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Climate Change

Interview With Calyx Carbon Ratings Founder Donna Lee

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When was Calyx founded?

Calyx was founded in 2021.

What was the initial inspiration for the company?

Donna Lee

Donna Lee

My co-founder, Duncan van Bergen, and I were both watching carbon markets grow from different vantage points and knew there was a real challenge for companies just starting to engage in the market. It can be extremely difficult to understand if “a ton is a ton” without really specialized knowledge. Many companies will not be able to find or afford that expertise.

So what happens is that companies make decisions about how to compensate their emissions with carbon credits that may or may not represent the tons they want to offset.

We saw an opportunity to provide information to the market that could drive higher impact — especially for those companies that truly care about climate change.

How was creating Calyx motivated by your prior experience in climate? 

I’ve been working on climate change for about two decades and one thing that one can’t help but recognize is how narrow our remaining, allowable carbon budget has become — we are in a situation where we must maximize every opportunity to reduce emissions.

Perhaps that is why I was so interested in creating Calyx — the voluntary market is going to continue growing — is there a way to optimize it?

Calyx Global

Would you do anything differently if you were founding the company today? 

I would have started it earlier! We are only, at the end of 2022, just arriving in a place to provide information to the market. Starting in 2021, we brought together experts from a variety of disciplines and took over a year to build our frameworks. In the meantime, I have seen billions of dollars of investments in activities that may not be the best fit for carbon markets. I hope we can change that and move this growing finance to mitigation activities that will have greater impact.

What is Calyx?

Calyx Global is a carbon credit ratings agency that helps businesses choose better carbon credits. The company was founded in 2021 with an objective to drive the voluntary carbon market to higher quality and impact, while offering investors a tool to manage financial and reputational risk. Our mission is: Better carbon markets for people and the planet.

How does Calyx work? 

We provide comprehensive, comparable assessments of carbon credits.

Importantly, we have put in place a governance structure that is also transparent. We have two panels so far: a Greenhouse Gas integrity panel and a Sustainable Development Goals impact panel, both are made up of experts in the relevant fields who oversee our ratings approaches.

Calyx Global, however, is responsible for project-by-project ratings, using the approaches endorsed by our panels. Each rating is peer reviewed and then reviewed by an expert.

We offer several services: Calyx Ratings Service, a subscription to a website where one can see all our ratings, Calyx Project Reports that have detailed information about each rating, and the ability for marketplaces and exchanges to include Calyx ratings, called Calyx Data Integration.

How are Calyx ratings different from other ratings and ratings agencies?

Because each ratings agency has information behind a paywall, it is difficult to make a comparison. What I can say is that Calyx is striving to provide independent, comprehensive, science-based, unbiased assessments of carbon projects.

We offer two separate ratings of carbon credits: a GHG integrity risk rating, and a SDG impact rating. The GHG integrity framework required bringing together carbon methodology experts in various sectors  — from renewable energy and waste to forestry and household technologies such as cookstoves. We went through 10 iterations of the framework as we road tested it with various project types.

The SDG impact framework was also challenging; contribution claims to sustainable development is a relatively new field compared to emission reduction claims. We partnered with Climate Focus to develop this framework, which also took many months to develop.  We are excited to offer this new product to carbon credit buyers.

Where do you hope Calyx is in 3 years and in 5 years?

In three years, I hope Calyx can be a thought leader in the carbon market. We are learning a significant amount by going down to the project level and rating hundreds of projects. Over time, I hope we can share those insights and help shape the market — supporting higher GHG integrity and stronger SDG impact.

In five years, I hope Calyx along with other ratings agencies are an integral part of markets and how they operate. Right now we’re new entities in the space and still trying to figure out how we can best serve our customers, and have a positive impact on the market. Sometimes people ask why ratings agencies need to even exist. I hope in five years this is no longer contemplated and we are seen as an essential part of the voluntary market ecosystem. And that people from all different organizations see ratings as a useful input into their decisions.

Do Calyx ratings affect buying decisions? 

We have seen how our ratings impact the decisions made by our clients, and that is very satisfying. We see both higher interest in higher rated projects, and we also see clients avoid projects where we flag substantial risks.

Are companies willing to spend more on higher quality credits because of the information you provide? 

Yes, some of the companies we have supported have been willing to pay more for higher quality. This is always very encouraging.

Sometimes companies are constrained because they set a budget prior to receiving information we provide. If I had one recommendation to companies, it might be to consider setting a budget for credit purchases after understanding the full range of risks associated with some lower priced credits.

If you weren’t the co-founder of Calyx, what would you aspire to do personally? What do you aspire to do personally as the co-founder of Calyx? 

I had expected to retire by now. But the markets exploded in the past couple of years, and I saw an opportunity to potentially have an impact, so I put off my retirement. If I had not decided to co-found Calyx Global, I would likely be spending more time volunteering in my local community. After a career working globally and at a macro-scale, I have a desire to contribute locally at a micro-scale. There is something satisfying about impacting people at a more personal level. And, I would tend to my garden, which has been horribly neglected since we started Calyx.

What are the most overlooked opportunities in cleantech and climate, in your opinion?

There are opportunities that are currently economically rational, but we’re still not taking them. It’s not sexy stuff, but sometimes I wonder why we aren’t going after the low hanging fruit. For example, opportunities in energy efficiency, planting shade trees to reduce energy use in the summer, or the design of urban spaces. We have a lot of sunshine in Colorado, where I live, but I don’t see many solar installations. Technology can help to solve some of the intractable issues — such as how to capture and store carbon more efficiently — but it can also help solve issues that are simply about optimization, matchmaking, or improved design.

In the carbon offset space, we find that some project types are overlooked opportunities — companies tend to gravitate towards “charismatic” credits, such as projects that focus on nature. But there are many high quality activities, such as improved waste management or biodigesters that provide energy from manure that are often overlooked. These are the insights that we try to provide our clients.

If you could enact some climate policy, what would it be?

Oh, that’s easy. Governments need to put a price on carbon — whether through a tax or trading scheme. There is a real cost to emissions that needs to be integrated into the real economy and government policy is the only way to do this.

My home state of California is doing great work enacting policies that address carbon and climate, but it should be the US government that leads.

Policies around carbon need to be progressive — the wealth disparity in the United States is too large, so any price on carbon should be distributed, and redistributed, in ways that help to close this embarrassing gap.

What motivates you to continue in this work? 

Climate change is the environmental issue of this century. How can one not want to do something about it?  Yvon Chouinard is a model for me. My goal is for Calyx to be a mission oriented company. Someday I will, in fact, retire. When I do so, I hope that Cayx Global has made this world a better place.

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I'm investing in positive companies and am passionate about climate action and long-term human challenges. Early partner at BEAM (United People of Climate Action) and CleanTechnica (#1 cleantech-focused new & analysis website in the world), among others.


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