Corporate social responsibility (CSR) is a business model designed so companies can demonstrate, through their actions, that they care about society. Maybe a quick and dirty explanation, but it works at its core. CSR was supposed to acknowledge, and act on, the interconnectivity that business has to all that it touches. But in some minds, CSR has managed to ring hollow. Now that people are being smacked in the face with the impacts of climate change… all the sudden, CSR is really starting to matter.

Here’s a little math… recently published statistics tell us that 94% of Gen-Z want companies addressing social and environmental issues, 76% of all consumers are saying they won’t buy at all from a brand that conflicts with the issues they support, 90% would switch products due to a lack of corporate responsibility, 88% want to know about CSR efforts, and 84% would share that information with their network. There are numbers like these for days.

We bring up CSR because it goes hand in hand with efforts to tackle climate change, and one form that takes is the voluntary carbon market (VCM). The voluntary carbon market allows companies unable to reduce their own emissions to offset those emissions by purchasing carbon offsets from verified suppliers. That revenue then finances carbon reduction projects, and the practice of buying carbon offsets can help companies keep in good moral standing in the eyes of their customers.

Unfortunately, we’ve seen enough disorganization in this space that it has taken a bit of a beating. Trust isn’t great, and plenty have criticized the way things have been done thus far. And, to a degree, we’d agree with that criticism. However, we’d like to offer the perspective that maybe the beating is a bit premature. The voluntary carbon market is still getting its legs, we can’t penalize the toddler learning to walk when he can’t sprint.

Luckily, the space is shaping up. In fact, an independent governance body for the market, called the Integrity Council for the Voluntary Carbon Market (ICVCM), just released brand new guidance for ensuring high integrity offsets in voluntary carbon markets. The hope is to build a stronger reputation in the minds of the populace. Rules make everyone feel safe, and this space has been an unregulated playground of different approaches for long enough.

The guidance released outlines specific criteria for carbon offsets so there can be accountability… as you can’t manage what you can’t measure. Transparency is the goal, as we can measure what we can demonstrate. The leadership that determined eligibility to meet these new Core Carbon Principles (CCP) is comprised of Indigenous peoples, local community members, credit buyers, academics, project developers, NGOs, investors, and policy makers. We look forward to seeing how this goes.

Big Money Craves Credits

Demand is growing, despite the bitter water some believe the space is. Here’s how fast this is moving. In 2021, the estimated value of the space sat at $2 billion, up four times what it was in 2020. Within the next seven years, it will be between $10 billion and $40 billion… if it grows at the expected rate. It could go faster. According to a new report by Boston Consulting Group and Shell, the influence of external organizations on buyer decisions is growing, and a reputable framework matters.

One company has decided to push the limits and marry sustainability with cutting-edge technology. It’s a US-based crypto community called KlimaDAO. We’re intrigued, especially given how choppy the crypto waters have been recently. From where we’re sitting, we’re not quite ready to throw the baby out with the bath water. The business is still an impeccable use of blockchain… and they just launched a Universal Carbon Marketplace called Carbonmark.

Carbonmark aims to scale the digital carbon market, which is a segment of the voluntary carbon market. They offer a platform that does not charge fees and leverages public blockchain to give users access to ways to mitigate carbon impacts from hundreds of projects, with the push of a few buttons. The platform doesn’t require authorization to access. Because of this, carbon market stakeholders have instant access and transparent pricing.

Carbonmark leadership have their hearts set on addressing the trust issue in the voluntary carbon space, they see this as the way to do that. Smart contracts cut out lots of room for human hanky-panky, and there are lots of other benefits, like the reduction of transaction costs. The vision is this: open, public, neutral infrastructure where sellers create storefronts, buyers search, purchase, or retire carbon credits instantly. Clean, efficient, trustworthy.

Built on the Polygon network on a stack designed to reduce market fragmentation, the company is on par to show some people how it’s done. We’re applaud the effort… because the voluntary carbon market could help us achieve our climate goals. Investors, governments, non-governmental organizations, and business acquire credits or offsets, capital is unlocked, and that’s how we push forward. Come back next week, we’ll have more from the green tech space.