Please describe your proposed solution.

Building on a foundation of experience in delivering funding to impact generating businesses and projects (see our Partner Organisations) across various sectors within Africa, ClimaFI is building capabilities across 5 product pillars, being:

1. Financial Services - Structuring and deploying capital to enable impact generation. Incorporating measurable impact as a value add to the existing financial services offered by our partner organisations.
2. Impact Advisory Services - Consulting businesses without the capability or capacity internally to train for, or manage the impact reporting requirements of investors.
3. Impact Data Platform - A platform where businesses can submit their impact data so it can be presented to impact investors in a consistent reporting format. Initially implemented with simple data collection requirements, making it more accessible to SMEs than existing impact reporting platforms.
4. Impact Verification - Establishment of a framework and tools that will support auditors and others validating the impact claims made by businesses generating impact. This is important for impact investors who will have varying requirements for the credibility of impact claims, to address their risk tolerance relating to impact washing.
5. Impact Monetisation - Tokenising verified impact claims and building a marketplace for organisations providing results based finance.

As part of item 4, we are seeking to establish a Trust over IP ecosystem framework where ecosystem members can agree on trust policies for using Verifiable Credentials as a process for impact verification in an open and transparent way.

Given such an ecosystem relies on parties in the impact reporting space adopting the framework developed by the governance group, we have invited other organisations to contribute to it, bringing different perspectives and requirements.

In parallel to the development of an Impact Verification framework, ClimaFI will implement a pilot whereby impact generating businesses will register claims regarding their impact outcomes and verifying parties will issue credentials validating the impact claims. Investors will be surveyed for their confidence in the impact being certified through this process and whether it meets their requirements for mitigating risk. This approach will rely on crowdsourced impact verification over the existing practice where a handful of large organisations verify impact, which is both too costly and slow for most businesses to see any value from impact monetisation.

The pilot will include the implementation of the required data structures within the ClimaFI Impact Data Platform, the integration services required to allow different users to interact with the data using their decentralised identity wallets, and a dashboard for investors to review impact claims, their corresponding evidence and the verifiable credentials used to validate the claims.

For an example of the kind of impact businesses that ClimaFI has experience working with and that would be part of an impact verification pilot, please see the recent case study of a customer-centric financing solution for solar powered mills sold by Agsol.

How does your proposed solution address the challenge and what benefits will this bring to the Cardano ecosystem?

Trust is at the heart of impact verification, with many organisations finding it difficult to properly prove their impact claims. A Trust over IP based framework that is demonstrated using technology enabled by Atala PRISM, will allow organisations that value impact verification to support their reporting or investing requirements, to develop their impact management processes around a standards based methodology.

A Trust over IP ecosystem is collaborative by nature, so establishing a working group with different stakeholders in the impact measurement and verification space, will ensure that protocols developed through an impact verification ecosystem framework address everyone's needs and provides confidence when exchanging impact verification credentials, business to business and across geographical regions.

Given the continued growth in impact investment (a GIIN 2022 report estimates the impact investing market at $1.16 trillion), largely based around SDG outcomes, this framework will help drive adoption for the tooling built around Atala PRISM and by extension the importance of the Cardano blockchain in the ToIP technology stack.

Addressing the Challenge Brief

The following outlines how our proposal addresses the list of specific requirements defined for this challenge:

