In an interview for MORFO 's white paper on The Future of Reforestation Carbon Credits, Guillaume Leti emphasizes the importance of investing in carbon removal nature-based solutions, particularly reforestation, and how technology, including blockchain, enhances the transparency, efficiency, and impact of these initiatives. The CEO of Carbonable, a platform for managin, monitoring, and reporting carbon contributions, sheds light on the current challenges and opportunities in the carbon credit market, as well as provide valuable recommendations for companies considering investments in reforestation carbon credits.
Can you introduce yourself?
I am a Co-founder and the CEO of Carbonable, with an Engineering degree and an MBA, 10 years’ experience leading tech products at BBTV, StradigiAI and environmental initiatives in NGOs including Care International.
What is Carbonable?
Carbonable is the all-in-one platform dedicated to carbon contributions. Leveraging the most advanced technologies, our platform ensures tailored investment, streamlined management, and continuous reporting on all your carbon assets.”
How are you involved in carbon projects related to reforestation? What's the Carbonable role?
Carbonable’s mission is to elevate carbon asset management to a new standard of integrity and operational efficiency.
Carbonable takes care of :
- Sourcing and enabling tailored investment in quality carbon credit and Nature-based solutions projects (ex-post and ex-ante) on which we carry out thorough due diligence
- Tracking and monitoring the progress of each invested carbon asset and project (through field data, satellite imagery, and AI).
The Carbonable Carbon Asset Manager platform allows you to :
- Centralize, standardize, and manage data from all carbon assets (all projects, project developers and certifiers together).
- Manage your strategy and facilitate decision-making across the entire value chain.
- Make your data audible and compliant to anticipate future regulations.
- Enhance the value of your carbon assets with customized, transparent and continuous reporting (for internal or external communication to all stakeholders).
How do Web3 and blockchain improve carbon offsets?
Web3 technology and blockchain offer significant advances to improve carbon offsets in several key ways:
- Transparency and traceability
Blockchain technology introduces a decentralized and transparent framework for carbon offset management. All carbon offset transactions are recorded on an immutable and publicly accessible ledger (i.e. digital record). This ensures that all stakeholders can easily verify and track the authenticity of carbon offset projects from inception to execution in real-time, thus allowing them to make well-informed decisions that align with their sustainability goals.
- Access to financing
Blockchain technology offers new avenues for crowdfunding and decentralized financing of carbon offset projects. Through tokenization, carbon projects can be divided into smaller tradable units, making them more accessible to a broader range of investors and individuals. This democratization of funding enables smaller-scale projects to receive adequate financial support, further accelerating the growth and impact of carbon offset initiatives.
- Integrity - Proof of future contribution
Traditional carbon offsetting often relies on promises of future contributions, which can be challenging to verify and track. With the integration of smart contracts on the blockchain, the carbon offset landscape is revolutionized. Smart contracts automatically execute carbon offset transactions when predefined conditions are met, ensuring proof of future contributions. This shift from mere promises to tangible proof enhances the credibility of carbon offset projects and strengthens the commitment of businesses and individuals towards sustainability.
- Efficiency, automation and cost savings
Blockchain technology streamlines carbon offset processes, reducing administrative and operational overhead as well as potential errors. Through automated smart contracts, the verification, issuance, and transfer of carbon credits can occur seamlessly and securely. The decentralized nature of the blockchain eliminates the need for intermediaries, reducing transactional and administrative costs.
- Accounting and auditability
Smart contracts on the blockchain enable automated vesting and accounting of carbon credits, which simplifies auditing processes, enhancing accuracy and compliance with regulatory requirements. Data related to emissions reductions and sustainability outcomes can be recorded immutably on the blockchain, providing auditors and stakeholders with robust and transparent evidence of the project's impact.
- Liquidity
By tokenizing carbon assets as digital assets on the blockchain, carbon offsets become highly liquid. These digital assets provide investors with the flexibility to buy or sell carbon assets at any point in time. The increased liquidity not only attracts a more extensive range of investors but also ensures a dynamic market for carbon assets, facilitating the flow of capital to the most impactful and deserving carbon offset projects.
- Global interoperability
Blockchain technology fosters a borderless ecosystem, connecting diverse carbon offset platforms and stakeholders. By employing standardized protocols and open-source frameworks, the exchange of data and carbon assets information flows effortlessly between networks.
Are carbon credits linked to reforestation riskier than the one linked to other nature-based solutions (such as forest preservation) or technological ones?
At Carbonable, we firmly believe that the quality of a carbon project cannot be solely determined by its typology, project developer, or certifier. Instead, our evaluation process involves considering multiple parameters, including the anticipation of contingencies, to ensure the highest standards of integrity and sustainability.
Each project type presents its own set of opportunities and challenges, but they all play essential roles in combating climate change. Nature conservation projects are crucial for preserving biodiversity and safeguarding existing carbon sinks, while carbon removal projects actively capture atmospheric carbon dioxide. Additionally, technological innovations offer promising opportunities to address emissions in innovative ways.
Given the diverse landscape of carbon projects, we recognize the importance of tailoring solutions to align with each company's unique narrative, goals, and criteria. Some projects may be a better fit for certain businesses, depending on their specific sustainability objectives.
Our role at Carbonable is to guide companies in building and assessing their ideal carbon asset portfolio. Through collaborative efforts, we empower businesses to make well-informed decisions and strategically select projects that best align with their sustainability goals.
Why should a company invest in carbon credits linked to reforestation rather than other types of carbon credits?
