A Comprehensive Guide

to Designing Efficient
Net Zero Strategies
Best Practices
in U.S. Corporate
Decarbonization

www.climatetrade.com
 In the world of decarbonization,
there is only one goal – achieving Net
Zero emissions by 2050 to avoid a
climate catastrophe. And yet, there
seem to be as many decarbonization
strategies as there are companies on
this planet. ClimateTrade was one
of the first technological platforms
designed to support companies’
decarbonization, and we have a seat at
the table in various public and private
initiatives to standardize definitions
and requirements around this common
goal – including the Climate Chain
Coalition, the Taskforce on Scaling
Voluntary Carbon Markets or the
International Chamber of Commerce’s
working group on Carbon Pricing
Principles. Because of that, we are well
placed to enumerate and instruct upon
different approaches to achieving Net

F. B e n e d i t o Zero, identify best practices and advise

companies on how to take the next – or
the first – step towards decarbonizing
their operations. In this white paper,
CEO, ClimateTrade zooms in on the U.S.
ClimateTrade market, with all its technological
capabilities, contradictions, and
potential. I hope you’ll enjoy it and join
us in the conversation.

2 ClimateTrade ClimateTrade 3
 Foreword
by Michael Green, U.S. Business and
Policy Advisor, ClimateTrade

As we look to the future, there is great come from, businesses can reduce their made by the federal government in are further paving the way for these
uncertainty on how our economy, busi- carbon footprint by deploying new te- recent months. The Inflation Reduction goals to be achieved.
nesses and political landscape will be chnology and changing processes and Act, passed in August, and Infrastruc-
shaped by climate change. For all of the procedures. For emissions they cannot ture Investment and Jobs Act, enacted This white paper aims to provide a
above, this crisis represents a massive decarbonize due to lack of technology last November, invest in low-carbon conversation starter for businesses who
risk. This is why business leaders inclu- or cost, businesses can support verified technology and energy sources. It’s are either just starting this journey or
ding Amazon, Apple, Hilton, Lyft, Micro- emissions reduction projects, a process pivotal for businesses to now do their are looking for the next step to take. By
soft and many others have issued a rally known sometimes as purchasing car- part and work. making the conversation more acces-
cry for action and increased ambition. bon credits. sible and less convoluted, we hope to
By focusing on their own contributions According to the U.S. Senate’s own provide an overview to the evolving
to this issue, businesses can move In this document, we lay out several of review, the U.S. could be on track to re- landscape of decarbonization strategy.
towards a more sustainable future whi- the key decisions a business must make duce overall national emissions by 40%
le safeguarding their future operations. to decarbonize, what the available op- by 2030. While this progress should be
tions are and how it can move forward celebrated if reached, it still will come
Developing a climate change mitigation to achieve sustainable and positive en- up short of what the scientific com-
plan requires a company to first un- vironmental impact, while continuing munity says must be done to mitigate
derstand its environmental impact by to grow. the effects of climate change. This gap
measuring and transparently reporting makes it clear why business action is
this in a way that supports a plan to ac- American businesses now have the so crucial. By making a concise plan to
tion. Once they grasp where emissions opportunity to build on the progress reduce emissions, private sector leaders

4 ClimateTrade ClimateTrade 5
Table of Contents
Introduction 09
The Basics: How to Decarbonize 10
a Company’s Operations
1. Calculate 12
a. Scope 1, 2 and 3 12
b. GHG Methodology 14
c. Life Cycle Assessment 15
2. Reduce 16
a. Marginal Cost of Abatement 17
b. Green Energy 18
c. Other Reduction Measures 20
3. Offset 22
a. The State of the Carbon Market in the U.S. 24
b. How to Offset in the VCM 26
c. The Importance of Traceability 28
Net Zero in Action 30
1. Climate Pledge Terminology 32
2. Beyond the Smokescreen 33
3. Top U.S. Players 34
Decarbonization by Sector 36
1. Banking 38
2. Tourism 40
3. Technology 42
4. Food 44
About the Authors 46
 Introduction
As the world’s largest economy, the Uni- An even greater percentage (70%) think
ted States has the power and influence corporations should do more against
to lead the world towards Net Zero, global warming (Yale Climate Opinion
should it choose to do so. And yet, the Maps).
country is still lagging far behind others
in terms of climate ambition. Today, Climate change is accelerating and our
despite President Joe Biden’s attempts window of opportunity is closing. And
to make climate action a priority, the while politicians bicker, the private sec-
country remains the second-largest tor across the globe has taken action,
emitter of greenhouse gases (GHG) through innovation and investment
worldwide. In 2021, the President an- in decarbonization. U.S. companies
nounced a national target to reduce cannot wait for regulation to force
emissions by at least 50% by 2030 com- them to mitigate their impact on the
pared with 2005 levels, and to reach Net climate: shareholders, staff members
Zero by 2050. But the U.S. ranks only and consumers all expect them to
14th out of 32 countries in KPMG’s take action now. Already, 30% of U.S.
Net Zero Readiness Index – behind consumers say they spend more (or
nine European countries, Japan, Cana- are willing to spend more) on products
da, New Zealand and South Korea. that are better for the environment
(EY). With eco-consumerism on the rise
Yet, public opinion is pretty unanimous: and the looming implementation of
69% of American adults want their a carbon border adjustment mecha-
country to take steps to become car- nism in Europe, implementing a Net
bon-neutral by 2050, according to Pew Zero strategy will soon be a matter of
Research. But they don’t expect all the maintaining competitiveness in do-
effort to come from the government. mestic and global markets.

