FAQ - Frequently Asked Questions

General Questions / Glossary

This in a social and ecological context refers to the effect or influence that actions or activities have on society and the environment. Social impact involves changes to community well-being, like improved education or health, while ecological impact relates to the environment, like reducing pollution or conserving resources. It's about the positive or negative outcomes of what we do on people and the planet.

In the context of social and ecological projects, "output" and "outcome" have specific meanings:

Output: Refers to the immediate products or services resulting from activities. For example, planting 1000 trees or conducting 50 educational workshops are outputs. They are quantifiable and easy to measure.

Outcome: Represents the longer-term effects or changes due to the outputs. In our examples, outcomes might be improved air quality from the trees or higher literacy rates from the workshops. Outcomes are about the impact and are often less immediately measurable.

In essence, outputs are what you do, while outcomes are the differences made by what you do.

The Sustainable Development Goals (SDGs) are a set of 17 global goals set by the United Nations in 2015. They aim to address global challenges like poverty, inequality, climate change, environmental degradation, peace, and justice. The SDGs are a blueprint for achieving a better and more sustainable future for all by 2030.

IRIS+ is a system for measuring, managing, and optimizing impact. It's developed by the Global Impact Investing Network (GIIN). IRIS+ provides a comprehensive set of metrics for impact investors to measure and report on the social and environmental performance of their investments. It helps ensure that impact investments are effective and transparent.

This refers to the measure of the impact that a person, organization, or product has on the environment and society.

The ecological footprint in business context represents the environmental effect, often in terms of the amount of resources required to deliver a product, service and for general business operations. It's a way to quantify the demand placed on Earth's ecosystems.

The social footprint represents the social effect, focusing on the (in general negative) effects that influences have on social systems. It might include factors like employment practices, community engagement, and the overall contribution to or detriment of societal well-being.

These footprints are useful for understanding and managing the sustainability of actions and practices.

"Insetting" and "offsetting" are two approaches to managing and balancing social and ecological footprints:

Offsetting involves compensating for one's negative environmental or social effects by supporting external projects that act against the burden on nature's resources or create positive social outcomes elsewhere. For example, a company might offset its carbon or plastic waste emissions by funding reforestation & plastic waste removal projects in a different location.

Insetting in contrast means integrating sustainability actions into the core business operations and supply chain. It's about making improvements within one's own activities or direct sphere of influence. An example is a company reducing its carbon or plastic footprint by adopting renewable energy sources or using plastic substitutes in its own operations.

As corporates often are not able to transform quickly enough to reach their insetting goals in a short timespan, offsetting can at least support external projects acting quickly on a global scale against certain footprints of the corporate's operations. Offsetting should always be accompanied by strict insetting strategies & goals that the corporate reports against regularly, with the intention to reduce the needed offsetting amount over time.

This refers to the philanthropic efforts by companies where they provide support to community projects, non-profits, or social causes. This can be in the form of donations, grants, sponsorships, or employee volunteering time. It's a way for companies to contribute positively to society and often aligns with their corporate social responsibility strategies.

Corporate gifting in that context is a specialized form of giving. It is based upon the philantrophic efforts mentioned above but goes one step further in presenting these to their customers, partners, employees or other stakeholders in form of gifts. As an example: a company decides to spend money on a certain social project based on the amount of employees in their company. This later then can be presented in various (tangible) forms towards their employees as a xmas gift.

These are credits generated from projects that reduce, avoid, or sequester carbon emissions. Entities or individuals purchase these certificates to offset their own carbon footprint. Each certificate typically represents a specific amount of metric tons of CO2 per credit reduced or sequestered. The projects generating these credits can vary widely, from reforestation to renewable energy initiatives.

Corporate Social Responsibility refers to a business model and practices where companies integrate social and environmental concerns into their business operations and interactions with stakeholders. It's about companies taking responsibility for the impact of their activities on society and the environment, often going beyond legal requirements. CSR activities can include ethical labor practices, environmental stewardship, community engagement, and sustainable development.

The Corporate Sustainability Reporting Directive is a directive by the European Union aimed at enhancing and standardizing the sustainability reporting requirements for companies. It expands on the previous Non-Financial Reporting Directive (NFRD), requiring a larger range of companies to disclose information on how they manage social and environmental challenges. The goal is to improve transparency and provide stakeholders with more consistent and comparable data on corporate sustainability.