At Carbonable, we advocate that companies invest in carbon credits linked to natural carbon capture solutions (including those based on reforestation) because of their powerful triple impact:
- Climate change mitigation
Nature-based projects play a pivotal role in combating climate change. By restoring and expanding forest natural carbon sinks, they effectively remove carbon dioxide from the atmosphere. Through this essential carbon sequestration, companies contribute significantly to reducing global carbon emissions, paving the way for a more sustainable and resilient planet.
- Preserving biodiversity
Preserving biodiversity is vital for the health and harmony of our planet. Nature-based Solutions play a crucial role in protecting and nurturing diverse ecosystems for a variety of plant and animal species. The preservation of biodiversity strengthens the resilience of our natural environment, ensuring a thriving and balanced ecosystem that benefits all life forms on Earth.
- Livelihood empowerment
Beyond environmental benefits, Nature-based Solutions positively impact communities and livelihoods. By investing in such initiatives, companies foster sustainable livelihoods, generating employment opportunities, and promoting eco-friendly practices. The empowerment of local communities uplifts societies, fostering social progress, and driving inclusive economic growth.
By investing in carbon credits linked to Nature-based Solutions, companies actively participate in safeguarding our planet's future. At Carbonable, we are dedicated to supporting companies in making this planet-positive choice and contributing to a more sustainable world for generations to come.
How do you see the current situation for carbon credits linked to reforestation?
Our vision on the current situation regarding reforestation carbon credits is one of recognition for the pressing need for Global Net-Zero commitments on both the Earth and the corporate landscape. Undoubtedly, the concept of carbon contributions through Nature-based Solutions embodies a profound virtuous scheme. However, the market is still relatively immature and faces some critical challenges that hinder it from reaching its full potential.
We believe that acknowledging, understanding and addressing the hurdles encountered by organizations navigating this complex landscape is paramount.
The most pressing challenges encompass exposure to greenwashing, lack of uniformity and complex readability, as well as an operational gap.
Greenwashing poses a significant threat, with some companies struggling due to inadequate project due diligence, prioritization, and monitoring. The lack of proper communication often stems from insufficient data on projects and a broader lack of education on the subject.
Moreover, the lack of uniformity and complex readability within the carbon credit market poses a barrier to its accessibility. The fragmentation and proliferation of standards create a sense of distrust and confusion among market participants. Additionally, differing regulatory landscapes across regions further complicates the situation.
Last, the absence of dedicated tools to execute carbon contribution strategies and manage carbon asset portfolios accentuates the operational gap. Companies and investors often rely on inefficient manual processes, which are time-consuming and prone to errors.
How does your technology enable companies to track the impact of their carbon credits?
Carbonable's technology offers a seamless and powerful solution for tracking the impact of carbon credits. Our user-friendly back office reporting system centralizes and standardizes data from diverse sources, including field data, Direct Measurement and Remote Verification (dMRV) using satellite imagery, and AI-powered analytics. This approach ensures accuracy and reliability in our reporting.
With our system, qualitative and quantitative information from key stakeholders is compiled, guaranteeing comprehensive and insightful reporting. Real-time web reports are automatically generated for each carbon credit project, complemented by a global report that aggregates all project data.
These reports are not only automated but also highly customized, shedding light on the precise environmental, biodiversity, and livelihood impacts of each initiative. With such transparency and specificity, companies can confidently share these reports with internal teams and external audiences, bolstering their credibility and commitment to sustainability.
At Carbonable, we strive to make sustainability reporting a seamless and impactful process, enabling companies to communicate their positive environmental contributions with utmost clarity and confidence.
Do you have any recommendations or advice for a company looking to invest in carbon credits linked to reforestation?
Here are our recommendations and tips for a company looking to invest in carbon credits linked to reforestation:
- Embrace the Measure Avoid Reduce Contribute (MARC) framework and ensure a clear commitment to it. Exclusively counterbalance your incompressible amount of carbon emissions (i.e., the emissions that you cannot avoid or reduce in any way).
- Develop a strategic plan for your carbon contribution investments. Clearly define your contribution goals, outlining the specific project criteria you are looking for. Create a realistic timeline for your investment initiatives, ensuring alignment with your company's sustainability objectives and budget. Depending on the above, you can adopt a forward-financing (ex-ante) or direct purchase (ex-post) strategy or a combination of both.
- Adopt a smart portfolio strategy. First and foremost, invest exclusively in high-quality projects by conducting rigorous due diligence (internally or externally). Evaluate project legitimacy, credibility, and effectiveness in monitoring and delivering meaningful carbon contributions. Anticipate price increases by securing a supply for the incompressible part of your carbon contribution in the decades to come. Minimize risk by diversifying your investments across various reputable projects. This approach reduces exposure to specific challenges and ensures a more balanced and impactful carbon contribution portfolio.
- Communicate responsibly. Communicate your sustainable initiatives transparently and responsibly to avoid greenwashing. To do so, and echoing recommendations about building a smart portfolio, choose projects that implement a robust monitoring and reporting system to verify and validate their environmental contributions. Share your approach with all stakeholders, demonstrating your commitment to authenticity and genuine contributions to environmental preservation.
- Invest in necessary tools. Equip your company with the necessary tools and resources to effectively manage all carbon assets throughout the entire duration of the projects. Having a comprehensive and efficient system in place will enable you to track progress, make informed decisions, and optimize the impact of your carbon contribution strategy and investments.
By adhering to these principles and taking these considerations into account, your company can invest confidently and responsibly in nature-based carbon assets, making a significant contribution to environmental preservation while avoiding the pitfalls of greenwashing and ineffective initiatives.
