Carbon goes off(set)

Welcome back to the Strawman, the daily climate newsletter that’s like the gal you know who can use Excel without a mouse. You might not understand it, but you sure as hell respect it.

Today we’re looking at the world of carbon offsets and the role of data in getting us to Net Zero; turns out, these little bits and bytes might do a whole lot more than just allow us to make pretty spreadsheets.

Let’s dive in.

What’s the plan, man?

Look, we all know the issues with ESG and related acronyms - the standards are a bit of a fugazi (with companies that are definitively harming the environment getting good ratings by essentially gaming the system).

But the premise is a good one - what if we have a framework that investors can use to judge how companies behave across a set of standards. One standard that has come increasingly under scrutiny is company Net Zero plans.

Like that winter when puffer jacket trench coat hybrids were in fashion (never again please), most large companies are asked by their investors to have Net Zero plans. Without a trustworthy source of data that can be used to verify these plans, they’re just like those coats - a kinda ugly trend that might fade away.

Enter carbon credit accounting.

Getting a bad rap

And we’re not talking about Eminem post 2010.

Carbon credit accounting is pretty straightforward - companies in the space work with those producing carbon credits (those planting trees, capturing and storing carbon in any number of ways etc.), and those looking to offset their emissions and help balance the carbon books.

But as a wise man once said, show me the incentives and I’ll show you the outcomes.

Carbon credit accounting companies in the past have been compensated by sales of carbon credits (incentivising sales rather than quality data), or as a rating mechanism for carbon project developers (who then choose to go to the most friendly ratings agency).

Sounds like there’s room for someone to do something different if you ask me.

Enter, Sylvera

Coming into the arena with a huge $57m in funding is Sylvera, a London based climate intelligence company that’s aiming to be the gold standard in the space.

By positioning itself as an independent data layer for companies looking to hit Net Zero, Sylvera’s pitch is it’s leading the charge in terms of being methodical and rigorous in how you gather data and build models to benchmark carbon projects.

With a set of tests for carbon projects that are tailored for the specific type of project, they’re creating a methodical way to understand what you’re buying when you purchase these offsets.

Turns out there’s money to be made in being principled and fair - who woulda thought.

See ya tomorrow,

The Strawman