8 ClimateTrade ClimateTrade 9
The Basics:
How to
Decarbonize
a Company’s
Operations
In order to take effective climate action
and avoid greenwashing claims, it is
crucial that U.S. companies follow best
practices in terms of disclosures and
target setting. According to NewClimate
Institute, best practices include annua-
lly disclosing emissions in a clear and
understandable format and providing
a breakdown of emission sources with
historical data for each source.
1.5°C-compatible trajectories or ben-
chmarks for the sector, as their main
headline pledge.
Set interim targets that are aligned
with the long-term vision in terms
of depth and scope, with the first
target on a timescale that requires
immediate action and accountability
(maximum 5 years).

As for target setting, the Institute states This chapter goes through each step of
that companies should: the corporate decarbonization process,
from GHG calculation to reduction and
Explicitly state that their targets cover offsetting, helping readers gain a better
all scope 1, 2 and 3 emissions, as well understanding of what target setting
as non-GHG climate impacts where may involve for different businesses.
relevant.

Set a specific emission reduction

target that is independent from
offsetting claims, and aligned with

ClimateTrade 11
1 Calculate
The carbon footprint is the sum of all
the greenhouse gases a person, com-
pany or even country releases into the
atmosphere, expressed in CO2 equiva-
lent or CO2e (the number of metric tons
of CO2 emissions with the same global
warming potential as one metric ton of
another greenhouse gas, calculated by
multiplying the mass of that gas in tons,
by its global warming potential). Calcu-
lating it is a necessary step in comba-
ting climate change at corporate level.
Carbon emissions are divided into three
categories, or “scopes”.
12 ClimateTrade
Scope 1
Scope 1 emissions are those genera-
ted by a company’s own operations.
For oil and gas companies, scope 1
represents a very large share of the
carbon footprint. Their core activities
of drilling, extracting and refining petrol
and natural gas release large amounts
of greenhouse gases into the atmos-
phere. In contrast, service-oriented
companies, such as banks and finan-
cial institutions, tend to have small
amounts of scope 1 emissions, since
they work in offices and don’t use pollu-
ting processes to make their products.
Scope 1 emissions also include fuels
burned in vehicles operated by a com-
pany. If a company operates a fleet, it
needs to calculate the emissions rela-
ted to transportation fuel by checking
whether engines are combustion or
electric and assessing the distance they
run every year.
Scope 2
Scope 2 emissions stem from a com-
pany’s energy use for electricity, hea-
ting and cooling. All sectors require
electricity to operate, so all companies
need to calculate scope 2 emissions.
Starting with power supply, a company
Scope 3
Scope 3 emissions include those
generated by providers and clients in
the life cycle of a product or service.
For oil and gas companies, while the
extraction and refining of the raw mate-
rial belongs to scope 1, the combustion
needs to ask: of these products in everyday activities
such as driving or cooking are part of
How much power comes from re- their scope 3 emissions.
newable sources?
Not all companies include scope 3
How much comes from fossil fuels? in their assessment, arguing they are
largely out of their control. Yet, scope 3
How much power does the company
coverage is considered a best practice,
use for its operations on a yearly
and will undoubtedly become the norm
basis?
in the future, because it incentivizes
decarbonization throughout supply
This will help to assess how much
chains.
carbon footprint comes from electricity.
The same exercise applies to heating
or even cooking. Companies often use
natural gas for these activities, so it is
important to calculate the emissions
related to them.
ClimateTrade 13
 Life Cycle Assessment
As much as a company tries to reduce
its carbon footprint, there will always
be parts of a product or service’s lifes-
pan that create a negative impact on
the planet. That’s why on top of asses-
sing corporate emissions, many compa-
nies choose to calculate GHG emissions
along the entire life cycle of a product
or service, from concept to withdrawal
from the market. This process includes
totalling the emissions associated with
the extraction of raw materials, trans-
port and manufacturing processes all
the way to sale and disposal.
Performing a life cycle assessment
(LCA) is a great way to get an overview
of an offering’s carbon footprint and
identify areas where it could be redu-
ced, but it also makes it easier to create
a benchmark of GHG emissions per pro-
duct, allowing consumers to compare
different brands. The GHG Protocol also
offers a Product Life Cycle Accounting
and Reporting Standard to support
these efforts.

