Welcome to State of play, a series where we gather insight on the world's most pressing issues. In our first edition, we explore the carbon credits industry and invited Sylvera - the carbon credits rating agency, to provide their insight into the 'state of play' for the carbon credits industry.

'Carbon credits' are purchased to offset corporations' and individuals' carbon emissions and are a crucial tool in the world's drive towards net-zero. The increase in demand for carbon credits has led to increased scrutiny of the quality of the credits. It is often very unclear what buyers are actually buying. There's no doubt we need improved transparency and clarity around carbon credits, but how close are we to achieving this? 

Here, we catch up with Sylvera to discuss the topic of carbon credits. Sylvera provides in-depth and high-quality carbon ratings, which enable companies to invest in high-quality offsets and help deliver net-zero commitments.

What's your current view of the carbon credits industry?

After emissions reductions, carbon markets are the greatest tool we have to achieve net-zero. 

The reason for this is simple. The reality is, today, it is impossible for 100% decarbonisation in most industries. The technology is just not there yet. 

So, while this technology comes on stream, carbon markets are a powerful tool for corporations to achieve their net-zero targets. 

To be clear, carbon markets are by no means a cure-all solution. For carbon offsetting to be effective, it must be part of an organisation's broader climate action strategy. This must include reducing their own greenhouse gas emissions as a first step before carbon offsetting is explored as a complementary strategy. 

However, it is imperative that we reduce greenhouse gas emissions within a specific time frame, and we have no more time to waste. Carbon offsetting allows immediate action, for example, allowing indigenous people and local communities to benefit from forest conservation and associated biodiversity and social co-benefits, rather than being economically incentivised to unsustainably exploiting forest resources. Nature-based solutions also have significant potential to scale: it is estimated that they can provide one-third of the carbon reduction the planet needs to stabilise the climate by 2030.

It's undoubtedly a growing space, what is the size and growth of the carbon credits market?

Voluntary carbon markets are scaling fast, and they have the potential to drive billions of dollars of investment into carbon projects. In fact, it has been predicted that voluntary carbon markets will be worth up to $100 billion by 2030. 

There has traditionally been a trust problem, and this has the potential to derail this growth trajectory and slow down the pace of change. 

If we can add a layer of transparency and inject more trust into the marketplace, we have the power to turn the tide to hit net-zero and mitigate the worst impacts of climate change. 

What possible solutions will help to improve the trust of the industry?

To date, corporate buyers have been hamstrung by asymmetric information. They can't assess whether a ton of CO2 sold to them really means a ton and because they can't assess quality, they can't assess value either - and this can often lead to them overpaying for the credits they purchase. 

So, ultimately, the market needs reliable data to establish trust.

We use cutting-edge technology and expert teams to produce independent, detailed, and accessible ratings that assess offset projects on objective measures of quality. These ratings collapse an insanely complex process down into three fundamental questions:

Did the project issue the correct number of credits?

Would the project's activities have occurred anyway and without the revenue from a carbon credit?

Will the CO2 be out of the atmosphere for a meaningful period of time? 

On top of this, we also consider the co-benefits that the project brings to local communities and the environment - particularly biodiversity. By adding this transparency, we can ensure that high-quality projects command the price they deserve, and projects with poor additionality or unreported issues in performance will be discounted. 

How close are we to achieving the solution mentioned above / what does 2030 look like?

Our ratings platform is already helping corporate buyers, traders and exchanges confidently evaluate the best, and most impactful carbon credits to invest in. 

We have now rated the majority of REDD+ issued credits and in the remainder of 2022 we will expand our coverage significantly, adding new project types like renewables to our platform. 

We're at a critical point in securing the future of the planet, and we're closer than ever to a slew of dramatic climatic and ecological tipping points. But, if we can fix the current market failures, we will have a much better chance of avoiding the most serious impacts. 

If you could wish for one thing (policy/ innovation) to improve the industry, what would it be?

To date, there has been little to no correlation between price and quality. This means a great quality carbon project might not be commanding the price it deserves for its credits, while, on the other hand, a poor performing project could be selling credits for too much. 

Increased transparency into the quality of projects - through ratings platforms such as ours - will naturally improve this, but we also need corporations to recognise that carbon offsetting is not a get-out-of-jail-free card. By only using carbon offsetting as a means to balance the shortfall of net-zero strategies, low-quality credits will not be purchased in the first place, and demand will increase for high-quality projects that are having a positive, tangible impact on the planet. 

