required documentation, and eligibility for registration and future Safeguard+ designation.

5.2 PCS Safeguards Screening Form

1. Every project must submit the PCS Safeguards Screening Form at registration. The form evaluates each safeguard category introduced in Chapter 3 and identifies:

• relevance of the category,

• potential severity of impacts,

• presence of sensitive groups or ecosystems,

• land and resource considerations,

• anticipated risks under project and baseline scenarios.

1. The Screening Form provides the foundation for risk classification and informs whether additional assessments or an Environmental & Social Management Plan (ESMP) are required.

5.3 Required Screening Information

1. The Project Proponent must provide detailed information in the Screening Form, including:

• project location and physical footprint,

• land tenure and ownership structure,

• affected communities and demographic information,

• environmental conditions (habitats, water resources, biodiversity),

• description of technology or activities being deployed,

• potential emissions or pollutants,

• hazardous materials involved,

• labor requirements and potential worker risks,

• stakeholder identification and engagement conducted to date.

1. This information must be presented factually and accompanied by supporting documents where applicable.

5.4 Screening Outputs and Risk Determination

1. The PCS Safeguards Screening Form produces:

• A relevance determination for each safeguard category;

• A preliminary risk score (low, moderate, substantial, high) for each category;

• A cumulative project-level risk classification based on highest-risk categories;

• A list of required follow-up actions, such as:

  • need for ESMP,

  • need for a Biodiversity Plan,

  • FPIC obligations,

  • labor management procedures,

  • grievance mechanism design.

1. The VVB validates the screening output and may revise the risk classification based on onsite findings or additional evidence.

5.5 Stakeholder and Community Engagement Requirements

1. Stakeholder engagement begins during the screening stage and is required for all projects.

2. At a minimum, the Project Proponent must demonstrate:

• early identification of affected communities and stakeholder groups;

• initial consultations or disclosure of project intent;

• mechanisms for collecting feedback;

• documentation of concerns raised;

• adjustments to the project design if issues arise.

1. Higher-risk projects require structured engagement, as outlined later in Annex B.

5.6 Land Tenure and Resource Use Screening

1. A critical component of safeguard screening involves assessing land rights and resource use.

2. The Project Proponent must:

• identify the legal or customary landowners;

• disclose any overlapping or disputed claims;

• document access rights pertinent to the project;

• identify community dependencies on land, water, or forests.

1. Any unresolved disputes automatically elevate the project to High Risk until resolved.

5.7 Screening for Indigenous Peoples

1. If Indigenous Peoples or customary landholders are present within the project area or could be affected by project activities, the project must be classified no lower than Substantial Risk. This triggers mandatory requirements:

• documentation of Indigenous status and presence;

• FPIC processes following recognized protocols (Annex C);

• culturally appropriate engagement and communication methods.

1. Screening must confirm whether Indigenous Peoples may experience direct or indirect impacts, including cultural, economic, spiritual, or territorial impacts.

5.8 Screening of Environmental Sensitivity

1. The screening must examine environmental conditions such as:

• proximity to protected or critical habitats,

• presence of endangered species,

• water bodies or wetlands,

• soil erosion risk,

• landscape fragmentation,

• pollution risks.

1. The environmental sensitivity score feeds directly into the project’s risk classification.

5.9 Screening of Labor, Safety, and Community Risks

1. Projects must screen for:

• hazardous equipment,

• safety risks to workers,

• potential community health risks,

• labor rights concerns,

• inclusion and equity issues,

• risk of discrimination or vulnerable group impacts.

1. Where risks are substantial, the ESMP must include labor management provisions and a community health and safety plan.

5.10 Safeguard Screening Deliverables

1. At registration, the Project Proponent must submit:

• the completed PCS Safeguards Screening Form;

• supporting evidence (maps, community profiles, environmental data);

• preliminary stakeholder engagement documentation;

• land tenure documentation;

• Indigenous Peoples screening (if applicable);

• initial risk classification proposal.

1. The submission must be complete and internally consistent.

5.11 VVB Validation of Screening

1. During validation, the VVB:

• reviews the screening form and evidence;

• performs document checks;

• conducts interviews or field verification;

• recalculates risk where needed;

• classifies safeguard-related non-conformities;

• provides final validation of the project’s risk tier.

1. This forms the basis for PCS Secretariat review.

5.12 PCS Secretariat Determination

1. The PCS Secretariat:

• confirms or adjusts the final risk classification;

• determines whether the project can proceed with registration;

• communicates required supplementary documentation;

• assigns additional oversight if needed.

1. Only projects deemed to be Low, Moderate, or Substantial Risk are eligible for registration.

2. High Risk projects must undergo redesign or demonstrate mitigation before proceeding.

5.13 Transparency of Screening Results

1. PCS requires disclosure of key screening information in the PCS Registry, including:

• risk classification;

• high-level summary of risks identified;

• whether FPIC or ESMP is required;

• whether enhanced monitoring will be applied.

1. No personal or confidential information is disclosed.

Chapter 6 - Safeguard Requirements During Implementation

6.1 Purpose

1. Safeguard requirements remain active throughout the entire lifespan of a PCS project. Once a project is registered, the Project Proponent is responsible for translating safeguard commitments into operational practices. The objective of this chapter is to clarify how safeguard measures are implemented, monitored, and adjusted as project conditions evolve. These requirements apply continuously until the end of the crediting period, including any renewal phases.

6.2 Integrating Safeguards Into Project Operations

1. After registration, safeguard measures must be fully incorporated into the project’s operational management system. This includes embedding mitigation actions within project procedures, assigning staff responsibilities, establishing internal controls, and ensuring that all contractors and partners observe the same environmental and social standards. Safeguards cannot exist solely on paper; they must guide day-to-day decisions and actions.

6.3 Environmental & Social Management Plan (ESMP)

1. Projects classified as Substantial Risk require an Environmental and Social Management Plan. The ESMP outlines specific mitigation actions, implementation schedules, responsible personnel, and monitoring indicators. It also sets out emergency response protocols and resources devoted to environmental and social management.

2. Moderate Risk projects may follow a simplified management plan depending on PCS Secretariat guidance.

3. Low Risk projects typically do not require a full ESMP, but they must still implement and document appropriate mitigation measures.