This stands for Small and Medium-sized Enterprises. These are businesses that maintain revenues, assets, or a number of employees below certain thresholds. The exact criteria can vary by country, but generally, SMEs are characterized by their limited scale compared to larger corporations. They play a vital role in most economies, particularly in terms of job creation and innovation.

Think of a blockchain as a digital record book. Instead of keeping records in one place (like a single computer or server), the information is copied and spread across a network of computers. Each page of this record book is called a "block," and they're all linked together in a chain.

Whenever new information is added, it's put into a new block, and everyone's copy of the record book updates. This makes it really hard to change older information because you'd have to change it on every single copy at the same time.

So, blockchain is like a shared, super-secure digital diary that a bunch of people have copies of and can write in, but no one can easily change what's already been written. This is why it's used for things like digital money (crypto currencies) or for NFTs and keeping track of who owns what.

In the context of blockchain, a "token" is a type of digital unit, often used as a way to represent assets or specific rights within a blockchain network. Tokens can be created, transferred, and stored over the blockchain. They are often used to represent things like ownership, a share in an asset, access rights, or even as a currency.

For example, at LOOMPACT we use special tokens (NFTs) to represent social and environmental impacts in a tradable form. Tokens are versatile and can be tailored to various uses and ecosystems within the blockchain world.

In the context of blockchain, an "NFT" stands for Non-Fungible Token. It's a unique type of token that represents ownership of a specific, one-of-a-kind item or asset, making it different from interchangeable tokens like cryptocurrencies. NFTs can represent digital or physical assets, such as artwork, collectibles, real estate or for other use types.

in the case of LOOMPACT-based NFTs, they are unique certificates of realized social or environmental impact. Each NFT has distinct information or attributes that make it unique and verifiable on the blockchain, providing proof of ownership and origin.

Impact-related Topics

Self-assessed reported impact should be externally audited for several reasons:

Credibility: External audits validate the accuracy of the reported data, enhancing trust among stakeholders, including customers, investors, and partners.

Transparency: Auditing ensures transparency in reporting, which is crucial for building trust & for aiming to end "greenwashing".

Accountability: It holds the reporting organization accountable for its claims, ensuring that the reported social and ecological impacts are real and not exaggerated.

Compliance: Audits check for compliance with relevant standards and regulations, important for maintaining legal and ethical standards.

Improvement: External audits can provide insights and recommendations for improving impact measurement and reporting processes.

The Impact Management and Verification Standard, is a recent standard developed for assessing and verifying the impact KPI models & reports based upon these. This new audit standard emerged due to several reasons:

Need for Standardization: As impact investing grew, there was a lack of standardization in how impact was measured and reported. IMVS provides a unified framework to assess and verify outcomes, helping to standardize practices across different entities and sectors.

Preventing Greenwashing: With increased attention on eco/social reports, the risk of greenwashing (making misleading claims about environmental or social benefits) also grew. IMVS serves to authenticate impact claims, ensuring they are credible and not just marketing tactics.

Increasing Transparency and Accountability: By providing a clear and rigorous standard for impact verification, IMVS enhances transparency and accountability in impact reporting.

Facilitating Investment in Impact Assets: A clear and trusted standard like IMVS can encourage more entities to engage in impact asset trading, as validated impact models & reports build trust in the credits offered.

Building Investor Confidence: Consistent and reliable impact verification helps build investor confidence, which is crucial for attracting capital to projects and companies focused on social and environmental benefits.

Have you ever donates money to some organization? Was it easy to find out what outcomes were generated with your donation? When? Where? And who has checked if this was reported correctly?

Very often the answer is no due to the complexity of tracking that down.

LOOMPACT-based Impact Credits are NFTs that have embedded check links for exactly finding out about "who has certified the impact model & report this is based upon", "where was the outcome created and when", "who checked-in the reported data" and ultimately "who is responsible & liable for a correct reporting of the impact sold". All that is available with a single click, understandable easily for everyone on the Credit's check page.

