One company leads all others in carbon removal support

One company is behind vast majority of carbon-removal projects

What you probably already know: Carbon offsets are a key part of many companies’ plans to reach zero carbon emissions by a certain date. One aspect of those plans, however, is a tricky system called carbon removal projects that actively remove carbon from the atmosphere. While these are some of the most effective strategies for truly moving the needle on carbon emissions, they are expensive and there’s really only one company that’s backing them: Microsoft.

Why? The Wall Street Journal took a look at the situation and found that of the top 10 buyers of carbon renewal credits, Microsoft is far and away the largest — to the point where the others barely register. The software giant has purchased more than 8 million tons of carbon removal credits and the next closest buyer, Frontier, which is made up of a group of buyers including Google’s parent company and consulting firm McKinsey, is less than 1 million. Those credits come with a significant sticker price: Frontier has committed $1 billion in carbon removals by 2030 and has invested about $317 million thus far.

What it means: Microsoft’s efforts have funded the launch of many startups working on carbon removal across the globe. But Microsoft can’t do it alone, and unless other companies step up, these programs will eventually sputter out. One example in the WSJ story is a company called Lithos that uses crushed basalt rock spread over soil to capture carbon dioxide when it rains and releases the minerals in the rock. Funding and backing by investors allows companies like Lithos to convince the farmers and quarries to work with them and gives them legitimacy. But, as more companies come under fire from investors for their environmental policies, investments like this will face increased scrutiny.

What happens now? Boards and business leaders should understand the difference between carbon removal and carbon offsets, and be prepared to defend the company’s stance on its support for these various projects. There are companies like CUR8, Patch and CarbonX that match corporate buyers with carbon projects and can manage the processes. But boards, in particular, should understand the company’s policy and pledges that have been made. Increasingly, shareholder lawsuits are targeting these kinds of initiatives.

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