GHG
Calculation
Methodology
Most companies use the methodology
of the Greenhouse Gas Protocol to cal-
culate their emissions. The first edition
of this standard was published in 2001
after a decade of international coopera-
tion. In 2016, 92% of Fortune 500 com-
panies reported using this standard for
carbon emissions calculation.
The GHG Protocol offers several rele-
vant methodologies. The Corporate
Accounting and Reporting Standard is
its generic guidance for companies and
other organizations preparing a cor-
porate-level GHG emissions inventory,
while the Corporate Value Chain Stan-
dard focuses on scope 3 calculation
and reporting.

14 ClimateTrade ClimateTrade 15
2
Reduce
With a clear picture of a company’s
climate impact, it is possible to take
measures to reduce it. These generally
include switching to a renewable power
provider, lowering operations’ energy
intensity or using recycled materials.
16 ClimateTrade
Marginal Cost
of Abatement
The marginal cost of abatement is a
way for companies to calculate the fi-
nancial repercussions of reducing their
environmental impact – their carbon
and water footprint, for instance. To
create a marginal abatement curve,
companies must assess carbon emis-
sions across their operations, identify
actions they could take to eliminate
them, and rank them in order of cost
per ton of carbon abated.
For example, the abatement cost of
switching from a conventional car to
an electric one depends on the cost of
gasoline, battery-electric vehicles and
maintenance at a given time. In 2020,
Global GHG abatement cost curve beyond business-as-usual (2030)
with oil at US$30 a barrel, this abate-
ment cost stood around US$56 and
US$113 per ton of CO2 (IEA).
At a company level, building this curve
allows directors to visualize the cost of
decarbonizing their business, and to
choose the most cost-effective measu-
res. On a global level, the widespread
use of marginal abatement curves has
made it clear that beyond carbon ta-
xes, switching to renewable energy and
improving the energy efficiency of buil-
dings are the most cost-effective ways
to cut emissions.
In 2007, McKinsey & Company develo-
ped a marginal abatement curve for the
U.S., which revealed that the country
could reduce GHG emissions in 2030 by
3 to 4.5 gigatons of CO2e by pursuing “a
wide array of abatement options with
marginal costs less than US$50 per ton”.
Source: McKinsey&Company, 2009
ClimateTrade 17
 Green
Energy
Switching to renewable energy is per-
haps the most effective way to reduce
carbon footprint. Corporations of all
sectors are signing supply agreements
with wind and solar power providers at
an increasingly impressive rate. Intel,
Kohl’s, Walmart, Apple and Estee Lau-
der are just a few of the brands that
claim to source 100% of their electricity
from renewables.
Once considered too expensive, re-
newable energy is now cheaper than
conventional power from fossil fuels.
As new capacity was installed at an
incredibly fast pace, the cost of genera-
ting electricity from solar or wind ener-
gy dropped dramatically in the past
20 years. Data from the International
Renewable Energy Agency indicates
that utility-scale solar PV projects have
recently won competitive procure-
ment processes at an average price of
18 ClimateTrade
US$0.04/kWh – around 27% less than
the cheapest fossil fuel competitor,
namely coal-fired plants, at US$0.015/
kWh.
Increasing the share of renewables in
the energy mix not only lowers costs
and reduces carbon footprint, but it
can also hedge a company against
price volatility resulting from market
disruptions. The Russia-Ukraine war
is a recent example, having led to a
natural gas price increase that drove
wholesale electricity prices throughout
the United States up between 13% (in
the Southwest region) and 135% (in the
New York region) in the first half of 2022
(EIA). As the weather becomes more
and more unpredictable, energy supply
disruptions will also become increa-
singly common, making it all the more
important for businesses to protect
themselves now.
At the time of writing this White Paper, the
Senate has passed the Inflation Reduc-
tion Agreement 2022 bill, which invests
US$369B of tax dollars for climate and
clean energy programs. The bill sets the
audacious goal of making the U.S. energy
self-sufficient and to protect its citizens
from inflation in a more unpredictable
world. This is the most ambitious climate
bill ever passed in the country, and will
forever change its energy landscape,
making renewables the primary source of
electricity. The bill is projected to lead to a
40% reduction in GHG emissions by 2030
(from a 2005 baseline).
ClimateTrade 19
 Other
Reduction
Measures
There are many other strategies to
reduce the carbon footprint of a com-
pany, and it is up to their leaders to
determine which are best suited to their
specific case. Amongst others, reducing
the frequency of business trips, setting
up group transportation for employees,
switching to electric vehicles, recycling
waste, sourcing low-carbon materials
and incentivizing providers to lower
their own emissions are all valid ave-
nues to reduce the carbon footprint as-
sociated with a company’s operations.

Calculating carbon footprint in detail

allows businesses to map potential
reductions and to draw their own mar-
ginal abatement cost curve, mitigating
decarbonization risks.

