Digital solutions are key to improving the quality of carbon credits, according to panellists at the Sustainable World Forum. - PHOTO: ST FILE
SINGAPORE: The use of technology can help overcome the complex challenge of achieving environmental, social and governance (ESG) goals while maintaining economic growth, according to panellists at the Sustainable World Forum held on Nov 15.
In the voluntary carbon markets where businesses can use carbon credits to mitigate greenhouse gas emissions resulting from their business practices, digital solutions are key to improving the quality of carbon credits.
Carbon credits are carbon allowances, where one carbon credit represents one tonne of carbon dioxide that has been removed or avoided from the atmosphere.
For instance, satellite photos of rainforests can be used to trace and track deforestation as proof that carbon dioxide is legitimately being reduced, maintaining the integrity of the carbon credits generated. But this could exact costs on the community where such nature-based solutions are located, noted Ms Hum Wei Mei, head of environmental products at Singapore-based AirCarbon Exchange (ACX), which owns and operates carbon exchanges.
This is because for every dollar invested in carbon credits, a certain proportion would go towards verification as well as maintaining the quality and standards of the projects.
Said Ms Hum: “It’s also a question of where companies want that dollar to go. Do they want it to go to the companies that operate the satellites which are probably not owned by the community on the ground, or towards helping a logger switch trades to become a forest ranger or project verifier?”
The transparency of carbon credits came into question after British newspaper The Guardian reported in January that 90 per cent of carbon credits certified by the world’s biggest certifier of carbon credits Verra do not cut carbon emissions into the atmosphere as claimed.
For carbon credits traded on ACX, details such as transactions are recorded in blockchain, with unique serial numbers as proof of identification.
Other forms of data for companies to improve their data disclosures were also discussed during the forum, which was held at Tower Club Singapore in Republic Plaza.
City Developments Limited chief sustainability officer Esther An noted that because “sustainability is still relatively new” to many companies, especially small and medium-sized enterprises, gathering validated data has been challenging.
She added: “This is where artificial intelligence can come into the picture with tools to help us to get reliable data.”
Senior Minister of State for Communications and Information Janil Puthucheary said that the cost-benefit analysis from technology on environmental sustainability “is not clear at this point in time”.
Speaking at a fireside chat with Singapore Institute of International Affairs chairman Simon Tay, Dr Janil said defining sustainability reporting standards would help in and bring about better clarity on the cost-benefit analysis from the use of technology.
“We can foresee that we’re going to end up using more technology in order to achieve those outcomes,” said Dr Janil, citing the example of sensors that have enabled businesses to improve on accountability in sustainable practices and adjust business models accordingly. - The Straits Times/ANN