6.4 Minimum Safeguard Obligations for All Projects

1. Regardless of risk classification, all PCS projects must maintain baseline safeguard obligations. These include protecting the environment, preventing pollution, ensuring fair and safe labor practices, maintaining community health and safety, and respecting all legal and customary land rights. In addition, every project must operate an accessible grievance mechanism and maintain accurate records of all safeguard-related activities.

6.5 Monitoring Environmental and Social Performance

1. Safeguard monitoring must be conducted at regular intervals and documented in a structured manner. Monitoring covers environmental parameters, community interactions, worker safety, implementation of mitigation measures, and any changes in land or resource use. All monitoring data must be traceable, auditable, and preserved for verification.

2. The Monitoring Report must reflect the actual conditions observed during the monitoring period and include a clear assessment of whether safeguard requirements remain met.

6.6 Continuing Stakeholder Engagement

1. Stakeholder engagement is a continuous requirement. The Project Proponent must maintain open communication channels with affected communities, share relevant project updates, and provide opportunities for concerns to be raised and addressed. Engagement must be proportionate to risk: Low Risk projects may conduct engagement periodically, whereas Substantial Risk projects require structured and frequent interactions. Documentation of these engagements is mandatory and must be available during verification.

6.7 Indigenous Peoples and FPIC During Implementation

1. Where Indigenous Peoples are affected, the project must sustain ongoing dialogue and ensure consent remains valid when project circumstances change. Engagement must be culturally appropriate, inclusive, and well-documented. Failure to maintain FPIC constitutes a serious safeguard breach and may result in suspension of issuance or project deregistration.

6.8 Labor Conditions and Worker Safety

1. Projects must provide safe working environments, fair treatment of workers, and compliance with all applicable labor laws and international labor standards. This includes maintaining occupational safety procedures, incident reporting systems, worker training programs, and policies preventing forced or child labor. These requirements apply equally to contractors and subcontractors.

6.9 Environmental Management During Implementation

1. Projects must operate in a manner that protects ecosystems and prevents environmental harm. This includes avoiding contamination of water or soil, preventing harmful emissions or effluents, managing waste responsibly, and avoiding activities that might damage natural habitats. Monitoring results must demonstrate that environmental performance remains consistent with PCS principles.

6.10 Change Management and Corrective Action

1. If a safeguard issue arises, the Project Proponent must investigate the cause, document the findings, and implement corrective actions within a reasonable timeframe. Material issues must be disclosed in the Monitoring Report and reviewed by the VVB. The PCS Secretariat may request additional documentation or impose interim requirements depending on the severity of the issue.

6.11 Grievance Mechanism Operation

1. Each project must operate a grievance mechanism that allows individuals or communities to express concerns or seek clarification without fear of retaliation. The mechanism must be easy to access, capable of receiving anonymous submissions, and responsive within reasonable timeframes. Records of grievances and resolutions must be maintained and reviewed during verification.

6.12 Documentation and Record-Keeping

1. All safeguard-related documentation—including monitoring records, stakeholder engagement logs, grievance records, land tenure documents, and environmental data—must be maintained for the duration of the crediting period and for seven years thereafter. Records must be complete, organized, and available for independent verification at any time.

6.13 Reporting Requirements

1. Safeguard reporting forms an integral part of the PCS Monitoring Report. The Monitoring Report must describe all safeguard actions taken during the monitoring period, any non-compliance identified, resolutions implemented, results of stakeholder engagement, updates to mitigation measures, and any changes in risk level. The VVB evaluates the adequacy of this reporting as part of verification.

6.14 PCS Secretariat Oversight

1. The PCS Secretariat conducts oversight throughout project implementation. This may include requesting clarifications, reviewing safeguard performance, conducting thematic audits, or applying additional requirements where justified. The Secretariat may suspend issuance if safeguard performance is insufficient or non-compliant.

Chapter 7 - Safeguards During Validation & Verification

7.1 Purpose

1. Validation and verification ensure that a project’s environmental and social safeguards are not only well-designed but also implemented effectively. Validation confirms the adequacy of safeguard planning before the project is registered, while verification assesses whether safeguard obligations are being fulfilled during each monitoring period. This chapter defines how VVBs evaluate safeguard compliance and how PCS oversees the assurance process.

7.2 Role of Validation in Safeguard Assurance

1. During validation, the Verification & Validation Body (VVB) examines all safeguard-related evidence submitted by the Project Proponent. The purpose is to determine whether:

• the safeguard screening was conducted properly,

• the risk classification is appropriate,

• mitigation measures are adequate and proportional to risk,

• stakeholder engagement has begun with integrity and inclusiveness,

• FPIC has been initiated where Indigenous Peoples may be affected,

• land tenure documentation is sufficient,

• proposed monitoring arrangements are adequate to track safeguard performance.

1. Validation provides the first independent assessment of the project’s safeguard readiness and informs the PCS Secretariat’s registration decision.

7.3 Key Elements Evaluated During Validation

1. The VVB evaluates several dimensions of safeguard planning. These are summarized in Table 7-A.

Table 7-A: Core Safeguard Elements Evaluated During Validation

Element	Description
Risk Classification	Confirmation that risk level is correct and justified.
Mitigation Measures	Assessment of whether planned measures address identified risks.
ESMP (if required)	Review of the Environmental & Social Management Plan’s completeness and feasibility.
Land & Resource Rights	Verification of tenure documentation and absence of unresolved disputes.
Indigenous Peoples / FPIC	Review of initial FPIC steps where applicable.
Stakeholder Engagement	Assessment of early engagement and disclosure practices.
Labor Provisions	Review of worker protection measures and policies.
Environmental Context	Confirmation that environmental data, maps, and assessments are accurate.
Monitoring Plan	Assessment of safeguard monitoring indicators and data systems.

1. This table serves as a high-level evaluation guide; VVBs must apply professional judgment and sector expertise.

7.4 Verification of Safeguards During Monitoring Periods

1. Verification is conducted at each monitoring interval and evaluates whether the project is meeting its safeguard obligations in practice. The VVB examines:

• operational implementation of mitigation measures,

• results of environmental and social monitoring,

• adherence to ESMP commitments,

• stakeholder engagement and grievance records,

• labor and safety practices,

• land or community impacts arising during implementation,

• changes in project activities or local context,

• any complaints or incidents reported to PCS or regulators.

