Over the past 5 months, I’ve been interviewing carbon buyers at large companies, each with more than $1 billion revenue, about their strategies and pain points navigating the voluntary carbon market. Many of the decision-makers I’ve spoken with are also members of Trellis Network, GreenBiz’s peer membership community for sustainability leaders.
During these conversations, I always ask: What question would you most like to ask other carbon buyers navigating this market? Here are the five most common questions I hear carbon buyers asking right now:
How can I make sure our dollars will be most impactful?
There is no right answer. The right metrics for measuring impact flow from the purpose and values guiding a company’s sustainability strategy.
Almost every buyer I’ve spoken with this year wonders whether participating in the voluntary carbon market really benefits the climate, and how to measure that impact. How should we allocate limited sustainability budgets in the most effective ways in the face of our climate crisis?
It comes down to confidence: Research published by the Science-Based Targets initiative (SBTi) last fall found that the most influential factor in a carbon buyers’ decision to increase their carbon credit purchases is trust that those credits deliver tangible results.
Buyers are craving genuine discussions about what impact means and how to measure it in a complex world. While voluntary markets will never be perfect, many projects supported with carbon credit revenue influence lives, benefit complex ecosystems, and help limit climate change. Tools for evaluating carbon projects are increasingly available, but ultimately the choice of whether and how to interact with the voluntary carbon market will be based on your company’s climate strategy, values and objectives.
Should we move toward removals, rather than avoidance?
Buyers recognize that carbon removal is increasingly necessary to avoid the worst effects of the climate crisis. At the same time, reducing emissions flowing into the atmosphere in the first place remains at the heart of climate action. Guidance like the Oxford Offsetting Principles offers a blended approach that takes into account the current scale of carbon removal technologies while still supporting work to prevent as many emissions as possible from entering our atmosphere.
Carbon removals can, sometimes, be easier to quantify and track than projects that avoid or reduce greenhouse gas emissions. But carbon removal credits also tend to be more costly than those from projects that reduce or avoid emissions, and many removal technologies have yet to reach commercial scale. Meanwhile, some of the most common emission reduction project types, like forest conservation, have come under intense media scrutiny for overstating their climate benefits.
Buyers have to weigh the benefits and drawbacks of each project type and make tough decisions about how to allocate finite dollars toward their sustainability goals — or decide whether they’re even chasing the right goals. Seeking independent, expert guidance on building a carbon credit strategy won’t make those decisions easier, but it can provide assurance that your strategy is evidence-based.
How can we obtain senior-level buy-in?
Corporate climate strategy isn’t built in a day. Sustainability teams will likely see their mission evolve as executive teams and boardrooms become more climate conscious, and carbon markets more sophisticated and verifiable, in the years to come.
A survey of 187 sustainability decision-makers, conducted last fall by the We Mean Business Coalition, showed that internal opposition to purchasing carbon credits contributed to nearly half of corporate decisions to exit the voluntary carbon market, or not to engage at all.
Buyers want to more effectively discuss carbon credits with peers, C-suite executives and directors. That is a major challenge when many senior decision-makers have read negative press about carbon markets. Informed, educational discussions that acknowledge complexities can lay the groundwork for purpose-driven climate strategies with strong internal champions.
Is there a simple, reliable way to purchase carbon credits from projects in early development?
Many platforms are developing solutions to streamline offtake agreements, including Patch Offtake and Cloverly. These tools will make the process much more routine than it is today.
Companies can have ground-level climate impact when they sign long-term purchase agreements with carbon projects and climate technologies early in their life cycles that otherwise might not have gotten off the ground.
But today, few buyers undertake offtake agreements with early-stage projects, and when they do, it’s often via one-off contracts. Most buyers remain unsure of how to get started.
Platforms like Patch and Cloverly have the potential to streamline the offtake agreement process, and sustainability teams can start using them right now.
How should we talk about carbon credits once we’ve purchased them?
Buyers are struggling to communicate about their carbon credit strategies, both internally with other employees and executives, and externally with customers and investors. The best advice is to avoid generalizations and get specific about projects and verified outcomes.
But that’s easier said than done. Buyers want to celebrate their companies’ commitment to climate action and to use these moments to build employee and customer engagement. But they also have concerns about the possibility for backlash if the carbon projects they purchase from underdeliver.
And describing complex social-ecological systems to audiences with short attention spans presents its own challenges. Carbon buyers are looking to their peers for creative communications tactics. Keep it simple, underpromise and overdeliver.