20 ClimateTrade ClimateTrade 21
3 Offset
Carbon offsetting is the process of
purchasing carbon credits generated by
CO2 absorption projects (which can in-
clude renewable energy, reforestation,
waste management, etc.), to make up
for a company or person’s emissions.
Despite a company’s best efforts to
reduce carbon emissions at the source,
it is currently very unlikely to be able to
bring its footprint to zero at this time.
As seen above, abatement measures to
mitigate the environmental impact of
carbon, waste, water and transporta-
tion have a cost, and for some techno-
logies, this cost is prohibitive.
In certain industries, including airlines
and cement, there simply isn’t a ze-
ro-carbon alternative available yet, and
this has repercussions for the decarbo-
nization efforts of most sectors. Until
zero-carbon materials become the
22 ClimateTrade
norm, offsetting hard-to-abate emissions
will remain the best way to ensure the
world continues to move towards net
zero in order to stop climate change.
And yet, carbon offsetting is sometimes
perceived in a negative light. Critics
argue that it is difficult to ensure that
the money spent on carbon offsets by
companies or individuals actually trans-
lates into carbon removals. Some go as
far as calling the carbon market a ‘wild
west’ where the lack of regulation means
offset sellers and buyers can easily abu-
se the system. This is a simplistic and
shortsighted school of thought.
This chapter explains how to navigate
the voluntary carbon market and mitiga-
te these perceived risks, because despite
criticism around carbon offsets, doing
nothing is simply not an option.
ClimateTrade 23
 The State
of Carbon
Markets in
the U.S.
There are two types of carbon markets
in the world: mandatory (or complian-
ce) markets are regulated by govern-
ments, which issue emissions allowan-
ces or permits to be traded between
companies included in the scheme
(usually big polluters) to offset each
other’s emissions; whereas in unregu-
lated voluntary carbon markets (often
referred to as VCM) companies and
individuals purchase carbon credits
generated by sustainable development
projects to offset their emissions volun-
tarily.
Mandatory markets do exist in the U.S.,
but are limited to specific states or
sectors. The Regional Greenhouse Gas
Initiative (RGGI) was the first cap-and-
trade program that became operational
in 2009 to limit carbon dioxide from
the power sector. It currently inclu-
des 12 states: Connecticut, Delaware,
Maine, Maryland, Massachusetts, New
Hampshire, New Jersey, New York,
Rhode Island, Vermont, and Virginia;
and Pennsylvania which joined in 2022.
The scheme requires fossil fuel power
24 ClimateTrade
plants with capacity greater than 25 MW to
obtain an allowance for each ton of carbon
dioxide they emit annually. Between 2008
and 2018, it led to a 48% decrease in an-
nual average CO2 emissions from electricity
generation.
In 2013, California began operating its own VCM, carbon credits are issued by standards Framework to be issued in Q3 2022.
cap-and-trade program, establishing a
declining limit on emissions from 450 enti- tion projects must have in order to generate the issues preventing the widespread
ties representing about 85% of the state’s
total GHG footprint. The program covers
electricity generators and large industrial fa- bon Standard (VCS or Verra), the Gold Stan- The Importance of Traceability).
dard, the American Carbon Registry and
the Climate Action Reserve – each with
slightly different requirements.
This lack of standardization is the sour-
ce of much criticism in the VCM, and
limits its potential. In a 2022 paper, the
International Swaps and Derivatives
Association (ISDA) notes: “To increase
trading volumes in these markets, it
is necessary to safeguard the integrity
and soundness of the registries, and
establish transparent standards for
eliminating double counting of credits
to ensure these credits are not claimed
by multiple parties once applied or
retired.”
cilities emitting 25,000 metric tons of CO2e
or more annually, as well as distributors of Several international organizations
transportation, natural gas and other fuels. are trying to establish transparent
standards for the VCM: for instance,
Aside from these two programs, the U.S. the Integrity Council for the Voluntary
carbon market is largely voluntary, with Carbon Market is consulting on Core
no direct regulatory oversight. In the Carbon Principles and an Assessment
that “regulate” the attributes carbon mitiga- But until consensus is found, many of
credits. In the U.S., some of the most esta- adoption of voluntary carbon offsetting
blished standards include the Verified Car- can be solved through technology (see
ClimateTrade 25
 How to Offset Companies can purchase verified emis-
sion reductions directly from the de-
velopers of sustainable projects, from
with suitable projects, and the carbon
credits are not immediately available
upon purchase.
bon credit vs the broker fee. Additionally,
reports have suggested that brokers
sometimes charge companies almost
in the VCM brokers or from dedicated platforms.
Many project developers work with
three times as much as they pay project
developers, abusing their power as the
When buying directly from the orga- brokers to arrange the sale of their middleman and defeating the purpose
nization responsible for a project, a carbon credits. In this case, a company of climate finance.
company has two choices: it can either gets in touch with a broker and gives
invest in the development of the project them specifics about the type of project Increasingly, companies are choosing
with a promise of return in the form of it is looking for (location, price, etc.). to purchase their carbon offsets on de-
future carbon credits, or buy what are The broker finds a suitable project, then dicated technological platforms that
called Emission Reduction Purchase purchases carbon credits on behalf of combine the positive impact of buying
Agreements (ERPAs) – upfront payment the company and resells them to it with carbon credits directly from the deve-
for carbon credits to be delivered as a mark-up. This option can seem more loper with the practicality of using a
and when they are generated. practical than dealing directly with a broker. For instance, on the ClimateTra-
project: as a service provider, the broker de marketplace, users can browse more
Buying from developers provides a handles all transactions. than 60 certified projects categorized by
deep understanding of the project type, country and even Sustainable De-
and helps to secure lower prices than But there are some significant downsi- velopment Goal, and choose the carbon
with a reseller. At the same time, it des to take into account: brokers rarely offsets most suited to their expectations.
requires a certain amount of research disclose their pricing structures, so the-
and knowledge to identify and engage re is no clarity on the price of the car-

