ECOSYSTEM SERVICES MARKET CONSORTIUM

ECOSYSTEM SERVICES MARKET CONSORTIUM (ESMC) IS A NON-PROFIT, MEMBER-BASED ORGANIZATION THAT RECOGNIZES AND REWARDS FARMERS AND RANCHERS FOR THEIR ENVIRONMENTAL SERVICES TO SOCIETY. ESMC MEMBERS REPRESENT THE SPECTRUM OF THE AGRICULTURAL SECTOR SUPPLY CHAIN WITH WHOM WE ARE SCALING SUSTAINABLE AGRICULTURAL SECTOR OUTCOMES, INCLUDING INCREASED SOIL CARBON, REDUCED NET GREENHOUSE GASES, AND IMPROVED WATER QUALITY AND WATER USE CONSERVATION. WE LAUNCHED ECO-HARVEST, A VOLUNTARY, NATIONAL ECOSYSTEM SERVICES MARKET PROGRAM IN MAY 2022. (CONTINUED ON SCH O) DURING 2024, WE CONTINUED TO SUCCESSFULLY ENGAGE AGRICULTURAL VALUE CHAIN AND SUPPLY CHAIN PARTNERS IN MARKET PROGRAM INNOVATION, TESTING, AND REFINEMENT TO FURTHER BUILD OUR PROGRAM. REFINEMENTS TO PROTOCOLS, DATA COLLECTION, PROJECT DEVELOPMENT AND PARTNERSHIP ENGAGEMENT MODELS PROCEEDED, AS DID EFFORTS TO TEST AND EMBED ADVANCED TOOLS AND TECHNOLOGIES INTO OUR PLATFORM. THE RESULTS INCLUDE CONTINUED PROGRAMMATIC STREAMLINING AND ACHIEVEMENT OF CRITICAL COST-EFFICIENCIES TO ENABLE SCALED PROGRAM OPERATIONS. WITH THE GENEROUS SUPPORT OF A GRANT FROM THE FOUNDATION FOR FOOD AND AGRICULTURE (FFAR) AND FROM MANY ADDITIONAL FUNDERS, MEMBERS, AND COLLABORATORS, WE HAVE ACHIEVED CRITICAL PROGRESS SINCE LAUNCHING OUR PUBLIC PRIVATE PARTNERSHIP IN 2019 AND OUR MARKET PROGRAM IN 2022. AS OF MARCH 2025, WE HAVE 11 PROJECTS ACROSS THE US AND CANADA WITH 232,581 ACRES ENROLLED. WE CONTINUE TO WORK TOWARD SCALING THESE PROGRAMS, WITH A GOAL OF ENROLLING 445,000 ACRES BY THE END OF 2025. THE MAJORITY OF THESE ACRES WILL BE ROW CROPS, WITH A FOCUS ON CORN, SOY, WHEAT, AND COTTON. IN ADDITION, ESMC IS PILOTING PROJECTS IN GRAZING (BEEF) AND DAIRY SYSTEMS, LAUNCHING A PROTOCOL FOR WATER QUALITY OUTCOMES, AND PILOTING EDGE-OF-FIELD PROJECTS TO MAKE NARRATIVE CLAIMS FOR BIODIVERSITY BENEFITS. WE CONTINUE TO WORK TO COMPLETE A PROTOCOL FOR ABOVE AND BELOWGROUND BIODIVERSITY. ESMC HAS PARTNERED WITH NEW MODELING SERVICE PROVIDERS AND IS DEVELOPING PROTOCOLS FOR THESE SYSTEMS. ESMC CONTINUES TO EXPAND OUR WORK TO ADDRESS THE NEEDS OF ECONOMICALLY DISADVANTAGED PRODUCERS. IN 2024, WE PARTNERED WITH THE NATURE CONSERVANCY ON A PROJECT TO MAP PRODUCERS ACROSS 13 U.S. STATES. WE ARE EXPANDING THIS WORK IN 2025 TO ENCOMPASS THE ENTIRE LOWER 48 AND TO INCORPORATE CARBON SEQUESTRATION POTENTIAL AND IMPAIRED WATERWAYS. THIS WORK WILL HELP US CONNECT PRODUCERS WITH SUPPLY CHAIN PARTNERS AND WILL ALSO HELP US PRIORITIZE PROJECT DEVELOPMENT IN THOSE AREAS WITH THE BEST POTENTIAL FOR POSITIVE CARBON AND WATER OUTCOMES. ON THE BUYER FRONT, WE SUCCESSFULLY IMPLEMENTED A CO-INVESTMENT MODEL WITH TWO CORPORATE PARTNERS. A BUYER OF IMPACT UNITS CAN CLAIM A SHARE OF EMISSIONS REDUCTIONS OR REMOVALS WITH OTHER STAKEHOLDERS IN THE VALUE CHAIN; CO-CLAIMING IS A UNIQUE FEATURE OF SCOPE 3.CO-CLAIMING TRANSACTIONS ARE TRACKED ON SUSTAINCERT'S VIVID PLATFORM TO PREVENT DOUBLE-COUNTING AND TRACK APPROPRIATE VOLUME OF TRANSACTIONS. UTILIZING THIS PROGRAM AS A TEMPLATE, WE WILL LOOK TO REPLICATE THIS CO-CLAIMING MODEL WITH OTHER EXISTING AND EMERGING PROJECTS. THIS IS A POWERFUL PROGRAM OFFERING TO BOOST PROGRAM ECONOMIC FEASIBILITY AND SCALE. WE WORKED TO IMPROVE OUR PRODUCER PAYMENT MODEL BY GATHERING FEEDBACK FROM PRODUCERS AND ON-THE-GROUND PARTNERS. GIVEN THIS FEEDBACK, WE ARE MOVING TOWARD A HYBRID PRODUCER PAYMENT MODEL THAT PROVIDES UPFRONT PAYMENTS FOR PRACTICE IMPLEMENTATION AND OUTCOME PAYMENTS ONCE OUTCOMES HAVE BEEN ACHIEVED. WE LOOK FORWARD TO TESTING THIS MODEL IN PROJECTS THROUGHOUT 2025.