• Complete the Atala PRISM Pioneer Program: While we have team members who have already participated in the Atala PRISM Pioneers Program, we do intend to have additional team members participate during the next iteration of the program.
• Complete a Governance Framework workshop: We plan to complete a Governance Framework workshop. In addition to ClimaFI team members participating in the Governance Framework workshop, representatives from the organisations contributing to the Impact Verification framework working group will also be invited to participate.
• Establish or join a Governance Framework working group at Trust over IP, or another host organization: As outlined in our proposal, a working group focused on impact verification is central to our project. We have already met with the Ecosystem Foundry Working Group at the Trust over IP Foundation to begin the onboarding process for our planned ecosystem.
• Identify stakeholders including issuers, holders, verifiers, policy makers, and their business requirements: While identifying ecosystem stakeholders and incorporating their requirements into the Impact Verification framework will be the responsibility of the framework governance group, at ClimaFI we have already begun an initial assessment based on the experience of our team and their understanding of the requirements of effective impact verification processes.
• Establish a cadence of meetings and contribution and convene a home for parties to adopt and participate in the Ecosystem and Ecosystem Governance: As specified in the project budget below, we propose to finance the first 6 months of the Impact Verification framework working group, with each participating organisation contributing the equivalent of 2 or more days per month. The specifics regarding meeting frequency and contribution timeframes will be determined during the initial meetings of the group.
• Progress towards publishing a Governance Framework: One of the primary goals and deliverables described in this proposal is the development of a governance framework to support an Impact Verification ecosystem. This proposal aims to fund the first 6 months of this development, with future work being driven by the pilot outcomes and the value ecosystem members see in continuing the framework development.
• Develop a Proof of Concept, Pilot, or commercial launch: This proposal describes what will be included in the impact verification pilot that will work with existing ClimaFI clients to report and verify their impact claims.

How do you intend to measure the success of your project?

There are three primary KPIs that will be measured to determine the success of this project:

1. The framework documentation and its progress via the working group’s meeting minutes.
2. User experience for impact generators (businesses) issuing claims and verifiers validating impact claims.
3. Impact investor feedback on the trust profile for the impact certifications issued against impact claims.

Please describe your plans to share the outputs and results of your project?

<u>Impact Verification Framework</u>

The ToIP ecosystem framework, developed to support impact verification, will be open source and accessible to anyone. The framework documents and the minutes from the governance working group will be published through the ToIP Foundation’s site, so anyone can track the progress of work being undertaken.

<u>ClimaFI Impact Verification Pilot</u>

Pilot Data

Subject to legal advice and data publication approvals, the results of the impact verification pilot to be carried out through the ClimaFI Impact Data Platform will be made available for anyone in the Catalyst community to review. This will include:

1. The impact claims submitted by the pilot businesses.
2. The certifications issued by impact verifiers against those claims.
3. The feedback collected from impact investors about the degree of confidence they place on the impact claims with the associated verification certificates.

The first two items will be accessible via a public portal on the ClimaFI Impact Data Platform, whereas the investor feedback will be presented in a pilot outcomes report.

Project Reports

Project status reports on the progress of the pilot will be prepared and published monthly via the ClimaFI website and shared via social media. A project closeout report will be published, which will include feedback collected from pilot participants (impact generating businesses, verifiers and investors) that can be used as lessons learned by the Impact Verification working group for further development/iteration of the framework.

Social Media

We will engage with content creators to request the opportunity to provide project updates through their platforms, such as YouTube, Twitter Spaces, etc. We also plan to prepare walkthrough videos demonstrating the Impact Data Platform and its use in submitting and verifying impact claims. These will be published via our own website and social media channels.

What is your capability to deliver your project with high levels of trust and accountability?

<u>Impact Verification Framework</u>

Currently the following organisations have indicated they would be interested in contributing to an Impact Verification framework and therefore participate in the working group.

ClimaFI

See the solution description above for an overview of ClimaFI, and applicant profiles under the pilot section below. More information about ClimaFI is available at <https://climafi.earth>.

ixo

The ixo technology stack is a set of tools and technologies designed to make it easier to measure, verify, and track the impact of activities and projects. This information can be used to make better decisions about how to allocate resources and to track the progress of organisations towards their sustainability goals.

The stack includes:

• Impact identification: The process of identifying and measuring the impact of an activity or project.
• Impact claims: Statements about the impact of an activity or project.
• Impact verification: The process of checking to make sure that impact claims are accurate.
• Impact credentialing: The process of giving digital certificates to impact claims that have been verified.
• Impact tokenisation: The process of converting impact claims into digital tokens.
• Sovereign Impact Identity (SSI): A system that allows people to control their own personal data.
• Alphabonds: A type of impact bond that is specifically designed to fund projects that have a measurable impact.
• Digital assets to represent real-world devices that create impact: A system of digital assets that can be used to track and trade the impact of real-world devices.

More information about ixo is available at <https://ixo.world>.

Sustainable ADA

Sustainable ADA is a social enterprise, founded by Cole Bartlett and Razali Samsudin. Connecting the dots between Cardano, Blockchains, and Sustainable Development.

