Salesforce, the leading global CRM provider, is launching a carbon credit marketplace that will combine offset providers and rating agencies in an effort to reduce confusion about which offerings are legitimate.
Carbon credits are a way for companies to atone (or ‘offset’) for their produced emissions through investment in climate positive actions. Examples include tree planting, forest conservation, renewable energy installations or any other carbon capture method which will remove a measured quantity of carbon from elsewhere.
One of the greatest challenges with the carbon credit mechanism is ensuring the verifiable return of the investment and the promised offset/reduction. As highlighted by the University of Oxford, which says poor-quality nature-based offsets that haven’t been checked can have ‘limited or even negative effects’ on climate change mitigation and biodiversity and terrible effects on local communities.
Salesforce intends to solve this problem by introducing the ‘Net Zero Marketplace’. The platform, which the company claims “can play a critical role in an organisation’s comprehensive climate strategy” has been designed to increase the transparency of the carbon market and enable businesses to invest in reliable and effective projects easily.
This will be achieved by publishing a ‘first of its kind’ publicly accessible catalogue of carbon projects along with aggregated third-party ratings for them. Businesses can use this platform to easily identify which carbon credits work best for them and invest in them without uncertainty in their decision. Listings will also include their alignment with the UN Sustainable Development Goals. Companies that invest in a project will also receive updates on the projects, which could encouraging future reinvestment.
For the privalidge, Salesforce will take around a 1% fee for each transaction through the marketplace.
At launch, there will be around 90 projects available, with ratings provided by Calyx Global and Sylvera. Calyx Global’s approach looks at a project’s known risks, such as those that come with the type of project, as well as a bottom-up study of the project’s paperwork for discrepancies. Sylvera on the other hand uses machine learning technology to analyse a variety of visual data, such as satellite imagery of forests and LIDAR to determine the effectiveness of a project.
“Quality carbon projects are a powerful and necessary tool to fight climate change, but reliable data and investment is needed to unlock their full potential,” says Sam Gill, co-founder, Sylvera.
The issue of carbon offsets is a divisive one. Proponents believe the mechanism can be an effective way to channel funds from businesses to climate friendly actions, and allow companies time to work towards net zero emission goals.
However, investment into carbon credits can also lead to accusations of “greenwashing” from detractors, as businesses may be seen as merely buying their way out of the issue rather than taking active steps to reduce their emissions.
Regardless of sentiment, the growth of carbon markets has accelerated recently; with a substantial increase in carbon pricing revenue of around 40% in 2021. The market is estimated to grow to $50B by 2030 as many organisations race to achieve their net zero commitment.
“We’re at a moment in the climate emergency in which we need to put everything on the table. Carbon credits are a way to incentivize further emissions reductions by placing a price on carbon and making an impact now, while other climate efforts are also underway.” said Christiana Figueres, former Executive Secretary, UN Convention on Climate Change.
The marketplace will be available in the US in October, and internationally in 2023.