26 ClimateTrade ClimateTrade 27

Spotlight Located in the Orinoco river basin in
Colombia, the Vichada Climate Refores-
tation project combines reforestation
on Impact: for sustainable timber production with
biodiversity protection and ecosystem
Vichada restoration. The resulting forests offer
habitat for native plants and animals,
Climate enrich the soil, save and filter water,
and help mitigate the greenhouse
Reforestation effect. Since 2007, Vichada has mitiga-
ted more than 835,000 tons of CO2
– that’s equivalent to removing 180,000
Project cars from the road for an entire year!
28 ClimateTrade
Benefits
Carbon removal
Forest conservation
Ecosystem protection
Income generation
for local communities
Job and training opportunities
for local workforce
Certified SDG impacts:
SDG 12 (Responsible Production
and Consumption)
SDG 13 (Climate Action)
SDG 15 (Life on Land)
The
Importance
of Traceability
Because the voluntary carbon market
notoriously lacks transparency, it is
crucial to make sure that companies’
offsetting activities are traceable. Bloc-
kchain technology makes it impos-
sible for data to be manipulated or
duplicated. Applying this technology
in carbon markets can ensure the inte-
grity of carbon offsetting transactions,
guarantee that money actually reaches
carbon reduction projects, and make
it easier for companies to meet ESG
reporting requirements.
For instance, after each transaction
concluded on ClimateTrade’s block-
chain-based platform, users automati-
cally receive a personalized certificate
with information about the project that
generated the carbon credits, and a
unique blockchain key.
Making transactions transparent and
traceable is the only way to ensure
the long-lasting positive impact of
carbon offsetting – which can go far
beyond decarbonization. For instance,
companies should look for added com-
munity benefits and alignment with the
Sustainable Development Goals (SDGs)
when selecting carbon offsets.
ClimateTrade 29
Net Zero
in Action

Since the signing of the Paris Agreement There are several reasons to make this trends make it abundantly clear com-
in 2015, the number of companies an- type of public commitment. Sharehol- panies that do not address their climate
nouncing Net Zero pledges has grown der activism has increased dramatica- impact will have little to no access to
exponentially. According to the Net Zero lly since Blackrock CEO Larry Fink made funding in the future.
Tracker, 743 (more than one-third) of headlines by equating climate risk with
the world’s largest 2,000 publicly-tra- investment risk in his 2020 letter to Sustainability action is also becoming
ded companies have committed to CEOs. The first half of 2022 saw a record a significant element in attracting and
transitioning to Net Zero by 2050 or 282 corporate shareholder votes on retaining talent. A 2020 Gallup survey
earlier. This number is up from just environmental, social and governance revealed that 69% of workers see a
about one-fifth of companies in Decem- (ESG) disclosures and action, with 34 company’s environmental record as a
ber 2020. Nearly 150 of those are U.S. resulting in majorities (Sustainable In- factor in wanting to work there or not,
companies, including Walmart, Amazon, vestment Institute). Of these majorities, and climate commitments and actions
CVS Health, ExxonMobil, AT&T, Alphabet 14 were related to environmental and have been recognized as driving emplo-
Inc (Google’s parent company), Chevron, climate resolutions. yee retention and engagement.
Verizon, Bank of America and many
others. According to NGOs, as of March 2022 It is becoming clear that committing
more than 1,500 financial institutions to climate action gives firms a com-
When adding carbon neutrality (45), representing over US$40 trillion in petitive advantage. It lowers costs,
carbon negativity (2), zero emissions assets have committed to at least makes them more resilient in the face
(3), zero carbon (3), climate neutrality some level of fossil fuel divestment. of a warming planet and addresses the
(5) and climate positivity (3) pledges, a Meanwhile, investment flows into ESG concerns of their investors, workers and
total of 206 large U.S. corporations have funds keep growing, totaling a record customers.
made a public commitment to no longer US$330 billion in assets under mana-
contribute to climate change by 2050. gement in 2021 (Harvard). All these