We recently published “Recalibrating Value, Identity, and Impact Through The Blockchain – Cardano Impact Report”.

“In an era where our world faces pressing challenges ranging from environmental degradation to social inequality, the search for innovative solutions has become more critical than ever. It is within this context that the intersection of values, blockchain technology, and positive impact emerges as a promising avenue for change. If you need a “potion” of hope and inspiration through "Proof of Real-Life Projects", I invite you to enjoy the Cardano Impact Report by the amazing Sustainable ADA”.

- Dr Mihaela Ulieru, Blockchain Pioneer, President at IMPACT Institute, World Economic Forum Expert and Chief AI Alchemist at SingularityNet.

Sustainable ADA is a space where you can learn more about the transformative potential and impact of Cardano & collaborate with others to receive guidance, access to tools, and community support while integrating solutions to challenges faced by you, your business, or your community.

Our team wants to connect you to the real-life examples of how Cardano is enabling cascading disruption by change agents creating a better tomorrow, today. Sharing stories of empowering people to take action in life-changing ways that ripple in globe shifting ways for a more sustainable, peaceful, and prosperous world for all.

We clarify and demystify notions of blockchain and how it relates to Sustainability & Sustainable Development Goals (SDGs). We help to introduce blockchain technology into everyone’s lives; highlighting the sustainable advantages and positive impacts it has on communities and businesses . Our goal is to bridge people into a world where they are welcomed on their lifelong learning journey & invited into the Cardano community, ultimately enabling and empowering visitors to discover, acquire and nurture an appreciation of what blockchain is, its limitations, and its possibilities.

More information about Sustainable ADA is available at <https://sustainableada.com>.

Topl

Topl has been active at the intersection of web3 and Impact for the past five years. Its earliest work involved the development of supply chain applications for smallholder farmers designed specifically for UTxO blockchains. Working with more socially and environmentally conscious supply chains opened up new opportunities for Topl in the decarbonization space. Alongside carbon innovators such as BCarbon and Aureus Earth, the Topl team has developed carbon registries for nature-based carbon sequestration and even designed novel consensus and bridging protocols focused on increasing the decentralisation and interoperability of UTxO-based chains.

Beginning in the fall of 2022, Topl initiated a pilot program with the specific goal of exploring non-carbon impact tokenization. In collaboration with INGOs and promising social enterprises, the Topl Impact Token Pilot Program aims to establish a diverse portfolio of impact tokens to assess market demand, pricing dynamics, and data requirements associated with non-carbon impact assets. With the conclusion of the exploratory phase, the team is now entering the second phase of mapping these unique data points into a more comprehensive impact token standard. Once minted on a blockchain, impact investors and donors can access and purchase impact tokens using a Web2 front end (to be built in partnership with ClimaFI).

Impact Token Pilot Participants include:

• SDG 6: Clean Water and Sanitation → Fresh Life, Kenya
• SDG 8: Decent Work and Economic Growth → Jibu, East and Central Africa
• SDG 11: Sustainable Cities and Communities → Sanergy, Kenya
• SDG 13: Climate Action → Repeats, Europe
• SDG 14: Life Below Water → Healthy Reefs Healthy People, North and Central America
• SDG 16: Peace, Justice, and Strong Institutions → Interpeace, Global
• SDG 17: Partnership for the Goals → Realized Worth, USA

Erin Murphy is Topl's Chief Growth Officer. At Topl, she fosters ecosystem partnerships and creates alongside her team the digital infrastructures required for companies to track, transact, and tokenize their various forms of environmental and social impact so that it can ultimately be monetized as a digital asset. Erin holds an MBA and MA from the University of Pennsylvania's Wharton School and Lauder Institute, respectively, was a U.S. Fulbright Scholar to Moldova, and holds a bachelor's in global health from the University of North Carolina at Chapel Hill. Before joining the Topl team in 2021, she spent a decade in the international development sector, working in Ukraine, Moldova, Nepal, and India on projects relating to micro-enterprise development, financial inclusion, and post-conflict infrastructure.