1. Verification ensures that safeguards remain effective throughout project operation rather than only at the design stage.

7.5 Evidence and Site Visits

1. The VVB must examine both documentary and field-level evidence. This may include:

• site inspections,

• interviews with project management,

• interviews with affected community members,

• discussions with Indigenous representatives (if applicable),

• review of environmental monitoring stations or field measurements,

• direct observation of working conditions,

• verification of grievance mechanism functionality.

1. Where risks are substantial, the VVB may need to perform expanded site visits or additional interviews beyond standard sampling.

7.6 Treatment of Changes and New Risks

1. The VVB must evaluate whether any changes since the previous monitoring period affect safeguard obligations. These may include:

• expansion of project boundaries,

• introduction of new technology,

• shifts in land-use conditions,

• demographic changes in local communities,

• new environmental information,

• emerging grievances or disputes.

1. If new risks arise, the VVB must assess whether mitigation measures remain adequate or whether the ESMP requires revision.

7.7 Non-Conformities Related to Safeguards

1. Safeguard-related non-conformities identified during validation or verification must be classified into two types: minor or material.

• A minor non-conformity is a deviation that does not compromise environmental or social integrity and can be corrected within a reasonable timeframe.

• A material non-conformity represents a significant safeguard failure, potentially causing harm, violating rights, or undermining environmental integrity.

1. Projects with material non-conformities may be subject to immediate suspension of issuance until the issues are resolved.

7.8 Corrective Action and Follow-Up

1. When non-conformities are identified, the VVB must ensure that corrective actions are clearly described, time-bound, and feasible. The Project Proponent must implement corrective actions without delay and demonstrate resolution through documentation or follow-up verification.

2. If corrective measures are insufficient, the VVB must notify the PCS Secretariat, which may impose additional requirements or conduct an independent safeguard review.

7.9 Role of the PCS Secretariat in Oversight

1. The PCS Secretariat retains authority to review safeguard findings from VVBs, particularly when:

• a project is classified as Substantial Risk,

• FPIC is required,

• community grievances have escalated,

• environmental impacts appear significant,

• VVB findings are inconsistent with documented evidence.

1. PCS may request additional information, conduct its own inquiries, or require enhanced verification measures.

7.10 Transparency of Safeguard Verification Results

1. Key safeguard findings must be reflected in the PCS Registry, including:

• the project’s current safeguard risk level,

• confirmation of compliance or identification of issues,

• updates to FPIC status where relevant,

• major corrective actions implemented.

1. Sensitive personal or community information is not disclosed.

7.11 Eligibility for Safeguard+ Designation

1. During verification, the VVB also assesses whether the project qualifies for PCS Safeguard+ (Environmental) or PCS Safeguard+ (Social). This determination requires:

• clear demonstration of superior environmental or social performance,

• verification that all mitigation measures exceed minimum expectations,

• evidence of measurable benefits to ecosystems or communities,

• absence of any moderate or higher-risk findings.

1. The PCS Secretariat makes the final designation decision, informed by VVB recommendations.

7.12 Continuous Compliance

1. Safeguards must be upheld throughout the crediting period. Verification serves not only to ensure compliance but also to identify emerging risks and maintain the integrity of PCS-issued credits.

2. Projects that fail to maintain safeguard performance may be subject to additional oversight, corrective actions, or issuance suspension.

Chapter 8 - PCS Safeguard Labels

8.1 Purpose

1. The PCS Safeguard Label System provides a structured way to recognize projects that meet or exceed the minimum environmental and social safeguards required under the Planetary Carbon Standard. While compliance with safeguard requirements is mandatory for all projects, some projects demonstrate a significantly higher level of environmental or social performance.

2. The PCS Safeguard Labels distinguish such projects by identifying those that adopt stronger protections, demonstrate best practices, or deliver measurable co-benefits. These labels enhance transparency, provide market differentiation, and strengthen buyer confidence by signalling exceptional integrity.

8.2 Structure of the PCS Safeguard Labels

1. PCS implements a three-part safeguard recognition system consisting of:

• PCS Safeguard Compliant (PSC)

• PCS Safeguard+ (Environmental)

• PCS Safeguard+ (Social)

1. Projects that achieve both Safeguard+ designations become eligible for the PCS SDG+ Label under the PCS Sustainability & SDG Standard. This system connects safeguard quality with sustainable development performance in a coherent manner.

8.3 PCS Safeguard Compliant (PSC)

1. PSC is the baseline designation awarded to every project that successfully passes all safeguard requirements.

2. A PSC designation confirms that a project:

• has completed the safeguard screening process,

• has been assigned a risk classification no higher than Substantial,

• has demonstrated adequate mitigation of environmental and social risks,

• has no outstanding material non-conformities,

• has been validated by a VVB and approved by the PCS Secretariat.

1. The PSC label is required for registration and issuance. Projects may lose PSC status if they fail to maintain safeguard compliance during implementation or verification.

8.4 PCS Safeguard+ (Environmental)

1. The Safeguard+ (Environmental) designation recognizes projects that achieve a level of environmental stewardship significantly beyond what is required for compliance.

2. To qualify, a project must demonstrate that it not only prevents harm but also delivers measurable environmental enhancement or protection. Projects typically exhibit characteristics such as:

• demonstrable improvement in ecosystem integrity or biodiversity,

• enhanced water or soil conservation outcomes,

• reduced pollution beyond regulatory requirements,

• protection or restoration of natural habitats,

• adoption of best-in-class environmental management practices.

1. Safeguard+ (Environmental) requires that the VVB verify environmental evidence and confirm that no moderate or substantial non-conformities were observed during the monitoring period. The PCS Secretariat makes the final determination.

8.5 PCS Safeguard+ (Social)

1. The Safeguard+ (Social) designation recognizes projects that achieve exceptional social performance beyond basic safeguard compliance.

2. Projects that receive this designation demonstrate meaningful and measurable benefits to communities and uphold the highest social integrity standards.

Examples of performance that commonly support this designation include:

• significant improvements in community health or well-being,

• demonstrated equity and inclusion outcomes,

• proactive engagement with vulnerable groups,

• strong community co-design or benefit-sharing practices,

• above-standard labor protections or worker development programs.