Yes and no. CO2 credits are purely focused on making carbon negative effects tradable. With LOOMPACT's approach for Impact Credits, we are able to issue credits for our clients that cover all areas of the 17 SDGs. So, think of Plastic, Biodiversity, Education or Gender-Equality Credits . But of course Impact Credits could also be "just" usual CO2 Credits.

That differs. Mainly these are either for- or non-profit organizations or companies that dedicated their work towards making the world a better place - but also in a measurable way. They are located all around the globe, focusing on addressing one or more challenges listed in the SDGs.

Prerequisites for working with is a data-driven impact model approach and KPI-based reporting, so that there is countable outcomes. Moreover all this has to be externally audited (e.g. following the IMVS standard) and the impact that is intended to be sold has been already generated. All this together generates a very high quality basis on what the Impact Credits are built upon.

To balance out eco/social footprints just by compensating against them with offsetting credits is not a primary solution - but it helps to speed up the world's transformation towards more sustainability.

To reduce footprints along the value chain internally in the corporate must be the main goal. It is a must to have a strategic insetting plan & aims to report against regularly. But we all know, Rome wasn't built in a day and transformation of larger businesses take time.

To bridge that gap offsetting can help so accelerate that on a global scale. E.g. if my plan to get rid of using plastic in my value chain will take about 10 years, why not supporting plastic waste collection projects around the world meanwhile with buying their Impact Credits. That will at least help a bit to stop plastic pollution on the "waste end" while the corporate is working to stop the pollution on the "emitting end".

Both must go hand-in-hand: insetting as a basis, offsetting as a tool for mitigation meanwhile.

At first glance it seems so - at second, the opposite is the case. In the usual business world it would be strange to pay for a non-existing product and to just hope for getting a product for the money spent, without a chance to get the money back, if I don't get the product. But as of today, that's usual in the world of donations & impact. You spend money for a promised effect, only left with the hope that this promise will materialize in future. Think about it - it is purely strange.

Take a city's street cleaning service: it also gets paid by the ton of waste they collect. Their eco impact is a clean city and they need to prove that they collected the reported amount of waste - otherwise they don't get paid. That is "impact as a product / service" and so we should think more about such an approach on a global scale.

To balance out eco/social footprints just by compensating against them with offsetting credits is not a primary solution - but it helps to speed up the world's transformation towards more sustainablity.

To reduce footprints along the value chain internally in the corporate must be the main goal. It is a must to have a strategic insetting plan & aims to report against regularly. But we all know, Rome wasn't built in a day and transformation of larger businesses take time.

To bridge that gap offsetting can help so accelerate that on a global scale. E.g. if my plan to get rid of using plastic in my value chain will take about 10 years, why not supporting plastic waste collection projects around the world meanwhile with buying their Impact Credits. That will at least help a bit to stop platic pollution on the "waste end" while the corporate is working to stop the pollution on the "emitting end".

Both must go hand-in-hand: insetting as a basis, offsetting as a tool for mitigation meanwhile.

About Tech / NFT / Blockchain

Using a blockchain for issuing these Credits has multiple advantages:

Immutability: once the NFTs are set up with their data on the blockchain, the core data is locked in place permanently. There's no altering of records possible on the baked-in features in the token and also the track record of all transactions is permanent

Transparency: due to the nature of the transaction & wallet handling of a blockchain, every transaction can be traced by anyone publicly. That also means e.g. that everybody can see if a buyer that wants to compensate a footprint with buying Impact Credits still holds the NFTs bought (so, is still compensated) or has sold these Credits again (and therefor is not compensated anymore).

Tradability: our Credits are listed on a widely used public blockchain (Solana), which also means that no one is bound to any proprietary marketplace for selling the Credits again. Our Impact-NFTs can be sold on any secondary marketplace that supports the Solana chain (like OpenSea, MagicEden etc.).

Easy-to-use & to understand: NFTs are a kind of commodity in the blockchain world. Even for non-tech interested consumers it is easy to handle them in digital wallets and to buy, sell or transfer them. Moreover - besides the important raw data content, NFTs always contain a picture attached to them. In case of LOOMPACT Impact Credits the mostly show a visual representation of the project & outcomes that are sold in the NFT and make it easy to see the major features of the Credit.