Nick Edmonds is the Head of Developer Ecosystem at Topl, an impact-focused L0 protocol. Nick joined Topl in its early days in 2017 as the company’s first blockchain engineer. In his current role, he advocates for an accessible developer experience, specialising in smart contracts, API development, and token standard creation. Nick holds a bachelor’s degree in computer science from the University of Houston and has participated in and won several hackathons, including Odyssey 2018, and in accelerators, including Brightlands (Maastricht), Owlspark, and Red Labs.

Chris Gerogen has been active in the web3 space since 2012, having founded his first web3 startup in 2015, which went live on the Ethereum blockchain less than a year after that blockchain launched. During this time at Rice University, Chris performed research, publishing 3 peer-reviewed papers focused on emergent phenomena in complex systems and developed many models that would come to define Topl's unique approach to web3 and impact. An active speaker in web3 and impact, Chris has given invited talks on blockchain, economics, sustainability, and international development in more than 20 countries and has been involved in numerous working groups on the intersection of web3 and social impact.

Adelaine Bhattacharjee has been with Topl for 3 years, working across Topl's multiple teams, and currently serves as a Growth Associate. She graduated from Cornell University in 2022 with a B.A. in Economics and minors in French Studies and Environmental, Energy, and Resource Economics. She is passionate about the intersection of business and technology to achieve economic, social, cultural, and environmental sustainability. At Topl, Adelaine spearheads Topl's growth strategy and execution to enable innovators to #buildgood and manages Topl's Impact Token Pilot program.

More information about Topl is available at <https://topl.co>.

<u>ClimaFI Impact Verification Pilot</u>

The following applicant profiles outline our reputation and experience to be able to deliver against this project with trust and accountability.

Yaron Cohen is the founder of ClimaFI, a Regenerative Finance startup. After six months of market interactions, ClimaFI launched operations in mid 2022 following a project Catalyst funded accelerator program run by Seedstars. From 2018 to 2021 he founded and led Project Madaraka at Amiran Kenya, establishing a ground breaking impact measurement framework coupled with productivity-linked financing terms across a range of agricultural productivity solutions to over 100 farmers and agribusinesses. He founded Viktoria Ventures in 2014, which operates East Africa’s leading local angel investment network, VBAN.

Phil Lewis has been an active member of the Cardano community since 2018, including participation in Catalyst in different capacities since its inception. He is the co-founder of Empowa, an impact project that received Catalyst funding in Fund 5 and successfully delivered the outcomes in their proposal. Phil has more than 20 years of experience in enterprise IT, including large scale application development and identity management solutions.

Lucas Belenky has 13 years of experience in impact fund operations, impact measurement, reporting and verification, climate change mitigation, and transaction advisory. He is a consultant for the World Bank on climate finance and carbon markets and has co-authored papers on digital monitoring, reporting, and verification systems and applications of blockchain technologies in carbon markets.

Matt Roberts-Davies has been involved in the Africa FinTech ecosystem since 2015, contributing significantly to platforms like M-Changa and Thundafund. Matt has navigated the challenges of financial inclusion, particularly for women and youth, and managed to reach over 1.3 million users as a result. With an 8-year record in the field, he utilises strategic approaches and technologies like Web3 to enhance access to essential financial services worldwide.

In addition to the experience outlined by the applicants above, the larger ClimaFI team has a broad range of experience across finance, impact and technology development. See the Team page of our website for links to their individual backgrounds.

What are the main goals for the project and how will you validate if your approach is feasible?

The main goals of this project are:

• Goal: Bootstrap (the first 6 months) the development of an Impact Verification framework and its governance working group to begin the documentation required to support ecosystem participants in following an Impact Verification framework.

Feasibility: Feasibility for the Impact Verification framework will be established through the governance group’s consensus, which will be documented as part of the group’s meetings.

• Goal: Pilot the use of Atala PRISM based tools and integrations structured around the Impact Verification framework.

Feasibility: This will be assessed through the collection of feedback from different pilot participants, namely impact generating businesses, impact verifiers and impact investors.

Please provide a detailed breakdown of your project’s milestones and each of the main tasks or activities to reach the milestone plus the expected timeline for the delivery.

<u>Impact Verification Framework</u>

Part of the funds requested in this proposal will be used to finance the work of the ecosystem governance group in developing and publishing the ecosystem framework. Monthly meetings (6 in total) will serve as milestones against this proposal project, where minutes and updates of the framework will be presented as milestone reports.

