Gigaton-scale carbon removal will be necessary to limit global temperature increases to 1.5 degrees Celsius. But so far, the entire carbon removals industry has recaptured only tens of thousands of metric carbon tons from the atmosphere, a far cry from that scale.
Given that gap, more companies are committing to purchase carbon removal credits as part of their net-zero strategies, acknowledging that many emission sources may not have reliable renewable alternatives by 2050.
Tech companies Microsoft, Shopify and Stripe often claim the spotlight for their innovative carbon dioxide removal (CDR) funding, but many smaller enterprises are also accelerating the scale-up. Adyen, a Dutch payment company, and Zendesk, a Danish-American software as a service provider, are two such companies.
Adyen has so far secured carbon removal credits from five CDR projects and will soon announce its second cohort of purchases. Meanwhile, Zendesk is a partner in the Frontier advanced market commitment, joining 15 other companies making multi-year commitments to purchase CDR credits.
Both companies committed to CDR credits to accelerate global climate progress and scale the carbon removals industry. "We’ve been able to see the impact of our purchases beyond just delivering the [carbon removal] tons. We can see the impact the demand signal is having for these companies to grow and scale," said Lena Pyatkovsky, global sustainability manager for Adyen, which reported annual net revenue of $1.4 billion in fiscal year 2022.
Here are three strategies these companies use to guide their carbon removal funding.
Prioritize quality and scalability over offsetting
Neither Adyen nor Zendesk are securing carbon removal credits to directly offset corporate emissions. Instead, both concentrate on backing projects they see as providing long-term removal and sequestration, and that have the potential to scale.
"We really wanted to look at additionality in terms of our involvement in the project, that our financial contribution was catalytic in some way," said Pyatkovsky.
Although Adyen funds its carbon removal credit purchases via an internal carbon tax on employee travel, the monies aren’t used to directly neutralize those emissions. Instead, Pyatkovky’s team targets carbon removal initiatives closely aligned with their sustainability priorities, regardless of the quantity of carbon credits each project could deliver. These priorities include whether a project has geographical relevance to the company’s operations, and the permanence and additionality of the carbon removal method.
Similarly, Zendesk’s carbon removal strategy is about "building societal-level climate progress" toward net zero, said Shengyuan Su, the company’s director of sustainability. Zendesk, which had annual revenue of $1.4 billion before it was bought in mid-2022 by a private equity group, does not count its carbon removal credit funding through Frontier toward its carbon neutral product commitment. Instead, Zendesk’s CDR strategy is about building a path towards global net zero by mid-century, according to Su.
Link carbon removal budgets to other company climate wins
Zendesk’s sustainability team saved the company over $1 million in annual expenses after several years of improving energy efficiency in its product and cloud usage. Those savings became the original basis for the company’s Frontier portfolio investment, Su said.
Zendesk’s product engineering team — one of the departments that underwent the biggest changes to reduce its energy consumption — has become one of the staunchest internal supporters of Zendesk’s carbon removal purchases. That helped build employee engagement in the company’s CDR strategy, according to Su.
Adyen’s carbon removal budget comes from its internal carbon fee on employee travel, a highly visible and trackable source of greenhouse gas emissions. "Between the carbon price, which we anchored at $100 per ton, and the [travel] emissions, we got a pool of funds," said Pyatkovsky. Adyen’s annual report notes that it settled on the per metric ton price based on the UN Global Compact recommendation.
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