This article was first published on LinkedIn and has been modified for length.
An aspect that frequently gets forgotten in these discussions is that carbon markets have evolved tremendously over the years. Their evolution has been a continuous effort of learning, sharing, debating, and improving by various stakeholders. We think it is timely to share some of this story with a wider audience by reflecting on the past 17 years of the South Pole history.
Since its founding by an ambitious group of social entrepreneurs in 2006, South Pole has constantly been at the forefront of improving market-based mechanisms to solve climate change. Transparency, quality, and scalability were always the main drivers of these innovations – and these same principles continue to drive the work of our +1,200 committed experts today
Our team is united in the common goal of leading a revolution of how we do business within the limits of our planet, prioritizing climate risk, and taking action to reduce our emissions – action that has tangible, measurable benefits for people and communities that have the most to lose, despite contributing the least to the problem.
It all started in a lab…
South Pole started as a spin-off from ETH Zurich – one of the world's most prestigious universities in science and technology – inspired by my and Christoph Sutter's scientific research on sustainability criteria of the Clean Development Mechanism (CDM) projects.
Over the past 17 years, South Pole has innovated, pioneered, improved, and scaled various approaches to achieve its vision of genuine climate impact at scale. Some of these innovations and approaches have not worked, and have offered valuable lessons and ways to improve. Others have scaled and removed or avoided massive volumes of carbon emissions, and brought countless benefits to vulnerable communities.
We've been through a lot in nearly two decades – including the failed 2009 climate negotiations in Copenhagen, after which climate change was no longer top of mind among key policy makers. As the financial crisis hit the global economy, our team also braved the near collapse of the carbon markets, notably the collapse of the UN Kyoto Protocol that resulted in carbon credit prices slipping below US$1 per credit. This put into jeopardy our work and the future financial flows designed to give poorer countries access to green technologies.
Times have thankfully changed, with government commitments through the Paris Agreement, but through all these years we have consistently strived to advocate for higher standards and improved environmental integrity in carbon markets and climate finance.
In this article I aim to outline our team's contributions to getting carbon markets to where they are today: imperfect but effective. Armed with the experience of where we have come from, we hope that those committed to driving finance into climate action will come together to ramp up the speed of improvements in the VCM and beyond.
Improving the effectiveness of carbon markets to finance science-backed climate technologies
From the very beginning, we've been in the business of fighting climate change and engaging in results-based collaborations. The carbon market was (and still is!) a way to facilitate such collaboration: it is accountable and payments are only done based on performance
However, mainly due to the extremely slow response of governments, the private sector and the public to climate change, still today the carbon market is in its infancy. We are proud to have been there from very early on:
In order to shape the market mechanism of the future, South Pole has, since 2007, consistently and vociferously made hundreds of contributions to the continuous improvement and development of methodologies through relevant industry associations, including the International Emissions Trading Association (IETA), the International Carbon Reduction and Offset Alliance (ICROA) and the Project Developer Forum. Here are some examples:
Upholding the environmental integrity of current methodologies, and supporting the development of new methodologies to scale critical, nascent climate solutions remains central to our purpose.
From the get-go, South Pole acknowledged that the VCM is not the 'silver bullet' to solving climate change. Therefore, throughout our journey, we have continuously innovated beyond carbon markets, launching solutions for decarbonisation and climate adaptation.
When it comes to investing in nature specifically, South Pole is a key contributor to global developments and discussions. To name but a few, we are a member of the Task-force for Nature-related Financial Disclosure (TNFD) forum, a solutions partner to the Natural Climate Solutions Alliance convened by the WBCSD and the World Economic Forum, a financial partner to 20*20 – a country-led effort to change the dynamics of land degradation in Latin America and the Caribbean by protecting and restoring 50 million hectares of forests – and we have joined over 1,000 other companies in calling on governments to adopt policies to reverse nature loss in this decade, today.
The future of climate action
What started as a dream of idealistic climate scientists has become South Pole. Our roots may be in Switzerland, but today, our work truly stretches from pole to pole, with passionate experts stationed in over 30 locations, from Bangkok to Bogota. To deliver global climate impact, you need a global team of climate revolutionists.
Our relentless drive to innovate, spur emission reductions, and deliver sustainable development has ultimately earned us the trust of many FT500 companies and world-class investors. South Pole is also recognised by the World Economic Forum's Schwab Foundation as a Social Innovator, and is today considered to be a global leader in climate action.
While it may be foolish to predict the future in these turbulent times, our vision to boost market-based instruments to finance climate action has led us thus far - and we will continue to follow our north star of impact and innovation. It is clear that the world is shifting gear and we are on the precipice of a total transformation of our economies and societies. Through our work, we will continue to pursue positive climate impact at a greater scale so that this transformation happens in time to avert the worst effects of a warming planet, and in a way that is equitable and improves the lives of the world's poorest.
This is what we are all about – and this is what we will continue to be about: innovating fearlessly, improving consistently, and taking action, now.