Another boiler room scam? Enviro Associates’ “misleading” claims about carbon credits

Earlier this month, the BBC secretly filmed the director of UK-based company Enviro Associates making “apparently misleading” claims about the amount of money to be made by investing in carbon credits. The director, Luke Ryan, said there was “serious money” to be made.

Ryan was offering carbon credits for sale at a price of £5.50 each. He claimed that this was a discounted rate, compared to the “retail price” of £7. Ryan said that,

“In the next four to five years the market could go from anywhere from 100 to 500%. So you could be buying at £5.50 now, but in a year’s time it could be [worth] £10, £11, £12, £13.”

The BBC spoke to Edward Hanrahan, from ClimateCare who said that the credits should actually be sold for less than £1 each. ClimateCare sells carbon credits, but does not recommend buying them as an investment. A statement on the company’s website explains that,

ClimateCare provides high quality Verified Emission Reductions (VERs) to help individuals and businesses take responsibility for their carbon emissions by offsetting their carbon footprint. ClimateCare does not recommend VERs should be purchased by unsophisticated Investors as an investment.

The UK’s Financial Services Authority has put out two warnings about investing in carbon credits, although the FSA does not regulate the trade in carbon credits.

The BBC reports that it filmed Ryan explaining that “customers’ money would be held in accounts protected by the FSA”. On its website, Enviro Associates states that, “We are a clearing member of Carbon Neutral Investments Limited (CNI).”

Carbon Neutral Investments Limited was registered in the UK in May 2004. It has operated under six different names since then. On its website Carbon Neutral Investments provides a list of the companies for which it provides clearing and settlement services. One of the companies is Worldwide Commodity Partners Limited, which in common with Enviro Associates cold calls potential investors to encourage them to buy carbon credits. Carbon Neutral Investments is on the FSA register, where a note points out that the company is “Unable to hold client money.”

Carbon Neutral Investment’s company brochure (pdf file, 5 MB) certainly looks impressive. The company is working with What Car? magazine, to offset the emissions from its road tests and it’s sponsoring the What Car? Green Car awards. Carbon Neutral Investments was also involved in Vodafone Mclaren Mercedes becoming the world’s first carbon neutral Formula 1 team, including selecting projects to source carbon credits to offset the Formula 1 team’s emissions.

Another company, called AGT Investments is also involved. According to a sample “Offset Certificate and Receipt” available on Enviro Associates’ website, “All of our carbon credits are of the Verified Carbon Standard (VCS) and have already been purchased by AGT Investments Limited.”

All three companies, Enviro Associates, Carbon Neutral Investments and AGT Investments share the same office address in London. They also share the same director: Paul Seakens.

Unfortunately, Paul Seakens did not respond to my questions about the three companies, sent last week. Of course, I look forward to posting his response on REDD-Monitor, if he does reply.

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UPDATE – 10 December 2012: Seakens replied on 6 December 2012. His response is posted here.

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From: Chris Lang
Date: 20 November 2012 19:32
Subject: Carbon Neutral Investments – some questions from REDD-Monitor
To: Paul Seakens

Dear Paul,

Greetings from Jakarta! My name is Chris Lang and I run a website called REDD-Monitor. I recently came across your company Carbon Neutral Investments Ltd. and would be grateful if you could answer the following questions about the company for an upcoming post on REDD-Monitor:

1. Please describe briefly what your company does and how many people are employed there.

2. I understand that CNI provides clearing and settlement services for companies selling over the counter carbon credits. Please explain what these services involve and why such a service is necessary.

3. One of the companies on CNI’s list of companies for which CNI provides clearing and settlement services is Enviro Associates. You are a director of Enviro Associates and of CNI. You are also a director of AGT Investments Ltd., the company that buys Enviro Associates’ carbon credits. Isn’t there a conflict of interest here?

4. CNI is on the Financial Services Authority register. The register for CNI includes a Notice that states: “Unable to hold client money.” Could you please explain what this means and how CNI provides financial services without holding client money.

5. According to Enviro Associates, AGT Investments Ltd. buys only VCS certified carbon credits. But what proof does CNI (or AGT Investments Ltd. or Enviro Associates) give to people who buy the carbon credits to show that this is in fact true?

6. Could you please explain exactly what CNI did to make Vodafone Mclaren Mercedes the world’s first carbon neutral Formula 1 team. According to CNI’s brochure, “Vodafone Mclaren Mercedes worked alongside CNI to select projects that would prove to be not only ideologically relevant to their core business, but also ethically viable.” Which projects were selected to supply the carbon credits to make Vodafone Mclaren Mercedes “carbon neutral”?

Thank you for your time and I look forward to hearing from you. Please consider your response to be on the record and please reply before 27 November 2012.

Thanks and regards, Chris Lang

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