South Pole’s CEO Renat Heuberger plays “fast and loose with the truth” about the Kariba REDD+ Project in Zimbabwe

Follow the Money's analysis of Heuberger's recent interview with Argos

A recent investigative report by Follow the Money revealed that South Pole, the world’s largest carbon trader, had massively inflated the number of offsets generated by the Kariba REDD+ Project in Zimbabwe.

In an interview with Argos, South Pole’s CEO Renat Heuberger dismissed Follow the Money’s investigation as “false information”. In a new article Follow the Money’s journalists Ties Gijzel and Bart Crezee take a close look at what Heuberger said in the interview.

The Kariba REDD+ Project is by far South Pole’s largest project. Companies buying offsets from the project include TotalEnergies, Volkswagen, Delta Airlines, Ernst & Young, McKinsey, Gucci, Lidl, and Dutch energy company Greenchoice.

But according to South Pole’s own analysis more than 60% of the carbon offsets from the project only existed on paper. That’s 27 million tonnes of CO₂. South Pole’s management has known about this since June 2022, but the company continued selling offsets from the project.

Instead of taking the criticism seriously, Gijzel and Crezee write that in the interview with Argos, “Heuberger went on the counterattack, doubling down on his claims.”

The Argos radio broadcast is available here (in Dutch), and Heuberger’s complete one-hour-long interview with Argos editor Huub Jaspers is available here (in German).

Heuberger told Argos that, “Much of what Follow the Money has written has been taken extremely out of context, while some of it – there’s no other way to put it – is simply lies.”

Heuberger described the Kariba project as “one of the most successful forest conservation projects in the world”. About the Follow the Money investigation he said,

“We are surprised and disappointed that such strongly concentrated false information can be published in this day and age. It’s not primarily about us. The real problem is that these false accusations undercut forest conservation.”

Gijzel and Crezee highlight five claims Heuberger makes in the interview that reveal that “he often plays fast and loose with the truth”.

1. Not just one critical employee

   Heuberger claims that Follow the Money’s article is based on information from just one employee who was sacked in December 2022. “He took revenge by intentionally spreading disinformation to the media,” Heuberger says.

   The reality is that Follow the Money spoke to several sources. It consulted internal South Pole documents. It obtained a recording of an internal crisis meeting. “The dissatisfaction and doubts regarding the Kariba project are widespread among staff, and cannot be ascribed to a lone disgruntled employee,” Gijzel and Crezee write.

2. South Pole sold overvalued carbon credits

   “Twelve years ago, we did predict that we would be able to offset 40 million tonnes of CO₂,” Heuberger tells Argos. “Since we only sold 23 million CO₂ tonnes, nothing has gone wrong at all. Compare it to a farm: if you thought you would be able to produce 40 million tonnes of rice twelve years ago, and in fact only end up selling 23 million tonnes, there’s nothing special about that. That’s quite usual.”

   Gijzel and Crezee note that Heuberger is twisting the truth. According to South Pole, the Kariba project generated 42 million carbon credits (including a buffer).

   Gijzel and Crezee write that, “Internal calculations showed that 27 million tonnes of these were overestimated, so South Pole actually only generated 15 million tonnes of carbon credits. Despite this, it sold credits worth 23 million tonnes. This means that at least 8 million tonnes of fictitious carbon credits were sold.”

   South Pole claims that the overestimate can be adjusted in the future with new carbon offsets. But that could take ten to 15 years, according to company estimates. And it assumes deforestation will continue to be a threat, making forest conservation necessary, Gijzel and Crezee write. Also, during this period, the funding to the communities in the project area could dry up.

3. South Pole received almost 50% of the revenue from the project

   Heuberger says that South Pole gets 25% of the revenue and that “The rest goes to the project.”

   But South Pole acknowledged to Follow the Money that it received at least €18 million more than its 25% commission fee. South Pole did this by buying carbon credits cheap and reselling them years later at a much higher price - up to 20 times what the company paid for the credits.

   Internal South Pole documents show that the company took almost half of total project revenue.

   “If I buy a house from you which doubles in value in the next six years, I wouldn’t share that profit with you, would I?” Heuberger says in the interview. Or maybe it’s like buying bitcoins. “Suppose you bought bitcoins in 2012 and held on to them for seven years. Of course you’ll be making money,” Heuberger says.

   Gijzel and Crezee note that he did eventually admit that none of this extra money went to communities living in the Kariba project area.

4. Heuberger knew about the problem for months

   In their January 2023 article, Crezee and Gijzel write that, “When asked, South Pole could not clearly state how much money went to Zimbabwe. Initially, the company claimed it transferred 40 million euros to CGI – an amount Wentzel confirms. But after Follow the Money suggested to South Pole that it made more from Kariba than it disclosed to the outside world, it changed its tune, now claiming that 57 million euros went to Zimbabwe.”

   Argos asked Heuberger why South Pole shared conflicting information with Follow the Money. Heuberger replied that South Pole had not expected being asked how much money had gone to Zimbabwe and did not have the correct numbers available. “It took us completely by surprise,” Heuberger told Argos.

   “This seems highly unlikely,” Gijzel and Crezee write. “Internal South Pole documents show that the company was aware, at least since the summer of 2022, that overestimates plagued the Kariba project. South Pole even organised a crisis meeting where staff could ask critical questions, including ones about the project revenues.”

   By mid-January 2023, when Follow the Money contacted South Pole to share its findings, “the company was well aware of the problems”, Gijzel and Crezee write.

5. Heuberger cannot guarantee that he works with “serious partners” on “good projects” as he claims

   The project developer on the Kariba project is a company called Carbon Green Investments, which is registered in the tax haven of Guernsey. In July 2022, South Pole carried out a due diligence process because South Pole intended to invest in Carbon Green Investments.

   Carbon Green Investments failed the due diligence assessment, because not all expenditures could be properly checked.

   Argos asked Heuberger whether similar due diligence had been carried out at the start of the project, or during the project. Heuberger could not confirm this. In effect, there is no guarantee that the money transferred to Carbon Green Investments actually went to communities in Zimbabwe.

   “Of course I can’t guarantee that,” Heuberger told Argos. “We’re not CGI, we’re South Pole, and CGI is our partner.”

Follow the Money sent some questions to Heuberger while researching their latest piece about South Pole: “Why does he claim to be surprised by the extent of the overestimation, despite his being aware of it for months? Can he refute the information published by Follow the Money that he publicly labelled ‘false’? And is it true that the Zimbabwean community has been deprived by South Pole?”

Heuberger and South Pole did not answer the questions, instead referring to previous official responses to Follow the Money’s investigation.

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