If you could wish for one thing to stop in the industry, what would it be?

To date, carbon credits have had a bad reputation and they have been likened to indulgences instead of legitimate solutions. There are two strands to this: thinking about offsets in isolation, and the use of poor-quality offsets.

It's important that offsets are part of a broader decarbonisation strategy, for all companies and countries. The concept of the 'mitigation hierarchy' clarifies that reducing one's own emissions should be the priority. Where that is not possible, at least not in full, high-quality offsets can play a crucial role.

The use of poor-quality offsets is another challenge, one which Sylvera was created to tackle, through the provision of rich, independent data. Our data shows that the majority of projects are having positive impacts on the environment. This activity cannot be discounted if we are to achieve net-zero targets.

To find out more about Sylvera, please visit their website here: https://www.sylvera.com/

Welcome to State of play, a series where we gather insight on the world's most pressing issues.

State of play: Carbon credits with Sylvera

State of play: Carbon Credits with Sylvera

'On the horizon' is a brand new series where we meet businesses, initiatives and people at the forefront of creating a brighter tomorrow.

In our first episode, we catch up with Alex Stephany, CEO of Beam. 

Beam is an organisation that empowers people to leave homelessness for good. They help homeless people find new jobs and homes, giving them a brighter future. The Beam platform enables the public to donate directly to a homeless person's 'crowdfunding campaign'. The campaigns can range from learning new vocational skills (such as Gary learning to be a plumber, pictured below) to securing a stable home. Beam also work with governments and corporations to help lift people out of homelessness. We had the pleasure of catching up with their CEO and founder, Alex Stephany.

How was Beam born & why does it exist? 

Several years ago, I got to know a homeless man at my local Tube station. I’d buy him cups of coffee and pairs of thermal socks when it was getting cold. At one point, he disappeared for weeks on end. When he reappeared, he looked years older: he told me he’d had a heart attack and had just come out of hospital. Despite the well-meaning gestures from myself and no doubt others, he was in a worse position than ever. 

So I began to ask myself what it would take to make a lasting difference to this man’s life. He had never had a job, and was illiterate. For me, the answer lay in empowering him with the skills and training needed to sustainably support himself. Of course, that would cost far more than coffees or socks - but what if everyone chipped in?  

The idea of crowdfunding employment training for homeless people was born. Over the following nine months, I developed the model working with homeless people and charities. Beam launched in October 2017. 

Our mission is to create equality of opportunity at scale, starting by crowdfunding brighter futures for homeless people in the UK. In the future, our goal is to work with thousands more disadvantaged people not just in the UK, but worldwide - from refugees to prison leavers to people with disabilities. 

I can’t quite believe that Beam will be turning five in September. We’ve quadrupled the team in the past couple of years (there are now 50 of us!) and outgrown our offices twice. The Beam Team is a truly remarkable group of extremely intelligent, experienced but also down to earth people. 

In this time, we’ve proven that Beam’s community-led approach to supporting disadvantaged people into jobs truly works: our beneficiaries are starting work 80% of the time. And it’s amazing to see Beam rolled out not just across London, but across many other cities up and down the UK.

We have crowdfunded more than £3m on behalf of homeless people, 100% of which supports their progression into stable work in over 60 career pathways: whether that’s the cost of training, childcare, tools, textbooks or more. It’s a highly personalised approach that focuses on people’s unique strengths and needs. And the public can fund the progression of people out of homelessness with unparalleled transparency and efficiency. We’ve now supported more than 700 people to leave homelessness for good, which we’re incredibly proud of. 

What do you hope 2030 looks like for Beam?

By 2030, my vision is for Beam to help 1 million disadvantaged people into stable jobs. In turn, allowing us to become one of the most positively impactful companies in the world. It’s a bold vision, but one that I think we can achieve through lots of action, grit and hustle. 


We’re growing rapidly and have big ambitions to scale Beam to as many people as possible. This means we need to hire the smartest people and this uses up a lot of resources. If you’re reading this and looking to join the UK’s top Tech for Good startup, we’d love to hear from you! [https://beam.org/careers]


If you could wish for one thing, what would it be?