Traceability: each and every NFT has it's own tracking link & QR-code to check all relevant information on certifications, audit results, outcomes & originators of the impact represented with that collection.

That is true & false the same way. Blockchain had it's roots in so-called "proof-of-work" (PoW) networks that needed enormous amounts of energy to solve complex mathematical problems for creating new token or to verify transactions. One of these blockchains still is the most well-known one - Bitcoin.

Since the beginnings of digital ledger technologies, that has changes dramatically: the majority of blockchains today use methods like "proof-of-stake" (PoS) and/or "proof-of-history" (PoH) that don't require to solve math puzzles anymore. LOOMPACT NFT also uses one of these PoS / PoH networks (Solana). Generally you can say: with these modern chains there's less energy needed per transaction than a Google search request in average needs (see https://solana.com/news/solana-energy-usage-report-november-2021).

Solana is a "layer 1" blockchain network that has many benefits for us in the context of issuing Impact Credits at the moment. It is a low-energy consuming chain based on "proof-of-stake" (PoS) and "proof-of-history" (PoH) mechanisms. Even all their calculated CO2 footprint is compensated fully with high quality offsetting projects. Moreover is excels with fast transaction times, low gas fees and is widely accepted on the majority of the larger NFT marketplaces out there (like OpenSea, MagicEden etc.) so that also secondary market trading is easy.

The NFTs issued with LOOMPACT's technology are independent from our infrastructure once they're minted. They are set up on a public blockchain (Solana) and due to the distributed node infrastructure these networks are at least intended to stay forever. So, as long as the underlying chain exists, your NFTs are also safe. And, fun fact - none of the many "layer 1" networks died since their start.

Buying these NFTs is as easy as buying a ticket or goods in an online shop: all you need is a credit card and your email address. After buying the desired amount, a so-called "custodial wallet" will be created at our payment provider for you based on your email address as a credential. You get all info on accessing your Impact Credits via mail and you are also later on able to transfer your NFTs to your private digital wallet (if you've got one) free of charge.

Buying Impact Credits

Basically, you buy data & an "impact claim". The organizations that created the outcomes check them in on our LOOMPACT reporting & transparency platform. If they do this, they still own the data they checked-in and they are able to sell this data later on using Impact Credits. The Credit itself so contains a part of this reported outcome and in fact also the claim, who has created the impact is transferred to the buyer.

The reported data & the underlying impact model for every NFT collection is checked externally for validity. This is a complex audit process, mostly following the IMVS standard (see the glossary section for a deeper explanation).

LOOMPACT is not the issuer of the Impact Credits - the issuer is the organization that created the impact and also they are the ones selling the NFTs. LOOMPACT is a technology and sales platform provider here. So also the proceeds of all sales benefit the impact-generating organizations directly.

Purchasing these NFTs is as simple as any online shopping; just use your credit card and email. Upon purchase, we'll create a "custodial wallet" for you through our payment provider, linked to your email. You'll receive all details about accessing your Impact Credits by email, and you can transfer your NFTs to your own digital wallet at no extra cost.

Every collection has it's own bulk request email address listed on it's shopping (minting) page. Click on that address and send us the details about how many NFTs you want to buy and ideally any invoice info if needed. That's all - we take care of the rest.

In short - yes. With most of the Credit issuers here we've got contracts for the continuous delivery of freshly realized outcomes. Besides theses we've also got a plenty more organizations that work with us but their collections are not publicly listed on our marketplace, as they are "bespoke" Credits designed for the use of one or more bulk buyers. Also these feed in to the stream of outcomes we securitize with LOOMPACT NFT. Let us know about your demand and we cater that need.

Yes, we do that. At first we need to talk about your needs and goals. After that we're actively looking for project partners that deliver the specific outcomes you need, also (if needed) in the desired region where the impact should be generated for you. Please contact us using our mentioned email addresses.

Also when it comes to special requirements on how to integrate your Impact Credits as NFTs in your internal or external reporting, we're at your side. We've done that several times - either for non-interactive reporting scenarios ("printed" reports) or for interactive presentations (compensation proofs on corporate websites). Please contact us using our mentioned email touchpoints.