ClimateTrade 31
 Deciphering Climate
Pledge Terminology
Climate pledges come in all shapes and sizes, but here are some
basic definitions to help readers navigate them.
Net Zero (Carbon): Reducing car-
bon (or GHG) emissions as much
as possible and balancing out the
remaining emissions with offsets
and removals.
Carbon neutral: Fully compen-
sating carbon emissions from a
company’s activities through CO2
removals or offsets — without
necessarily attempting to reduce
them first.
Climate neutral: Fully com-
pensating GHG emissions from
a company’s activities through
removals or offsets.
Carbon negative: When a com-
pany’s carbon removals, internal
and external, exceed its emissions
over a declared time period.
32 ClimateTrade
Climate positive: When a com-
pany’s GHG removals (beyond
carbon), internal and external,
exceed its emissions over a decla-
red time period.
Zero carbon: Reducing all car-
bon emissions to zero, across all
scopes, without using offsets or
removals.
Zero emissions: Reducing all
GHG emissions to zero, across all
scopes, without using offsets or
removals.
Beyond
the Smokescreen
While these pledges are commenda-
ble, not all of them are backed by an
actionable roadmap, interim targets
or reporting mechanisms. A recent
assessment of climate pledges by 25 of
the world’s largest companies by New-
Climate Institute found that on average,
these targets aim to reduce emissions
by only 40%, not 100% as suggested by
the term “Net Zero.” Furthermore, only
three of the 25 companies assessed
have committed to decarbonizing over
90% of their value chain emissions, whi-
le at least five have committed to redu-
cing their emissions by less than 15%,
often by excluding scope 3 emissions,
which are indirect emissions generated
by a company’s value chain.
Five American companies were analyzed
in the report: Amazon, Apple, CVS Heal-
th, Google and Walmart. Amazon is the
founder of The Climate Pledge, a group
of 312 businesses that have committed
to Net Zero by 2040. However, the analy-
sis suggests that Amazon’s claim lacks
transparency and integrity. The company
hasn’t clarified which scopes are cove-
red in its pledge, nor which greenhouse
gases. Additionally, its Net-Zero target is
not currently substantiated with a GHG
emission reduction target.
CVS Health, Google and Walmart recei-
ved similar assessments, while Apple
earned a reasonable transparency rating
and a moderate integrity rating.
ClimateTrade 33
 Top
U.S. Players
The Net Zero Tracker indicates Workday
(tech), Ralph Lauren (fashion), Duke
Energy (power) and ExxonMobil (oil and
gas) are among the American com-
panies with the best-rated roadmaps.
These companies have interim targets,
detailed plans, reporting mechanisms
and the inclusion of at least part of sco-
pe 3 emissions. Less than 50 companies
meet those standards.

Cross-referencing this with other au-

thoritative sustainability trackers, such
as Corporate Knights’ ranking of the
world’s 100 most sustainable compa-
nies or the Carbon Disclosure Project,
shows some of the top players in-
clude Workday (tech), McCormick &
Co (food), Xerox (tech), Salesforce
(tech), Ecolab (sanitation) and HP
(tech).

34 ClimateTrade
Decarbonization
By Sector
This chapter includes a deep dive into
four U.S. sectors, their decarbonization
strategies and opportunities for further
improvement.

