6 Oct, 2022
Salesforce exec looks to lead sustainability push with carbon credit marketplace
➤ Carbon credits can be earned by avoiding, reducing or removing greenhouse gasses in order to compensate for emissions created elsewhere.
➤ Salesforce believes that carbon credits are not a substitute for emissions reductions.
➤ Salesforce would like to see government mandates around greenhouse gas disclosures.
As companies face increasing pressure to set ambitious net-zero emissions targets, questions are being raised about what role carbon credits can and should play. While critics say carbon credits are a poor substitute for emissions reductions, proponents note that when used correctly, carbon credits can incentivize emissions reductions by putting a price on carbon.
Looking to give buyers a secure space to purchase third-party-rated carbon credits, Salesforce Inc. plans to launch its Net Zero Marketplace this month. S&P Global Market Intelligence spoke with Patrick Flynn, Salesforce's senior vice president and global head of sustainability, about the challenges of working to mitigate climate change, as well as Salesforce's efforts to make carbon offsets more accessible to merchants and enterprises of all types. The following is an edited transcript of the conversation.
S&P Global Market Intelligence: What is the target market for the Net Zero Marketplace? Do you have a specific type of enterprise or merchant in mind?
 Salesforce senior vice president and global head of sustainability Patrick Flynn said the company supports a standard for companies to report comparable greenhouse gas emissions data.Source: Salesforce |
Patrick Flynn:
Some have raised concerns about carbon offsets, saying they are less effective than direct emissions reductions. Can you tell us more about Salesforce's vetting process?
I think the guidelines and the pursuit of quality really ends up on both sides of this marketplace — the supply side and demand side. On the demand side, there's an affidavit for any customer who makes a purchase. One of the things they need to agree to is that for carbon credits to play a role, that comes after emission reduction strategies. I think that's an important thing that we're trying to stand behind. This is not "instead of," this is "in addition to" criteria on the supply side.
We've got a team of experts to really understand what quality looks like. To some degree, that will change based on the values and the priorities of a given customer. So we're not trying to say we know we know what quality is and is not and we are going to be the arbiter of that. Instead, we want to make sure we are getting some of the best projects in the marketplace that represent a wide variety of project types. And we want to open source all of that, increase the transparency, and hopefully make it such that this is one community learning and discovering what quality means, as opposed to each company doing it off on their own in a silo behind closed doors.
Is there any kind of specific criteria, such as global or U.S. guidelines, that you're following to help you with transparency efforts?
While all of the carbon credit projects in Net Zero Marketplace are certified by carbon registries, our third-party rating company partners provide an additional layer of quality to the credits. Carbon credit registries look at projects from the lenses of additionality, permanence, leakage and other factors. Third-party rating companies layer on additional information on the projects from a different vantage point, such as co-benefits like community engagement, land use, biodiversity and job creation.
Following along with some of the legislative or regulatory efforts in this space, there has been some action in Congress and from the EU to take steps to mitigate climate change. From a policy perspective, are there any measures that you would support to help push that progress even further forward?
We want to get to a future where there is trust and comparable greenhouse gas emissions data coming from companies. And so we've been not just looking closely but also engaging closely in the movement to make greenhouse gas disclosure more of a regulated requirement. The way that connects to the Net Zero Marketplace is, if we can get more disclosure out there, I think we can help motivate companies to take action in an all-of-the-above kind of way. And I think it will highlight that voluntary carbon credits and compensate for any residual emissions that can't be avoided or reduced in that year. Bringing yourself to net-zero residual emissions in that year is a way to demonstrate through trusted data that you're serious about climate change.
As more formal climate disclosure regulations come forward around what qualifies a high-quality credit/project, it could be a natural step for us to pull in that regulation into the Net Zero Marketplace. We're preparing by staying close, lending our voice and point of view to move those regulations forward, and working closely across our accounting, finance, and general availability teams to ensure we have well-informed positions on those.
The demand in this industry has skyrocketed. How do you account for that, and the infrastructure needed to address all those potential transactions?
The momentum we're seeing in the voluntary carbon marketplace is really inspiring. We've got customers around the world more connected than ever to the buyers of carbon credits coming from their projects. The buyer momentum is outstanding as well. It's thrilling to see that more and more companies recognize that being active in the voluntary carbon markets is a way to deliver impact to planet Earth today, especially when it comes alongside emission reduction efforts first and foremost.
We anticipate big growth ahead. Scale has been central to how we think about the design of this marketplace since its inception. That's why we're having it built on a scalable platform like Commerce Cloud with Stripe Inc. as the payment processor, with a wide variety of suppliers ready to deliver to that customer demand and more suppliers being added all the time.