1. The VVB must confirm that the project’s social performance exceeds minimum requirements and that no unresolved safeguard concerns exist. Final approval of the designation rests with the PCS Secretariat.

8.6 Relationship Between Safeguard Labels and SDG Labelling

1. Safeguard labels are distinct from SDG labels. Safeguards prevent harm; SDGs measure positive contribution.

2. A project may hold:

• PSC only,

• PSC + Safeguard+ (Environmental),

• PSC + Safeguard+ (Social), or

• PSC + both Safeguard+ labels, which qualifies the project for assessment under the PCS SDG+ Label system.

1. The SDG+ Label therefore requires both Safeguard+ distinctions as a prerequisite. This ensures that only projects demonstrating exceptional environmental and social performance may claim the highest development impact recognition under PCS.

8.7 Award Process for Safeguard Labels

1. Safeguard labels are awarded based on:

2. VVB recommendation derived from verification findings,

3. evaluation of evidence demonstrating performance beyond compliance,

4. PCS Secretariat review and approval, which may include supplemental checks or thematic audits.

5. Safeguard+ labels are valid for the monitoring period in which they were awarded. They may be reassessed and renewed during each subsequent verification cycle.

8.8 Conditions for Loss or Suspension of a Safeguard Label

1. A Safeguard+ designation may be suspended or revoked if:

• monitoring reveals deterioration in environmental or social performance,

• new risks emerge that are not mitigated effectively,

• a grievance reveals unresolved harm,

• a VVB identifies material non-conformities,

• FPIC obligations are not maintained,

• or the PCS Secretariat determines that integrity has been compromised.

1. Loss of a Safeguard+ label does not remove PSC status. However, loss of PSC status automatically disqualifies a project from any Safeguard+ or SDG+ designation.

8.9 Transparency of Safeguard Labels

1. Safeguard labels must be publicly visible on the PCS Registry. Public display includes:

• the current safeguard status (PSC, Environmental+, Social+),

• the monitoring period for which the label applies,

• a short description of the verified performance,

• any PCS Secretariat notes regarding the award decision.

1. This transparency ensures market confidence and creates clear differentiation between projects with exceptional safeguard performance and those with standard compliance.

Chapter 9 - Non-Compliance & Corrective Action

9.1 Purpose

1. This chapter establishes the procedures for identifying, classifying, and addressing safeguard non-compliance during the entire PCS project cycle. While the safeguard system is designed to prevent harm, non-compliance may still arise due to operational errors, environmental events, social dynamics, or changes in project conditions. PCS therefore maintains a structured approach to remedial action, ensuring that deviations are corrected promptly and that risks are managed effectively. The objective is not punitive, but rather to protect affected stakeholders, uphold environmental integrity, and preserve the credibility of issued PCS Carbon Credits (PCCs).

9.2 Identification of Safeguard Non-Compliance

1. Non-compliance may be identified by:

• the Project Proponent’s internal monitoring,

• independent verification by a VVB,

• complaints submitted through the project’s grievance mechanism,

• concerns raised by affected communities or Indigenous Peoples,

• host party authorities,

• PCS Secretariat oversight or audits.

1. Any party with credible information has the right to alert PCS of potential safeguard violations.

2. The Project Proponent is expected to maintain transparency and promptly disclose any issues that may affect safeguard performance.

9.3 Classification of Non-Compliance

1. PCS distinguishes between minor non-compliance and material non-compliance. This classification determines the timeline for corrective actions and whether issuance may proceed.

2. The classification structure is shown in Table 9-A.

Table 9-A: Classification of Safeguard Non-Compliance

Type of Non-Compliance	Description	Implications
Minor	A deviation that does not compromise environmental or social integrity, is limited in scope, and can be resolved without significant impact.	Corrective action required; issuance may continue if rectified within the verification period.
Material	A significant safeguard failure that threatens environmental integrity, community well-being, land rights, labor conditions, or FPIC compliance.	Issuance is suspended until the issue is resolved; PCS may impose oversight or sanctions.

1. Material non-compliance may also trigger broader review of the project’s risk classification or eligibility for Safeguard+ labels.

9.4 Required Actions Following Non-Compliance

1. Once non-compliance is identified, the Project Proponent must follow a clearly defined corrective-action process. A corrective-action plan must be developed, addressing:

• the nature of the issue,

• root cause analysis,

• actions required to resolve the issue,

• individuals or institutions responsible for implementation,

• timeline for completion,

• monitoring indicators for confirming resolution.

1. VVBs evaluate these corrective measures during verification and determine whether the issue has been adequately resolved.

9.5 Suspension of Issuance

1. PCS may suspend the issuance of credits if a material safeguard non-compliance is identified. Suspension applies in the following situations:

• ongoing risk of harm to communities or ecosystems,

• unresolved land or resource-rights conflicts,

• failure to maintain FPIC where required,

• significant labor or safety violations,

• documented community opposition,

• credible allegations of misconduct or corruption,

• environmental damage such as habitat loss, pollution, or degradation.

1. Suspension remains in effect until all corrective actions have been validated by the VVB and approved by the PCS Secretariat.

9.6 Conditions for Reinstatement

1. Issuance may resume when:

2. the VVB confirms that all corrective actions have been fully implemented;

3. new monitoring data or independent assessments demonstrate that the issue is resolved;

4. stakeholders, including Indigenous Peoples where relevant, confirm that concerns have been addressed;

5. renewed compliance is verified by PCS;

6. ongoing monitoring commitments are updated to prevent recurrence.

7. In certain cases, PCS may require temporary enhanced monitoring obligations even after reinstatement.

9.7 High-Risk or Persistent Non-Compliance

1. If a project repeatedly fails to comply with safeguard requirements, or if risks remain unmitigated after corrective action, PCS may take additional steps. These include:

• increasing the project’s risk classification,

• imposing enhanced oversight (including targeted audits),

• requiring periodic reporting directly to PCS,

• requesting independent reviews or assessments,

• requiring redesign of project components.

1. Persistent material non-compliance may result in project deregistration.

9.8 Project Deregistration

1. PCS reserves the right to deregister a project if safeguard violations are severe, irreversible, or incompatible with PCS principles.