Offering Impact Credits

It depends on a couple of factors: how "sturdy" is your reporting and KPI model? What kind of KPI you are going to offer? Have you already created that outcome and about what quantities we're talking? Have you already got an external audit / certification? These are just some of the questions that we need to ask you in our evaluation process. In short: reach out to us and we take a closer look if we can set up an Impact Credit placement project for you.

There is no hard "lower limit". But in general: taking into account the cost for auditing your impact model & reports and other secondary factors, a typical minimum of expected revenue per Impact Credit collection would be around 15k EUR.

You sell data in fact. And you hand over the "impact claim" to the buyer. That means, that the buyer, due to the fact that he had paid you for generating the outcomes you delivered, can claim that he/she has supported the creation of that positive eco/social effect.

A solid impact model & reporting. An external audit about the reporting and the model (ideally following the IMVS standard). There should be enough outcome already created in the past to be sellable with issuing the Credits.

No. That's exactly what we from LOOMPACT take care for you.

Selling future eco/social impacts carries uncertainty. For instance, if a newly planted tree's 30-year CO2 absorption is sold as a credit, there's no guarantee it won't be destroyed in a wildfire in 5 years. Similarly, a social project pledging to educate 1000 homeless children over 5 years may fail if the organization doesn't last or attract enough participants.

In contrast, purchasing credits for already realized impacts ensures that positive effects have been achieved. It also financially supports organizations with a track record of effectiveness, helping them expand their positive work.

Yes, we plan to do this, but in a trustworthy manner. That means - selling future outcomes is possible but the buyer at first just get's a certificate, that he/she supported you, but with a clear statement that the impact associated with that certificate is not yet created. Only after later on the realized outcomes were generated and audited, then the buyer is able to retrieve the "real" Impact Credits for his/her support. That is not available yet, but it is on the roadmap to be deployed soon.

The benefit for the buyer is: if the issuer is the outcome-creating organization, it is clear who is responsible & liable for the data sold with that Credit. On the other hand, the benefit for the issuer is, that all revenues from the sales benefit the issuer fully, as the seller also holds the wallet that receives the funds for every sale.

The cost is mainly found in two parts:

One is the audit & certification. It depends on the kind of standard you choose (we recommend IMVS - see glossary), so also the cost can vary from zero (if you already got suitable certifications at hand) to some thousands of EUR, depending on many factors of your business.

The second part is a commission on every sale for LOOMPACT. The percentage varies here, as there are projects where LOOMPACT is leading the sales process and some, where LOOM is "just" the tech platform provider and is not actively involved in selling the Credits. The other dimension for the commission's basis is the volume of the Credits sold in a collection. Of course - the commission is different selling a very small collection (e.g. 15k EUR) vs. a huge one (e.g. 4M EUR).

So in short: contact us and we find out about the cost profile of your project with us.

Even though you need already realized outcomes based on a solid impact model & data when selling it using LOOMPACT NFTs, of course you can start off by designing & "hardening" your model. We offer this as a consulting service, so please contact us.

LOOMPACT's Business Model

Even though all proceeds from selling the NFTs directly benefit the issuer, LOOMPACT later gets a commission based on the sales volume from the issuing organization. That's mainly it.

It depends on various factors, especially the complexity of KPIs in the model & reports, on the region(s) the organization is active and indirectly the size of the organization. It is not a flat fee but ranges from 5k EUR to 25k EUR in majority.

An external audit & certification of the impact KPIs sold in our Impact Credit system is necessary, as is all about trust and authenticity in the reported data. That's what the issuers sell and that's what the buyers use, when communicating about the projects they've supported by buying these Credits. Without this anchor of trust, the intrinsic value of the Credits is not proven.

We've got a very small "onboarding fee" when setting up a collection (less than 1k EUR), which mainly covers blockchain fees, costs for design work and market sounding of the intended offerings.

The first part is prior to selling the Credits: consulting about the right presentation of the KPIs to be sold, market soundings, NFT designs, help with checking in data to our reporting & transparency platform and the technical setup of course.

The second part, if wanted by the issuer is selling: depending on the found sweet spot in the market sounding phase before, we do active placements of your Credits in the B2B and/or B2C environment.

Generally our intention is, that you're able to focus on your operations in creating the impact. We take care of structuring & selling these outcomes to generate new revenue streams for the issuing organization.

Do you have any further questions?

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