Why even non-profit businesses are compromised in their efforts to measurably reduce carbon if they have a bank account
Imagine you’re CEO of a company that genuinely wants to do whatever you can to reduce carbon and stay in business. You may even have a budget set aside for this purpose. The decarbonisation industry is now worth more than a trillion dollars itself – how do you sort the CO2-busting wheat from the Greenwashing chaff? Here’s our guide…
Spoiled for Choice
Decarbonisation is now a highly competitive industry. There are already thousands of businesses, NGOs and investors clamouring for your favour. Every day, new players enter the market, many riding the AI hype wave.
How do you choose between them? They’re all after your money, all promising to help you help yourself while ‘saving the planet’. Which is the best horse to back to meet your CO2-reduction ambitions?
Well, not quite all.
One new player is quite different. Not only does it offer its services for free, you can’t even pay it for them. Run completely by a global network of volutneer experts from a wide range of backgrounds, it has no bank account, because it only trades in the standard accounting unit used by climate scientists, metric tonnes of carbon dioxide equivalent reduced or sequestered (CO2e).
Hang on – free services with no money?…
We’ll come to the others shortly, but what does this new player tell us about your other decarbonisation investment options?
‘Is See Through Carbon feasible if it doesn’t have a bank account?’
As more partners come on board, more data is generated, more software developed, concepts proven, and more milestones sailed past, the burden of proof is subtly shifting.
The more See Through Carbon demonstrates its feasibility, the more CEOs have to justify their inaction. The question is becoming:
‘How can my company afford not to adopt See Through Carbon, and/or support it?’
Curious CEOs, intrigued by some unique element or other of the See Through Carbon (STC) ‘offer’, are making unsolicited approaches to STC, seeking to understand what’s new/unique/different about this new ‘offer’.
STC’s most attractive feature is its solution to the currently intractable conundrum facing all big corporations – Scope 3 Reporting (i.e. calculating the carbon footprint of their supply chain).
Now the Paris Accord reporting requirements are finally percolating down to SME level, companies and their CO2 accountants are discovering a huge problem – SMEs, which the OECD reckons produce up to 70% of total business emissions, can’t afford to pay for this new additional requirement.
As supply chains consist of SMEs. Carbon Accounting 1.0 fails them because all the hundreds of competing players share the same problem – they charge money for services SMEs can’t afford.
This makes the appeal of a new player offering free, accurate, open-source, transparent Scope 3 reporting obviously attractive.
The fact that it doesn’t have a bank account, not so much. Why?
To $ or not to $, that is the question
This money obsession is understandable, but carries a certain irony. Even for CEOs attracted by STC’s unique prioritisation of CO2e reduction over Money, not having a bank account, rather than enhancing credibility, often seems to do the opposite.
No CEO has yet disputed the logic behind slogans like:
- ‘If you can’t buy integrity, why should you be able to sell it?’
- ‘Why value something we’ve made up (money) over something we’re made of (carbon)?’
So why baulk when it comes to matching such slogans with action?
It’s not that CEOs disagree with any of STC’s rationale, or are unimpressed by what it has achieved so far with unpaid volunteers. It just seems that their reflexive mistrust of any entity without a bank account prevents them from demonstrating it through action, i.e, either/both:
- Adopting STC and mandating their supply chain to do the same
- Supporting STC by bartering goods and services for reputational gain and commercial benefit
STC trades only in the standard unit of greenhouse gas reduction (CO2e), and not the more familiar dollar, euros, pounds, yen and other fiat currencies.
For the moment, this still, flummoxes most, but not all, CEOs.
CEOs who can navigate past the ‘No Bank Account iceberg’ still have many legitimate questions, familiar to any new player in any market.
Even if STC can’t ‘sell’, at least in the sense most executives understand the word, overcoming client inertia is a familiar sales challenge. Human nature favours the status quo. No one ever got fired for buying IBM. Or as the See Through News Goal has it:
Speeding Up Carbon Drawdown by Helping the Inactive Become Active
Whether you’re dealing in carbon or money, moving anyone from a state of inaction to action is challenging. It’s why the first sale is the hardest. Trailblazing, pioneering and disrupting is the remit of plucky, bold start-ups, not cautious, sceptical, neophobic established corporations.
Add an unfamiliar concept like No Bank Account carbon accounting, and this reticence is even more understandable. People look gift horses in the mouth for a reason. When you’re used to price tags, ‘free’ items are hard to value. ‘Too good to be true’ offers have long been a hallmark of scammers, con artists and bilkers.
Hardly surprising, then, that far from being taken as a mark of authentic integrity, not having a bank account triggers mistrust and vigilance.
CEOs often assert that ‘STC will need money at some point if it is going to work at scale’. When challenged, they just can’t put their finger on exactly when, or what for. Dealing with an entity with a bank account would just be more reassuring, somehow.
The NBA iceberg may obsess some, but for STC, it’s a pragmatic means, not an ideological end. So long as being money-free charts the shortest route to measurably reducing the most greenhouse gas, it’s the preferred option.
What’s certain is that no one else has yet tried it. Why might it be worth a shot?
Taking the ‘S’ out of USP
Not using money as a proxy for carbon reduction is very much the whole point of See Through Carbon.
In the realm of carbon accounting, being driven entirely by a global network of volunteers motivated only by carbon reduction, aided by unsolicited, no-strings-attached donations, makes STC unique.
This matters because carbon accounting is now a trillion-dollar global industry. Accurately measuring carbon footprints, providing carbon reduction plans and compiling data for free, without depending on investors or funders, makes STC uniquely independent.
Economic logic predicts that the more competitors in any market, the greater the incentive for providing the most attractive product at the lowest cost. This works fine when the end game is measured in dollars, but not when the output metric is reduced greenhouse gases. Why not cut out the middle man, and trade directly in COe2?