2. Reasons for deregistration may include:

• unmitigated violations of land or resource rights,

• loss of FPIC or evidence of coercive consent,

• proven human rights violations,

• serious environmental degradation linked to project actions,

• fraudulent reporting or concealment of safeguard breaches,

• sustained refusal to implement corrective actions.

1. Deregistration is the most severe sanction and is applied only when corrective pathways are exhausted or when the risk of harm is intolerable.

2. Existing credits already issued remain valid unless issuance was based on fraudulent or manipulated safeguard information.

9.9 Interaction With PCS Safeguard Labels

1. Non-compliance affects safeguard labels as follows:

• any material non-compliance leads to the immediate removal of Safeguard+ labels;

• corrective actions may allow Safeguard+ status to be restored in future monitoring periods;

• loss of PCS Safeguard Compliant (PSC) status automatically removes eligibility for all PCS labels, including SDG+.

1. Projects must therefore maintain continuous compliance to retain these designations.

9.10 PCS Secretariat Oversight

1. The PCS Secretariat oversees the integrity of the corrective-action process. This may involve:

• reviewing evidence submitted by the Project Proponent and VVB,

• commissioning independent assessments,

• requesting additional information,

• conducting on-site or remote safeguard audits,

• imposing temporary or long-term enhanced monitoring,

• determining whether reinstatement or deregistration is warranted.

1. The Secretariat’s determinations ensure consistent application of safeguard rules across all projects and geographies.

9.11 Transparency in Non-Compliance Outcomes

1. PCS maintains a commitment to transparency. For this reason, the following information is disclosed in the PCS Registry:

• whether a project is under corrective-action review,

• whether issuance is suspended,

• changes in risk classification due to non-compliance,

• reinstatement after corrective measures,

• removal or reinstatement of Safeguard+ labels.

1. Confidential or personal information is not disclosed; transparency applies only to project-level outcomes.

9.12 Summary

1. The non-compliance and corrective-action framework established in this chapter ensures that environmental and social safeguards remain credible, enforceable, and aligned with international expectations. By applying proportionate yet robust procedures, PCS protects communities, ecosystems, and the integrity of PCS Carbon Credits.

Annex A - Risk Matrices & Thresholds

A.1 Purpose

This Annex defines the risk classification thresholds and matrices used to determine safeguard risk levels for PCS projects. It provides a consistent, transparent method for comparing different types of environmental and social risks and ensures that projects are assessed proportionately, regardless of sector or geography.

A.2 Structure of the PCS Risk Matrix

The PCS Safeguard Risk Matrix evaluates risk based on two dimensions:

1. Severity of potential impact

2. Likelihood of occurrence

These two dimensions are combined to determine the overall risk level. The matrix is not intended as a rigid algorithm but as a structured tool to support professional judgement by the Project Proponent, VVB, and PCS Secretariat.

Table A-1: PCS Safeguard Risk Matrix

Severity → Likelihood ↓	Minor Impact	Moderate Impact	Major Impact	Severe / Irreversible Impact
Rare	Low	Low	Moderate	Substantial
Possible	Low	Moderate	Substantial	High
Likely	Moderate	Substantial	High	High
Frequent / Continuous	Moderate	High	High	High

A.3 Severity Definitions

Severity is assessed using the following underlying definitions:

• Minor Impact — Effects are small in scale, temporary, reversible, and limited to the project site.

• Moderate Impact — Effects may be broader in scale or duration but can be managed through standard mitigation.

• Major Impact — Significant, long-lasting, or widespread effects requiring specialized management.

• Severe / Irreversible Impact — Permanent environmental harm, displacement, loss of rights, or violation of FPIC.

These definitions are contextual; severity must be interpreted in light of local ecological, social, and cultural conditions.

A.4 Likelihood Definitions

Likelihood considers how probable a safeguard issue is to occur:

• Rare – Highly unlikely; observed under exceptional conditions only.

• Possible – Could occur under certain conditions.

• Likely – Expected to occur at some point under foreseeable operating conditions.

• Frequent / Continuous – Occurs regularly or is inherent to the activity.

Likelihood must reflect both historical patterns and anticipated operational risks.

A.5 Determining Overall Risk Level

Once severity and likelihood are assessed, the resulting cell in Table A-1 determines the project's category:

• Low Risk – Minor impacts and low likelihood.

• Moderate Risk – Manageable impacts requiring routine mitigation.

• Substantial Risk – Significant impacts requiring structured management (ESMP).

• High Risk – Severe, widespread, irreversible impacts or rights violations.

High Risk projects generally require redesign and may be deemed ineligible for PCS registration.

A.6 Category-Specific Thresholds

Certain safeguard categories include mandatory thresholds that escalate risk regardless of matrix scoring. These thresholds prevent under-classification of projects in socially or environmentally sensitive settings.

Table A-2: Mandatory Risk Escalation Thresholds

Safeguard Category	Trigger Condition	Minimum Risk Classification
Indigenous Peoples	Presence or potential impact on their lands, resources, or culture	Substantial Risk
Land & Resource Rights	Unresolved land dispute	High Risk
Biodiversity	Activity in or near critical habitat	Substantial Risk
Labor	Evidence of child, forced, or bonded labor	High Risk
Community Safety	Potential for serious accident or health impact	Substantial Risk
Pollution	Use of hazardous chemicals or effluents	Moderate to Substantial depending on nature
Conflict Zones	Operation in conflict-affected areas	High Risk

These thresholds ensure that the risk classification remains conservative and aligned with international expectations.

A.7 Documentation Required for Risk Classification

The Project Proponent must provide sufficient factual information to support the risk classification, including:

• environmental baseline information,

• stakeholder profiles,

• land and resource-use documentation,

• social and cultural context analysis,

• preliminary mitigation measures,

• maps, satellite images, or relevant datasets.

The VVB validates this information and may adjust the risk level based on field observations or evidence inconsistencies.

A.8 Revisiting Risk Classification During the Project Cycle

Risk classification is not static. It must be reviewed at each verification period and updated when:

• new environmental data emerges,

• demographic changes affect community vulnerability,

• project operations expand or shift,

• FPIC conditions evolve,

• land disputes arise or are resolved,

• significant safeguard incidents occur,

• improved mitigation reduces overall risk.

Updated risk levels must be documented and included in Monitoring Reports and VVB assessments.