Greater collaboration between tech, government, charities, corporates and local communities. At Beam, I’ve seen first-hand how social impact is best achieved when everyone is working to their strengths. For example, my background is in tech, while my cofounder Seb Barker joined Beam from the NHS after years working in homelessness. We could only create Beam by combining experience from wildly different professional worlds. What would happen if more people working in tech collaborated with people who'd never worked a day in tech? How many more problems could we solve?

Be sure to check out the wonderful work of Beam via their website: https://beam.org/

On the horizon is a brand new series where we meet businesses, initiatives and people at the forefront of creating a brighter tomorrow.


With more and more companies signing up to 'Net-Zero', we thought it might be good to explain what it means in practice.

The UN has asked the world to aim for net-zero emissions by 2050, which would help limit global temperature rise to 1.5 deg C above pre-industrial era levels, the level deemed 'safe' in the climate crisis.

Many companies have pledged to become net-zero by the middle of the century. This means that by 2050, the company has committed to reducing their carbon emissions to the lowest amount possible, and they will remove from the atmosphere whatever remaining carbon pollution they can not entirely eliminate. Other companies have signed up to become carbon neutral. This is similar to net-zero but does not include commitments to cut emissions first, relying more heavily on carbon removal.

This removal of the carbon they emit is known as carbon offsetting. Many have criticised the offsetting element of the schemes as it allows companies to 'burn now, pay later'. We'll have more on carbon offsetting in a future post.

Carbon offsetting compensates for carbon dioxide emissions produced by industry or from general human activity through schemes that help to balance out the carbon dioxide in the atmosphere. Offsetting is an internationally recognised way to take responsibility for unavoidable carbon emissions. 

In theory, when you offset one tonne of carbon through an offset scheme, you essentially remove one tonne of carbon from the atmosphere.  Companies or individuals must purchase the equivalent volume of their emissions in 'carbon credits' to offset emissions. These are independently regulated/ approved and involve various activities that either reduce greenhouse gas emissions or increase carbon sequestration. 

This includes and is not limited to renewable energy projects, forest protection, tree-planting activities and energy efficiency improvements. Given climate change is a global issue, carbon offset projects can take place anywhere globally. The idea here is that Greenhouse gases mix throughout the atmosphere, so reducing them anywhere contributes to overall climate protection. 

Some have heavily criticised offsetting as 'kicking the can down the road' and believe there should be more focus on cutting carbon emissions full stop. We have also seen that some of the forests that Microsoft and BP  used to offset their emissions have been burnt down in wildfires across North America, which brings into question whether offsetting goes far enough. (Source). 

In our recent blog post, we introduced the concept of ESG and what this term means for investors. Here, we introduce impact investment, what it means and look into its growth in recent years and whether investors can genuinely make a financial return when investing in impact.   

Although the term was first introduced in 2007, impact investing has been around for many years. In brief, Impact investing is an investment strategy where investors seek out specific social or environmental benefits from their investments beyond just gaining a financial return. Whereas an investment through an ESG lens may look to avoid negative impact, an impact investment will look to generate a measurable positive impact on social or environmental issues. 

The theory of impact investing is that by choosing to channel capital into investments that positively impact our environment and societies, investors can have a transformative effect on a positive future. Essentially, Investors are looking to the private sector to solve some of the world's most pressing issues and using their money as a force for good. 

As with all investments, the exact method and amounts will be dependent on the individual person. Depending factors include their risk appetite and how impact or financially driven they are. For example, finance-first (prioritising return) vs impact-first (prioritising impact) investors, depending on what is more important to them. Impact investments can be made through a range of asset classes, including - equity, private equity, loans, cash deposits or hybrid forms. Impact investment has attracted a wide range of investors from everyday/retail investors to fund managers, right through to religious institutions. A few examples of impact investment may be renewable energy, community development projects, education, health, microfinance and many more.  

Some consider impact investing to be an extension of philanthropy; however, impact investing challenges the theory that social and environmental issues can only be addressed by charitable donations. To be clear, impact investments are always made with the expectation of a financial return or for the enterprise to become financially self-sufficient. It is therefore not a charitable donation or grant. So how do impact investments actually perform?

Well, according to the GIINs (Global Impact Investing Network) ‘2020 annual Impact investor survey' only 88% of investors believe their impact investments are either performing as expected or overachieving. In the same report, only 1% of investors feel their investments are underperforming on impact. Thus proving you can indeed create impact alongside a financial return. 

