May 12, 2023

Your weekly Invert Insights are here:

• Sylvera examines the link between carbon credits and meaningful climate action 
• Rethinking the climate neutral claim: A call for a Paris-Aligned climate funding claim
• A blockchain-based carbon tracking solution
• Invert at The Harvard Climate Symposium

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Sylvera Examines the Link Between Carbon Credits and Meaningful Climate Action 

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There is widespread belief that companies use carbon credits as a means to avoid reducing corporate emissions. Sylvera, a carbon credit ratings agency, investigated this claim by conducting an analysis of data from approximately 100 major businesses across different industries such as energy, finance, aviation, technology, and others. The objective was to determine whether investments in carbon credits corresponded to slower rates of decarbonization (Click on “Read More" to look through their methodology). Their findings indicated that, on average, companies purchasing carbon credits were reducing their Scope 1 and 2 emissions by 6.2% annually whereas companies that were using no offsets were only achieving emission reductions of 3.4% per year. 

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Invert Insights:

This study demonstrates that investment in carbon credits and taking meaningful climate action are not mutually exclusive. In contrast, it suggests that companies purchasing carbon credits are actually achieving greater carbon emissions reductions annually.

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Rethinking the Climate Neutral Claim: A Call for a Paris-Aligned Climate Funding Claim

South Pole, a pioneer in promoting the concept of "climate neutral" over two decades ago, has acknowledged that the term has been misused by some companies for greenwashing purposes, leading to public debate and a call for alternatives. They are now developing a new vision for Paris-aligned corporate claims on climate action funding that aligns with the goals of the Paris Agreement and the SBTi's Corporate Net Zero Standard guidance. The new claim, termed “Funding Climate Action (with Verified Climate Contributions), requires that companies using the claim must meet three fundamental criteria: climate contributions must be independently verified and of high quality, contributions should match the scale of unabated emissions for which a company or product is responsible, and contributions must happen in addition to and never instead of emissions reductions.

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Invert Insights:

Providing credible pathways for companies to maximize their climate impact by investing in carbon reduction and removal projects outside their value chains is critical for meeting climate targets and supporting climate action today. By standardizing these claims and providing a clear definition of what they mean and how offsets can form part of the credible climate strategy, companies can address their residual emissions without fear of greenwashing claims.

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A Blockchain-Based Carbon Tracking Solution

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Global professional services firm EY has launched EY OpsChain ESG, a new blockchain-based solution designed to help companies accurately measure and monitor their carbon footprint while providing transparency and traceability for carbon credits. The platform, available in beta version on EY's Blockchain SaaS platform, tokenizes product emissions to enable enterprises to achieve and report a verifiable view of their CO2 positions. EY aims to address challenges of opacity and inconsistent data in the voluntary carbon credits sector by offering traceability and verifiability, allowing organizations to share their ESG story on a trusted digital platform.

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Invert Insights:

Tracking carbon emissions through blockchain technology has the potential to gather consistent and accurate data that will help drive corporate climate decisions while allowing corporations to share their progress among stakeholders.

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Invert at The Harvard Climate Symposium

At the Harvard Climate Symposium, during Harvard Climate Action Week, Rade Kovacevic, the Co-CEO of Invert, engaged with Harvard Business School alumni, distinguished business leaders, investors, and entrepreneurs to explore the development and scalability of climate solutions. Among the insights, Rade highlighted a notable quote from David Blood, Co-Chair of the WRI Global Board of Directors and Co-Founder and Senior Partner at Generation Investment Management: “When a company makes climate commitments, they tend to continue ratcheting up their commitments as they see positive results”. This observation emphasizes the importance of first making climate commitments and their potential to catalyze more ambitious climate action.