As a growing number of companies set targets to zero out their emissions of planet-warming greenhouse gases, many are turning to carbon offsets to lower their climate impact. For example, an airline might buy an offset based on a project that plants trees to absorb carbon dioxide, and count it against its own footprint. But the market is unregulated and many offsets don’t deliver on their climate promises.
London-based startup Sylvera Ltd is trying to boost transparency by assigning ratings to projects, similar to what S&P Global Ratings and Moody’s Investors Service do for debt issuances. So far the company has analyzed about 35 projects and found that nearly half of them don’t deliver what they claim. At least three projects received the equivalent of a junk rating, according to founder Samuel Gill.