Trading solely in the ‘currency’ of CO2e (the standard unit for greenhouse gases) rather than dollars and cents is precisely what guarantees STC’s integrity.
If, like many CEOs, you’re unsure how that might work in practice, here’s See Through’s draft Data Tariff.
Dealing solely in metric tonnes of CO2e, rather than using money as a proxy, is STC’s Unique Selling Point – insofar as a network with no bank account can be said to ‘sell’ anything.
STC believes that charging directly in CO2e, rather than via the corrupting medium of fiat currencies, is the best guarantee of efficacy, credibility, accuracy, pervasiveness, broad adoption and longevity.
Carbon Accounting 1.0’s money trap
Not using money is also a way of avoiding the commercial pitfalls that have trapped the best intentions of Carbon Accounting 1.0 auditors, consultants and data providers.
Consider STC’s current ‘competition’. Inverted commas are required, as if you look at mission statements, everyone wants the same outcome – measurable, rapid decarbonisation.
But after 30 years of hockey-stick growth inCO2 emissions coinciding with the hockey-stick growth of a trillion-dollar carbon accounting industry, we’re entitled to dig a little deeper. Why has Carbon Accounting 1.0 failed in its primary purpose, measured in CO2e, while enriching itself in dollars? Might the two be related?
As might be expected of a highly competitive industry, with hundreds of competing rivals, not all Carbon Accounting 1.0 entities are the same.
Some longer-established organisations like Verra, Gold Standard or Redd+., as has now been widely documented, have given the industry a bad name, causing substantial reputational damage to those corporations who allowed themselves to be hoodwinked by the beguiling, but busted-flush, allure of carbon offsetting.
There are other, less compromised players. Here are three that are often cited as ‘new and different’ from more tarnished incumbents in the three scopes of Carbon Accounting (excluding the most lucrative of all – issuing green ratings to justify charging a premium for the benefit of ESG (Environmental, Social and Governance) fund providers and investors:
- Carbon Footprint Calculation (in money terms, a snapshot financial statement)
- Carbon Reduction Plan (in money terms, providing consultancy road maps)
- Carbon Data (in money terms, a disruptive Silicon Valley data ‘play’)
Here’s how these three relatively credible players describe themselves on their websites:
- Ecovadis: helps you manage ESG risk and compliance, meet corporate sustainability goals, and drive impact at scale by guiding the sustainability performance improvement of your company and your value chain
- Science-Based Targets: drives ambitious climate action in the private sector by enabling organizations to set science-based emissions reduction targets
- Open Earth: a California-based nonprofit creating and deploying open source digital systems and solutions for a thriving planet
The non-profit bank account problem
Like discredited outfits like Verra, Gold Standard and Redd+, these new players are Non-Governmental Organisations.
It’s tempting to assume this NGO status guarantees their integrity. Declaring yourself ‘not-for-profit’ or ‘non-profit’ (same thing) implies being unsullied by money.
If you think being a non-profit confers immunity from money’s corrupting influence, you’ve either not experienced the zero-sum reality of charity fund-raising, or haven’t been paying attention to how these market forces play out in the decarbonisation industry
Even if you’re not technically driven by profit, ROI or delivering shareholder value, depending on money means being beholden to (and hence to some degree controlled by) whoever’s paying the bills.
It’s naive to claim otherwise – consider political lobbying and funding. Diligent equine dental examination is indeed required when Big Oil offers you a private jet, or staff to draft your energy policy.
Beyond lofty-sounding mission statements, commercial or NGO, any entity with a bank account needs money to survive.
If non-profit status has done nothing to prevent carbon accounting’s Old Guard from being corrupted by using fiat currency as a means to reach their CO2e reduction Goal, why should we expect a different outcome from any new players using the same model, still less from a commercial entity with no NGO pretensions at all?
Follow the (non-profit) Money
Follow the Money, like any good journalist, accountant, or law enforcer, and what do you find?
- Ecovadis: is the sector’s first ‘unicorn’ company, having raised another US$500M from venture capitalists, not usually noted for prioritising CO2e reduction over profit.
- Science-Based Targets: though admirably transparent about their funding, SBT’s Funding Page reveals the potential compromises and conflicts of interest. It lists 6 current core funders, but also 8 ‘Past Funders’. How stable can an NGO be if its key funders keep deserting it? More to the point, those past and present funders include The Bezos Earth Fund, IKEA Foundation, Bloomberg Philanthropies, Amazon, Rockefeller, UPS, Arcelor Mittal and Danone. Are we really trusting our civilisation’s future to the philanthropic arms of profit-driven online retailers, furniture stores, financial services, parcel delivery companies, steelmakers and dairy product manufacturers? Can we do any better, or at least have a less compromised alternative in case they turn out badly?
- Open Earth: is noticeably more coy about its funders, a red flag in itself. What they do reveal hints an unusual dependence on ‘cryptocurrency endowments’. It offers Non-Fungible Tokens (NFTs) as fundraisers. While there’s nothing inherently corrupting about the blockchain technology behind crypto, the spectacular collapse of the world’s biggest Ponzi scheme, Sam Bankman-Fried’s FTX, has done little to encourage its credibility as the backer to rely on to save human civilization. See Through News has a track record of spotting such warning signs, so has reasons to be sceptical.
To return to counsel our sceptical investor, with a sincere, practical desire to urgently mitigate the worst effects of human-induced climate change.
Having thoroughly examined, assessed and weighed up the risk/reward cost/benefit of competing models within the decarbonisation market, of the following two models is which is more likely to measurably reduce the most carbon>
- See Through Carbon, with no bank account
- Carbon Auditing 1.0 NGOs and businesses
If you’re investing in a sustainable future, sceptically or not, which gift horse would you put your money on?