A.9 Role of PCS Secretariat

The PCS Secretariat has the authority to:

• confirm or amend the project’s risk classification,

• request further evidence,

• apply enhanced review for Substantial and High Risk projects,

• require independent experts for complex cases.

Final classification is recorded in the PCS Registry for transparency.

A.10 Summary

This Annex provides the methodological backbone for safeguard risk determination. By combining severity, likelihood, mandatory thresholds, and contextual factors, PCS ensures a consistent, globally aligned, and conservative risk assessment approach that supports environmental and social integrity at every stage of the project cycle.

Annex B - Stakeholder Engagement Requirements

B.1 Purpose

The purpose of this Annex is to define the minimum expectations for stakeholder engagement throughout the PCS project cycle. Stakeholder engagement plays a central role in ensuring transparency, building trust, mitigating risks, and enabling communities and affected groups to participate meaningfully in decisions that influence their environment, livelihoods, rights, and well-being.

PCS requires a structured, inclusive, and continuous engagement process that reflects international standards while maintaining efficiency and proportionality relative to project risk.

B.2 Stakeholder Engagement Principles

Stakeholder engagement under PCS is grounded in several key principles that guide project conduct:

• Engagement must begin early—ideally during project conception—and continue throughout implementation.

• Interactions must be inclusive, culturally appropriate, and accessible to all affected individuals, including women, youth, and vulnerable groups.

• Information disclosed to stakeholders must be accurate, complete, and understandable without technical expertise.

• Engagement must occur without coercion, manipulation, or undue influence.

• Concerns raised by stakeholders must be documented and addressed in a timely manner.

• Engagement outcomes must influence project design and safeguard planning where appropriate.

These principles ensure that engagement is substantive, not procedural.

B.3 Identification of Stakeholders

A project must identify all individuals, groups, and institutions that may be affected by or have an interest in the project. Stakeholders generally fall into three categories:

1. Directly affected communities (local residents, landholders, resource users).

2. Indirectly affected or interested parties (local organizations, civil society, traditional authorities, service providers).

3. Vulnerable or marginalized groups whose risks or needs require special attention.

Stakeholder identification should be documented thoroughly, including demographic information and socio-economic considerations relevant to engagement.

B.4 Stakeholder Engagement Plan (SEP)

Projects classified as Moderate or Substantial Risk must develop a Stakeholder Engagement Plan (SEP). Although format may vary, the SEP must describe:

• the groups or communities identified as stakeholders,

• preferred engagement channels and culturally appropriate communication methods,

• languages to be used and literacy considerations,

• how frequently engagement will occur,

• responsibilities within the project team,

• how feedback will be collected, recorded, and applied,

• how grievances will be managed and tracked.

Low Risk projects may integrate engagement expectations directly into the Project Design Document without requiring a full SEP.

B.5 Methods of Engagement

Engagement methods must match cultural contexts and project realities. Engagement may include:

• public meetings or small-group discussions,

• household-level consultations,

• workshops or information sessions,

• focus group meetings,

• interviews with community leaders or representatives,

• written or visual disclosures,

• digital communication methods, where context allows.

For Indigenous Peoples or culturally distinct groups, engagement must follow their own decision-making processes, traditional structures, and communication norms.

B.6 Information Disclosure Requirements

Stakeholders must receive timely and accessible information that allows them to understand:

• the project’s purpose and activities,

• anticipated impacts,

• safeguard measures,

• land and resource requirements,

• rights and responsibilities,

• opportunities to participate,

• mechanisms for submitting concerns or grievances.

Information must be provided in formats and languages appropriate to local literacy levels and cultural preferences.

B.7 Documentation of Engagement

The Project Proponent must document all engagement activities. Documentation includes:

• dates, locations, and summaries of meetings;

• lists of attendees (with respect for privacy);

• key issues raised;

• how concerns have been addressed;

• any commitments or decisions made by the project team;

• relevant photographs, attendance sheets, or digital records.

The documentation must be preserved for verification and included in Monitoring Reports.

B.8 Adjusting Engagement Based on Risk Classification

Engagement intensity depends on project risk level. The requirements are summarized in Table B-1.

Table B-1: Engagement Requirements by Risk Level

Risk Level	Engagement Expectation
Low Risk	Periodic engagement; disclosure of basic information; opportunity for stakeholders to ask questions.
Moderate Risk	Structured engagement; clear communication plan; regular updates; early incorporation of community feedback.
Substantial Risk	Formal SEP required; recurring in-person engagement; transparent documentation; integration of outcomes into ESMP.
High Risk	Engagement alone is insufficient: project redesign or alternative implementation pathways required.

B.9 Engagement During Implementation

Engagement must continue after registration, especially when:

• project activities expand or change,

• new environmental or social information emerges,

• concerns are raised through the grievance mechanism,

• environmental or social incidents occur,

• new stakeholder groups emerge or are identified.

Engagement should reflect transparency and allow stakeholders to monitor project performance and express concerns freely.

B.10 Engagement and FPIC

Where Indigenous Peoples may be affected, engagement must follow the principles of Free, Prior and Informed Consent (FPIC). This includes:

• respect for customary decision-making structures,

• sufficient time for communities to deliberate,

• independent support where requested,

• freedom from coercion, manipulation, or pressure.

FPIC is documented separately in Annex C.

B.11 Role of the VVB

During validation and verification, the VVB assesses not only whether engagement occurred, but whether it was meaningful. This may involve:

• reviewing engagement documentation,

• speaking directly with community members,

• evaluating whether concerns were addressed,

• assessing whether engagement influenced project design or mitigation.

The VVB must report any inconsistencies, concerns, or evidence of inadequate engagement.

B.12 PCS Secretariat Oversight

The PCS Secretariat may review stakeholder engagement documentation at any time. For Substantial Risk or disputed projects, the Secretariat may:

• request independent community feedback,

• conduct direct outreach,

• require additional engagement efforts,

• mandate adjustments to the SEP,

• impose enhanced monitoring or pause issuance.

Engagement quality directly affects safeguard status, risk level, and eligibility for Safeguard+ designations.

B.13 Summary

Stakeholder engagement is a continuous, structured, and documented process that underpins safeguard integrity.

