Bad press about one carbon credit project does not stay with that project. A new Harvard Business School working paper finds that negative media scrutiny directed at a single project is associated with lower credit issuance by other, unscrutinized projects verified by the same registry, an effect the authors call intermediary-based contagion. For buyers, developers and investors in the voluntary carbon market, the finding reframes registry choice: affiliation with a standard is not just a quality signal, it is a shared reputational exposure.
What the Study Measured
The paper, “Intermediary-Based Contagion: Examining Implications of Public Scrutiny in the Voluntary Carbon Market”, was written by Franziska Hittmair of the National University of Singapore and Michael W. Toffel of Harvard Business School, and released as HBS Working Paper 27-017 dated August 23, 2026.
The authors built a panel of 3,213 carbon credit projects listed on six registries: Verra, the American Carbon Registry, Gold Standard, the Climate Action Reserve, EcoRegistry and the Joint Crediting Mechanism. The data, sourced from AlliedOffsets, cover quarterly activity from the first quarter of 2015 through the last quarter of 2024, spanning nine sectors, 23 methodologies and 95 countries. Media coverage of the voluntary carbon market over the same ten years was collected and hand-coded to identify which projects were targeted by negative scrutiny and when.
The outcome variable is credit issuance, which the authors use as a forward-looking proxy for anticipated buyer demand: developers issue credits when they expect someone to buy them. To avoid confounding, the sample is restricted to incumbent projects that had already issued credits before the first quarter of 2023, since registries tightened their screening criteria after the wave of critical coverage that peaked around that period.
The Contagion Effect, Project by Project
The core result is that scrutiny travels along the registry link. When a project becomes the subject of negative media coverage, credit issuance falls not only at that project but at other projects affiliated with the same registry, relative to comparable projects verified by competing registries.
The mechanism the authors propose is informational. Carbon credits are credence goods: buyers cannot verify quality even after purchase, so they rely on the registry’s assurance that methodologies, monitoring and verification are sound. A scandal involving one project raises doubts about how reliable that assurance is, and the doubt extends to every other project whose claim rests on the same intermediary.
Two moderating effects sharpen the picture. First, the contagion is stronger for registry peers operating in the same product sector as the scrutinized project, the classic guilt-by-association pattern. Second, it persists, though weakened, even for peers in different sectors, which means switching sector exposure does not fully insulate a project from a registry-level reputational shock.
What Shields a Project From the Spillover
The study also identifies two mitigants, both of which work by giving buyers an alternative basis for evaluation.
Projects carrying social co-benefit claims, commitments framed around the UN Sustainable Development Goals, experience a weaker contagion effect. The authors interpret these investments as a costly signal of organizational responsibility that partially substitutes for the registry’s assurance. Projects that had obtained certification from an additional third party, beyond their registry, are likewise less affected: buyers can fall back on a second, independent evaluation when the first one comes under question.
For developers, the practical read is that layered assurance now has measurable defensive value, not just marketing value. For buyers, it suggests that co-benefits and dual certification are functioning as de facto insurance against registry-level reputational events.
Why Registry Choice Is a Due Diligence Question
The findings cut in both directions for market participants.
Buyers running portfolio-level due diligence typically screen project by project. This study implies that screening should also run registry by registry: a portfolio concentrated on one standard inherits that standard’s headline risk, even if every individual project is clean. Diversifying across registries, or overweighting projects with additional third-party certification, reduces exposure to contagion events the buyer did nothing to cause.
Developers face the mirror image. Listing on a large, liquid registry brings credibility and buyer access, but it also means sharing a reputational commons with thousands of other projects, some of which will eventually attract scrutiny. The study’s attenuation results give developers a concrete playbook: invest in documented co-benefits and secure supplementary certification before a crisis, not after.
Investors pricing project pipelines should note the outcome variable itself. If issuance is a proxy for expected demand, then contagion shows up as developers withholding supply, which means reputational shocks translate into real revenue timing risk across an entire registry’s project base.
What to Watch
Three follow-ons matter for the market. First, whether registries respond with more visible differentiation, such as public auditor scorecards or tighter pre-issuance screening, to rebuild confidence in their assurance function when a client project is attacked. Second, whether buyers formalize registry-level risk limits in procurement policies the way they already do for sector and geography. Third, whether the study’s issuance-based findings are confirmed in transaction prices, which would turn a supply-side signal into a direct valuation input for credit portfolios.