<u>ClimaFI Impact Verification Pilot</u>

The pilot will be broken into 3 key milestones, as follows:

• Pilot Development Milestone

Tasks: Completion of the data structures, interfaces and integrations on the ClimaFI Impact Data Platform, required for impact generators (businesses) and impact verifiers to begin the process of reporting and verifying impact claims.

Delivery Timeline: 3 months from project commencement

• Pilot Testing Milestone

Tasks: Test and refinement of user interactions with the Impact Data Platform for issuing and verifying impact claims. Completion of an investor view of the impact data submitted by impact generating businesses.

Delivery Timeline: 5 months from project commencement

• Pilot Report Milestone

Tasks: Project completion following testing and iteration of the impact investor portal. A feedback report on the impact investor’s response to impact certifications and their confidence in the reliability of the validation of impact claims. Project report on the user experience of impact businesses and impact verifiers.

Delivery Timeline: 6 months from project commencement

Please describe the deliverables, outputs and intended outcomes of each milestone.

<u>Impact Verification Framework</u>

Monthly Milestones

Deliverables: Progress towards the completion of an Impact Verification framework. Development of governance processes for the working group.

Outputs: Monthly meeting minutes. Framework documentation. Governance documentation.

Outcomes: Organisations wishing to use a common Impact Verification framework can access the required documents describing the framework protocols and how they can participate in ecosystem governance if they wish to contribute.

<u>ClimaFI Impact Verification Pilot</u>

• Pilot Development Milestone

Deliverables: A web application where users can submit impact claims, verify impact claims and review impact reports, that is integrated with an Atala PRISM wallet for the use of decentralised identifiers and verifiable credentials.

Outputs: A database to record impact claims and verification certificates. APIs to support identity wallet integration and submission of data to the database. User interfaces to allow the entry of impact claims and displaying impact certificates issued by verifiers. Project status reports.

Outcomes: The ClimaFI Impact Data Platform is ready for pilot participants to use for submitting and verifying impact claims.

• Pilot Testing Milestone

Deliverables: Coordination of existing ClimaFI customers to support the successful contribution of impact claims and verifications to the pilot project.

Outputs: Data submitted to the ClimaFI Impact Data Platform. Test results and feedback. Pilot participant support. Project status reports.

Outcomes: Pilot participants have successfully submitted, verified and reviewed impact claims.

• Pilot Report Milestone

Deliverables: Feedback reporting from impact investors, pilot businesses and impact verifiers.

Outputs: Pilot outcomes report. Project closeout report.

Outcomes: Pilot results and feedback have been compiled into project reports. The Impact Verification framework working group have incorporated the pilot results into their future framework development considerations.

Please provide a detailed budget breakdown of the proposed work and resources.

This budget has been prepared based on a total of $90,000 USD, with an ADA price of $0.30.

Who is in the project team and what are their roles?

In addition to representatives from the organisations forming the framework working group, the following are the core team members for the pilot work:

Project Manager - Phil Lewis & Yaron Cohen

Impact Methodology Consultant - Lucas Belenky

Application Architect - Phil Lewis

Investor Liaison - Yaron Cohen

Crowd Outreach & Operations - Matt Roberts-Davies

How does the cost of the project represent value for money for the Cardano ecosystem?

The Cardano ecosystem has already established a reputation for developing infrastructure to support projects that deliver positive impact to the world. By formalising an Impact Verification framework and demonstrating its use through Atala PRISM, more impact projects will be drawn to Cardano as a place to build solutions.

The rates listed in the budget are below market rates for most roles engaged on short term contracts. Team members have agreed to deliver against this project at reduced rates as they are motivated by the purpose of building open source solutions that can serve the wider ecosystem and contributes towards positive social and environmental impact. The outputs envisaged could bring more organisations and individuals into Cardano, including those currently outside of web3.

Remunerating the organisations contributing to the ecosystem framework will ensure the output is delivered to an appropriate standard and will ensure the development of the framework is sustainable. Voluntary groups are often unsustainable and take longer to deliver to the required standard. Being open source, the Impact Verification framework initially funded by the Cardano ecosystem will offer ongoing value to Cardano projects building impact reporting solutions.