The growth of impact investing has been monumental in recent years. In their Impact investor survey mentioned above, The GIIN estimated a total global market size of $715billion at the end of 2019. Incredibly doubling each year from 2017. In addition to this, The International Finance Corporation estimates that the pandemic has prompted an increased awareness in impact investing, suggesting $2.3trillion was being invested for impact in 2020 - a whopping 2% of global assets under management.  

With the climate crisis rising up the agenda on investors’ minds, it is not just environmental investments that are growing, it is social investments too. According to Big Society Capital, one of the UK's largest social impact investors found that social impact investing has grown 8 fold in the time from 2011 to 2020, from £834m to £6.4m. 

Millennials have been a huge driving force behind the shift towards impact investing. This is predicted to grow even further, particularly when you consider millennials in the US alone are set to inherit around $30 trillion from boomers in what is being coined the 'Great generational wealth transfer'. However, it must be noted that all generations are now getting in on the act! 

As an impact investor, it is vital to ensure you understand the holistic impact an investment may have. With Etcho, we'll show you how well a company aligns to 17 different goals, therefore allowing you full transparency of an overall impact. So, if seeking impact is important to you, why not join our waitlist for priority access to the app.

It’s no secret that the world of investing loves an acronym, and over the last decade, the use of ‘ESG’ has become a somewhat household name within the space. However, what does it actually mean, and is ESG the same as Impact Investing and Socially Responsible Investing?

ESG refers to Environment, Social and Corporate Governance. In a nutshell, it is a criteria to assess how well a company performs against these three issues and can be used to analyse negatively performing companies and seek out opportunities. 

E - pollution/emissions, S - Human rights, G - board structure.

Despite a recent boom, this set of criteria has actually been around since the 1960s as investors looked to exclude companies invested in ‘dirty’, ‘bad’ or ‘controversial’ activities such as those involved in the South African apartheid. 

Analysing companies against these criteria allow an additional analysis layer for accurate valuations to hopefully mitigate risk and produce a financial return. A good example would be the 2015 Volkswagen scandal that saw stocks plummet as it was discovered that VW had lied about its emissions scheme and a ‘light’ approach to ESG from investors essentially missed the signs.  

So, in a nutshell, ESG criteria can be used to analyse negatively performing companies and seek out opportunities in relation to specific issues and is often used in addition to traditional financial analysis to establish valuations. 

Recently the growth of ESG has skyrocketed, with global AUM estimated to hit $53 trillion by 2025! PwC predict that ESG will account for more than half Europe’s funds under management by 2025! Several factors have fueled this:

Younger generations, such as millennials, are more concerned about the impact their finances have on the world we live in.

The global landscape has changed with new regulations coming into play to mitigate ESG risks such as climate change exposure and privacy issues.

The availability, transparency, and tools we now have to analyse ESG data have grown, giving more accurate insight into how companies perform.

It’s not just ESG that has graced the investing landscape. Impact Investing and Socially Responsible Investing are terms that often get used interchangeably but mean quite different things.

Socially Responsible Investing takes ESG to another tier and looks to negatively or positively screen companies based on certain principles, for example, removing all companies from a portfolio involved in tobacco. While financial returns are still important, the alignment to specific characteristics must be met.

Impact Investing is different again as it looks to only direct capital into companies that have a positive outcome against specific criteria, regardless of financial performance. An example might include an NGO that produces climate tech.

Ultimately, the investment criteria to be used comes down to the balance between the desire for financial return and the importance of alignment to specific issues.

We’ll be diving into Impact Investment and SRI in more detail in upcoming blogs.

https://www.investopedia.com/financial-advisor/esg-sri-impact-investing-explaining-difference-clients/

https://www.rockpointadvisors.com/insights-the-vw-emissions-scandal-a-failure-of-esg-investing.php

https://www.msci.com/esg-101-what-is-esg/evolution-of-esg-investing

https://www.bloomberg.com/professional/blog/esg-assets-may-hit-53-trillion-by-2025-a-third-of-global-aum/

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State of play: Carbon Credits with Sylvera

On the horizon: Beam

What is Impact Investing?

What is ESG?

What is Carbon Offsetting?

What is Net-Zero?