ClimateTrade 37
 Banking
For a service-based industry, such as
banking, decarbonizing is mostly fo-
cused on scope 3 emissions, namely
their clients’. And because financing
is necessary for virtually every single
sector of the economy, financial ser-
vices providers hold an enormous
amount of power in incentivizing
global decarbonization.
Banking on Climate Chaos scoring Top 5 performers within Net Zero Banking Alliance
(Projects scores the immediate exclusion of oil and gas projects; Expansion scores the exclusion of compa-
nies with oil and gas expansion plans; Phase-out scores the quality of oil and gas phase-out commitments):
Banking on Climate Chaos scoring All US banks within Net Zero Banking Alliance:
38 ClimateTrade
So what are U.S. banks doing to su-
pport the decarbonization of the eco-
nomy? Bank of America, Citigroup,
Many banks have pledged to phase out JPMorgan Chase, Morgan Stanley, Gold-
funding to fossil fuels – but none in the man Sachs and Wells Fargo are just
U.S. In contrast, American banking sha- some of the country’s signatories to the
reholders overwhelmingly oppose stric- Net Zero Banking Alliance. As such, they
ter fossil fuel financing policies. Wells are expected to set and publicly disclo-
Fargo, Bank of America and Citigroup se intermediate and long-term targets
all put this type of resolution to a vote to support meeting the temperature
in April 2022, but they were only backed goals of the Paris Agreement.
by around 11-13% of shareholders.
The companies should:
Base their targets on widely accep-
ted science-based decarbonization
scenarios.
Establish an emissions baseline.
Annually measure and report the
emissions profile of their lending
portfolios and investment activities.
Regularly review targets to ensure
consistency with current climate
science.
This type of commitment will involve
aligning their investment portfolios
with decarbonization goals at some
point – however long they try to
delay it.
The Securities and Exchange Com-
mission’s proposed climate disclosure
rules, due to be finalized by the end of
2022, will likely force banks to reduce
their emissions.
Meanwhile, the largest U.S. banks have
pledged to allocate large amounts of
funding to climate change mitigation
initiatives over the next 10 years: for
instance, JPMorgan will spend US$2.5T,
while Citigroup has confirmed US$1T.
Still, there is much more that U.S. banks
could do to tackle climate change. Los
Angeles-based digital challenger bank
Aspiration is a good example: on top of
pledging to never fund oil or coal pro-
jects, the firm has launched a debit card
that provides environmental and social
impact information about each pur-
chase a user makes, and allows them
to offset some of this impact with the
planting of one tree.
European banks offer a model as well.
Barclays, BBVA, BNP Paribas and many
others have already achieved carbon
neutrality for their scope 1 and 2 emis-
sions, and are working on innovative
ways to tackle scope 3 emissions.
Earlier this year for instance, Santander
Bank Spain added a new functionality
to its app and web page, allowing users
to access a summary and breakdown of
their monthly carbon footprint. Users
have the option to offset their footprint,
calculated from their card purchases
and direct debits, by contributing to
sustainable projects. The initiative was
the result of a collaboration between
Santander, Mastercard and ClimateTra-
de, which provided the blockchain-ba-
sed marketplace to conduct traceable
offsetting transactions.
Large banks in the U.S. should draw ins-
piration from their smaller competitors
and European counterparts to accelera-
te their transition to Net Zero.
ClimateTrade 39
 Tourism
Sustainability is fast becoming one
of the strongest decision factors for
tourists choosing an airline, travel
agency or accommodation provider. In
Booking.com’s latest annual survey of
30,000 global travelers from 32 coun-
tries, 78% of respondents said they plan
to stay in a sustainable property at least
once in the coming year.
To meet travelers’ expectations and the
goals of the Paris Agreement, the hotel
sector needs to act fast. According to
the Sustainable Hospitality Alliance
(SHA), it needs to reduce carbon emis-
40 ClimateTrade
sions per room per year by 66% by
2030 and 90% by 2050. Most major ho-
tel brands, including Accor, Hilton, Hya-
tt, IHG and Host Hotels, have set emis-
sions reduction targets aligned with
the science-based targets. Hilton has
pledged to cut scope 1 and 2 emissions
by 61% by 2030, and to offset 100% of
scope 3 emissions from its corporate air
travel and rental cars.
But what’s likely to make the most
significant dent in hotels’ carbon foo-
tprint is ecodesign and green construc-
tion materials. Hotel Marcen in New
Haven, Connecticut opened in May
2022 as one of the most sustainable
hotels in the U.S. Benefiting from thick
concrete walls, the hotel also features
triple-glazed windows for insulation,
and its roof is covered with solar panels.
Its chefs use electric stoves rather than
gas. Additionally, the hotel offers 12
electric car charging stations, incentivi-
zing zero-emissions travel to and from
its accommodation.
An increasing number of hotels around
the world give guests the option to
offset the carbon footprint of their
stays: that’s the case of Melia Hotels, a
chain comprising 374 hotels in 40 coun-
tries, which has added a carbon offset-
ting functionality to its rewards program,
using the ClimateTrade API.
Meanwhile, U.S. airlines – by far the big-
gest culprit for tourism’s carbon footprint
– still have a lot of work to meet the goal
of the Federal Aviation Administration’s
Climate Action Plan: Net Zero GHG emis-
sions from the U.S. aviation sector by
2050.
Decarbonization of the aviation sector de-
pends largely on the commercialization of
new technologies such as energy-efficient
engines and zero-carbon fuels (green hy-
drogen being the most promising at this
stage). While these advances are unlikely
to become available this decade, airlines
can already take steps to mitigate their
impact. The most widely used initiative is
to give travelers the opportunity to offset
the carbon footprint of their flights throu-
gh a small contribution to carbon mitiga-
tion projects. Most U.S. airlines, including
Delta Airlines, American Airlines, United
Airlines and Jetblue, offer this service to