A project must demonstrate that communities are heard, respected, and meaningfully involved, and that their perspectives inform project implementation.

Where engagement is strong, safeguard risks are significantly reduced; where it is weak, risk increases and corrective action may be required.

Annex C - FPIC Protocol For Indigenous Peoples

C.1 Purpose

This Annex establishes the requirements for applying Free, Prior and Informed Consent (FPIC) where Indigenous Peoples or customary landholders may be affected by PCS projects.

FPIC is a fundamental safeguard principle and a non-negotiable requirement under PCS. Its purpose is to ensure that Indigenous communities retain control over decisions that affect their lands, resources, cultural heritage, and ways of life.

This Protocol provides a structured, rights-based framework for project proponents, Validation & Verification Bodies (VVBs), and the PCS Secretariat to assess FPIC processes objectively and consistently.

C.2 Recognition of Indigenous Peoples

For the purpose of PCS, Indigenous Peoples are identified based on internationally accepted criteria, including:

• self-identification as Indigenous or part of an Indigenous group;

• collective attachment to lands, territories, and natural resources;

• distinct cultural, social, or governance structures;

• traditional knowledge systems;

• customary land tenure arrangements.

Determination of Indigenous status does not depend solely on legal recognition. Customary, traditional, or self-recognized identities must be respected.

C.3 When FPIC is Required

FPIC is required whenever a project:

• affects Indigenous lands, territories, or resources;

• influences cultural heritage or sacred sites;

• alters access to traditional resources, forests, water, or grazing areas;

• brings workers, infrastructure, or activities into Indigenous territories;

• poses environmental or social risks to Indigenous livelihoods;

• introduces changes that could affect cultural traditions or governance systems.

Projects that may affect Indigenous Peoples are automatically classified at least as Substantial Risk and must follow this Protocol.

C.4 Key Elements of FPIC

FPIC within PCS follows four core principles:

1. Free – Consent must be given voluntarily, without coercion, pressure, manipulation, or promises of improper benefits.

2. Prior – Consent must be obtained before project approval, and before any activity begins that may affect Indigenous Peoples.

3. Informed – Communities must receive clear, accurate, and culturally appropriate information about the project, its risks, and their rights.

4. Consent – Indigenous communities must have the right to accept or decline the project or specific components, according to their own decision-making structures.

FPIC is a process, not a single document or event. Consent may be withdrawn if conditions materially change.

C.5 Cultural Appropriateness and Decision-Making

Engagement must respect Indigenous governance structures. This includes:

• traditional leadership and councils,

• community assemblies,

• clan-based or family-based decision processes,

• gender-inclusive participation where culturally appropriate,

• customary norms for deliberation and consensus-building.

The Project Proponent must not impose external structures or timelines on Indigenous decision-making.

C.6 Stages of the FPIC Process

Although FPIC is tailored to each context, it typically follows several interlinked stages. These are outlined in Table C-1 for clarity.

Table C-1: Stages of the FPIC Process

Stage	Description
1. Preliminary Engagement	The project introduces its intent, scope, and potential interactions with Indigenous lands or people. No commitments are sought at this stage.
2. Information Sharing	Indigenous communities receive comprehensive information on project activities, impacts, risks, benefits, and rights. Information must be culturally and linguistically appropriate.
3. Internal Deliberation	Indigenous communities consider the information through their own decision-making processes. This stage must not be rushed.
4. Negotiation	If communities choose, they may negotiate conditions or adjustments to project design.
5. Consent Decision	Communities reach a decision to consent, refuse consent, or request modifications.
6. Documentation and Verification	The consent process and outcome are documented and later verified by the VVB.
7. Ongoing FPIC Maintenance	FPIC must be maintained through continued engagement, particularly if project conditions change.

C.7 Information Requirements for FPIC

Information shared during FPIC must be accessible, culturally appropriate, and comprehensive. It should include:

• proposed project activities and timelines;

• expected environmental and social impacts;

• land and resource requirements;

• potential risks and uncertainties;

• mitigation measures;

• expected benefits or development opportunities;

• community rights under national law and international norms;

• safeguard and grievance mechanisms.

Technical concepts must be translated into understandable language and formats.

C.8 Withdrawal or Conditional Consent

Indigenous communities may:

• consent fully,

• consent with conditions, or

• decline consent.

Conditional consent requires negotiation and incorporation of agreed conditions into the project design or ESMP. If conditions cannot be met, consent is considered not granted.

Consent is not permanent—communities may withdraw it if:

• project activities change significantly,

• impacts exceed expectations,

• commitments are not honored,

• rights are violated.

Projects must halt relevant activities until concerns are resolved.

C.9 Documentation of the FPIC Process

Documentation must demonstrate that FPIC was achieved respecting Indigenous protocols. Records may include:

• meeting notes,

• attendance records,

• audio or video recordings when culturally appropriate,

• letters or statements from recognized Indigenous authorities,

• summaries of concerns and project responses,

• descriptions of decision-making processes.

Documentation must reflect substance, not formality. Signatures alone do not constitute adequate FPIC evidence.

C.10 VVB Responsibilities in FPIC Verification

VVBs must verify:

• the accuracy and integrity of the FPIC process,

• that Indigenous governance structures were respected,

• adequacy of information disclosure,

• absence of coercion or improper influence,

• clarity of community decisions,

• consistency between documentation and community testimony,

• ongoing engagement and FPIC maintenance during verification periods.

The VVB must consult Indigenous representatives independently, without project personnel present, when culturally appropriate.

C.11 PCS Secretariat Oversight

The PCS Secretariat conducts oversight to ensure that FPIC obligations are met and remain valid. The Secretariat may:

• request additional documentation,

• consult independent anthropologists or Indigenous experts,

• engage directly with Indigenous communities if concerns arise,

• suspend issuance where FPIC violations are alleged or confirmed,

• require redesign of project components.

Failure to maintain FPIC constitutes a material safeguard breach.

C.12 Consequences of FPIC Non-Compliance

If FPIC is not obtained for a project requiring it:

• the project cannot be registered under PCS;

• issuance of credits is suspended;

• previously issued credits may be reviewed if based on misrepresented FPIC status;

• safeguard labels (PSC, Safeguard+) are removed;

• the project may be deregistered for unresolved violations.

Respecting Indigenous rights is a foundational condition, not a discretionary element.