their customers.
ClimateTrade 41
 Technology
U.S. citizens are more and more con-
cerned about the link between the
tech sector and climate change. Recent
research by the Harris Poll reveals that
66% of adults are concerned about
the technology industry’s impact on
the environment and 73% believe
the sector has a high obligation to act
against climate change.
Luckily, American tech companies are
leading the sector’s global decarboni-
zation. Tech giants like Google (and its
42 ClimateTrade
parent company Alphabet), Apple and
Workday, a cloud software company,
consistently rank between the world’s
Apple’s global facilities, including retail
stores, offices, data centers and co-lo-
cated facilities in 43 countries, have
In 2021, Accenture, GitHub, Microsoft
and ThoughtWorks – all American tech
companies – launched the Green Sof-
most sustainable companies. been powered by 100% clean energy tware Foundation (part of the Linux
since 2018. Since then, the company Foundation). The organization’s goal is
Since most of the tech sector’s footprint has moved its focus to supporting the to set standards and establish best
comes from electricity use, it makes decarbonization of its suppliers through practices for the building of low-car-
sense that the first priority of these the adoption of renewables. Additiona- bon software. It is clear that the U.S.
companies is to invest in renewables. lly, Apple is a headline campaigner for tech sector is a global leader in decar-
Digital companies accounted for seven the use of green and recycled materials bonization and climate action.
of the top 10 largest corporate purcha- in electronics manufacturing.
sers of renewable energy in 2020, ma-
king up almost half of the renewables Meanwhile, Workday not only reached
purchased globally in 2020, according Net Zero operations in 2020, partly
to the International Telecommunica- through 100% renewable electricity
tion Union. use, it is also one of the first companies
to mitigate its historical emissions.
ClimateTrade 43
 Food
Global food production is responsible
for about a third of GHG emissions –
and the U.S. is a significant contributor.
Agriculture makes up less than 1% of
the country’s GDP, yet it accounts for
11% of its GHG footprint. The biggest
culprit is meat, which is the largest seg-
ment of agricultural production in the
U.S. Cattle is raised in every single state.
By now, the environmental impact of
meat production is well-known, but
while consumption is declining in many
developed countries, it is on the rise in
the U.S.
Manufacturers of meat alternatives
such as Beyond Meat and Impossible
Foods are trying to counter this trend.
The burgers and other products they
offer generate 90% less GHG emissions
44 ClimateTrade
than conventional meat products and use
significantly less water. Because these
companies were born out of a desire to
reduce the negative climate impact of meat
production, they tend to implement a wide
array of sustainability measures. Beyond
Meat uses compostable packaging, water
recirculation systems and solar power,
while Impossible Foods reduces food waste
through innovative processes and powers
its plant with 85% renewable energy. The
popularity of these products is growing in
the U.S. According to a 2021 International
Food Information Council survey, 65% of
American adults have tried them at least
once, 20% eat them at least once a week
and 22% consume them daily.
Beyond reducing meat production, there
are other initiatives the U.S. food industry is
undertaking to minimize its climate impact.
Pepsico is fostering regenerative agriculture
by partnering with select farms. Overall, the
company plans to transition 7 million acres
– about 100% of the land used around the
world to grow crops and ingredients for
its products – to regenerative practices by
2030, eliminating at least three million
tons of GHG emissions.
McCormick & Co, which is consistently
recognized as one of the most sustainable
companies in the U.S., is making progress
towards sourcing all its herbs and spices
sustainably by asking suppliers to meet its
third-party verified Grown for Good stan-
dard. The company is also reducing GHG
emissions across all scopes.
U.S. food producers should follow the
lead of these sustainability pioneers by
reducing their own GHG and water foo-
tprint, promoting regenerative practices
across their supply chains and offering
climate-friendly alternatives to meat.
ClimateTrade 45
 About the
authors
ClimateTrade is a blockchain-based
climate pioneer, aiming to empower
large-scale decarbonization through
constant innovation. The ClimateTra-
de marketplace allows companies to
offset their climate impact transpa-
rently and efficiently by purchasing
carbon, plastic and biodiversity offsets,
as well as renewable energy certifica-
tes or iRECs directly from more than 60
certified projects in over 20 countries.
Available projects include nature-ba-
sed solutions, green energy, commu-
nity development, reforestation and
more, all aligned with the UN Sustai-
nable Development Goals. Blockchain
technology brings unique added value
by guaranteeing full transparency, tra-
ceability, speed and lower costs for all
transactions, while delivering a ground-
breaking user experience.
The ClimateTrade API, Widget and
Whitelabel allow clients to integrate
marketplace functionalities into their
own platform, automatically calculating
the carbon footprint of a product or
46 ClimateTrade
service and giving customers the option
to offset it at or after check-out. Essen-
tially, ClimateTrade’s software solutions
can help clients tackle their scope 3
emissions and support their net zero
strategy.
Offsetting carbon footprint through
ClimateTrade solutions always results
in the issuance of a personalized certifi-
cate with information about the project
that generated the associated carbon
credits, as well as a blockchain key for
traceability. This functionality makes
it easier to report on carbon offsetting
activities and fulfil ESG requirements.
To date, ClimateTrade has facilitated the
offsetting of more than 3 million tons
of CO2. The company is also spearhea-
ding disruptive innovation around the
digital certification of carbon mitigation
projects and supporting the digitization
of national carbon registries.
ClimateTrade 47
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