C.13 Summary

This Annex establishes a structured yet culturally flexible FPIC protocol that ensures Indigenous Peoples retain agency over decisions affecting their territories, resources, and livelihoods.

By adhering to this protocol, PCS projects demonstrate international best practice and uphold the rights-based approach essential to high-integrity climate action.

Annex D - Environmental & Social Monitoring Indicators

D.1 Purpose

This Annex provides the framework for monitoring environmental and social performance throughout the PCS project cycle. It defines the types of indicators that must be tracked, the expectations for data quality, and the role of these indicators in demonstrating ongoing safeguard compliance.

Monitoring indicators ensure that safeguard commitments translate into observable outcomes. They allow the Project Proponent, the VVB, and the PCS Secretariat to verify whether mitigation measures are effective and whether risks remain controlled.

D.2 General Requirements for Safeguard Monitoring

Monitoring must be consistent, proportional to risk, and integrated into the project’s operational management system. At a minimum, monitoring should:

• reflect actual project activities and impacts;

• provide timely information for decision-making;

• detect emerging risks or non-compliance;

• support transparent reporting during verification;

• remain sensitive to changes in social or environmental conditions.

Indicators must be measurable, verifiable, and appropriate to the project’s scope and risk classification.

D.3 Structure of Monitoring Indicators

PCS organizes safeguard monitoring indicators into two categories:

1. Environmental Indicators

2. Social Indicators

Each category includes a range of optional metrics, and projects select those relevant to their safeguard risk profile. Substantial Risk projects require a broader indicator set, while Low Risk projects may adopt a simplified set consistent with their impacts.

To ensure practical consistency across sectors, PCS provides suggested indicators in Tables D-1 and D-2. These indicators are illustrative; methodologies or project-specific ESMPs may specify additional or alternative indicators.

D.4 Environmental Monitoring Indicators

Environmental monitoring assesses whether the project is avoiding environmental harm and maintaining ecological integrity. Indicators may relate to land, water, biodiversity, pollution control, and resource management. The aim is to detect deviations early and enable timely corrective action.

Table D-1: Example Environmental Indicators

Environmental Theme	Typical Indicators	Monitoring Focus
Land & Soil	Evidence of erosion, soil quality parameters, land disturbance footprint	Avoiding degradation and erosion; maintaining land stability
Water Resources	Water use volumes, quality parameters, effluent characteristics	Preventing contamination, overuse, or hydrological disruption
Biodiversity	Changes in habitat condition, presence of key species, signs of disturbance	Ensuring project does not impact ecosystems or critical habitats
Pollution & Waste	Air quality readings, waste disposal practices, hazardous material records	Compliance with pollution prevention and waste management standards
Ecosystem Integrity	Vegetation health, replanting success, habitat connectivity	Long-term ecological resilience

Environmental monitoring should combine observational methods, technical measurements, and supporting documentation such as photos, maps, and sampling results.

D.5 Social Monitoring Indicators

Social monitoring captures whether project activities are affecting communities positively or negatively, whether commitments to rights and well-being are upheld, and whether stakeholder engagement remains effective.

Monitoring focuses on community safety, land and resource access, labor conditions, and the functioning of grievance redress systems.

Table D-2: Example Social Indicators

Social Theme	Typical Indicators	Monitoring Focus
Land & Resource Rights	Community access to land or resources, new disputes, tenure changes	Ensuring no displacement or loss of customary/resource rights
Community Health & Safety	Incidents, accidents, public health concerns, equipment safety	Maintaining safe environments for communities
Labor & Working Conditions	Incidents, training records, worker turnover, complaints	Ensuring compliance with labor standards and worker protection
Engagement & FPIC	Meeting frequency, participation records, feedback themes	Maintaining ongoing communication and consent where applicable
Grievance Mechanism	Number of grievances, resolution times, unresolved concerns	Ensuring a functioning, trusted, and accessible mechanism

Social monitoring must be sensitive to the needs of women, youth, Indigenous Peoples, and vulnerable groups.

D.6 Monitoring Frequency

Monitoring frequency depends on project risk classification:

• Low Risk: Annually or as appropriate to the scale of the project.

• Moderate Risk: Semi-annual monitoring may be necessary.

• Substantial Risk: Regular monitoring must occur quarterly or according to the ESMP.

Higher-risk environmental or social issues may require more frequent checks.

D.7 Data Quality and Verification

Monitoring data must meet standards of credibility, accuracy, and traceability. Data sources may include:

• direct field measurements,

• sensor or digital monitoring tools,

• community meetings or interviews,

• environmental sampling,

• geospatial or photographic evidence,

• administrative records.

Data must be stored securely with clear provenance. Digital data systems must comply with the PCS Digital Monitoring Requirements (Annex F of the Project Standard).

D.8 Integration With Monitoring Reports

All monitoring indicators must be summarized in the PCS Monitoring Report (MR). The MR must describe:

• indicators tracked during the period,

• observed results,

• deviations from expected conditions,

• stakeholder feedback,

• incidents or grievances,

• implemented corrective actions,

• any changes in risk classification.

The VVB evaluates these results as part of verification.

D.9 Adaptive Management Based on Monitoring Results

Monitoring results should inform adjustments to mitigation measures, operational practices, or stakeholder engagement. If indicators reveal emerging risks or declining performance, the Project Proponent must:

• identify underlying causes,

• adjust safeguard measures,

• engage with stakeholders where relevant,

• update ESMP components,

• notify the PCS Secretariat for Substantial Risk issues.

Adaptive management is essential to maintaining long-term safeguard compliance.

D.10 Oversight by PCS Secretariat

The PCS Secretariat may review monitoring indicators during routine oversight or themed audits. The Secretariat may require:

• enhanced monitoring for sensitive issues,

• third-party or independent reviews (particularly in Indigenous contexts),

• revised ESMPs,

• temporary suspension of issuance if monitoring shows unresolved or serious risks.

Monitoring performance directly affects eligibility for Safeguard+ distinctions.

D.11 Summary

This Annex sets the framework for monitoring environmental and social safeguards with practical, measurable, and verifiable indicators. By embedding these indicators into routine monitoring and reporting, PCS ensures that safeguards remain active, transparent, and effective throughout the project cycle.