Peeling Back the Curtain on Joro’s Carbon Portfolio
TL;DR: Joro’s Net Zero Membership allows you to automatically offset everything you buy. But every offset project has its strengths and weaknesses, and it takes diligent research and innovative thinking to build a portfolio with real-world impact.
Recently, we sat down to peel back the curtain on how Joro picks carbon offset projects, which ones made the cut (and which ones didn’t), and why a portfolio approach is so critical. You can watch the full conversation HERE.
Sanchali Pal (@sanchalipal) is the Founder & CEO of Joro. Prior to Joro, Sanchali worked on sustainable development in East Africa and South Asia at Dalberg, where she saw firsthand the devastating effects of the climate crisis for vulnerable populations, and at Tesla. Sanchali holds a BA from Princeton and an MBA from Harvard Business School.
Na’im Merchant (@naimmerchant) is a member of Joro’s Expert Advisory Board and advises think tanks, non-profits, and companies on carbon dioxide removal technologies and shaping carbon markets to drive scale. In his climate work, Na'im leverages his prior experience living and working in Malawi and Liberia, helping to equitably strengthen health systems and the health workforce.
Sophie Janaskie (@sophiejanaskie) is a product and data intern at Joro, and completing her MBA at the Stanford Graduate School of Business. Sophie also holds a master’s and bachelor’s degree in environmental management and environmental engineering from Yale University, with a focus on the intersections of business, climate, and technology.
Introduction: Demystifying Net Zero Language
Sanchali: Before we dive into the details of the carbon portfolio, I want to cover some big topics on people’s minds. To start with:hat is a carbon offset? Is that the same, or different from carbon removal? And how important are they to hitting our global climate targets?
Na’im: Carbon removal is a big topic. Sometimes you’ll hear it referred to as carbon dioxide removal, negative emissions, or CDR. It is the process of removing carbon dioxide from the atmosphere. That can involve a number of approaches, from nature-based approaches like growing forests to remove CO2 from the air, or technological ones, like building machines that suck CO2 from the air and bury it underground.
Carbon offsetting is an action or project that can compensate for the emissions you create through your daily activities. Carbon offsets can include carbon removal projects, but currently that’s just a small percentage.
Globally, we emit 35 billion tons of carbon emissions annually by burning fossil fuels, so the key to reaching net zero by 2050 is reducing that as much as we can. But some industries and activities are hard to decarbonize entirely, like steel and cement, and that’s where carbon offsets come in.
It’s important not to think of carbon removal as a silver bullet. It doesn’t absolve us from responsibility; we have to reduce emissions.
But it’s a tool in the toolbox to compensate for hard to avoid emissions at a personal level or for certain industries as a whole.
What Does it Mean to Get to “Net Zero?”
These days, we’re hearing lots of companies make net zero commitments. And this whole conversation is about people making net zero commitments. What does it mean to go net zero? And why do some people say it’s not enough?
Sophie: Net zero means balancing your emissions with reduction and removal. For people, that means making behavioral changes to reduce your personal emissions as much as possible, and offsetting the part of your footprint that’s not yet possible to reduce.
The International Panel on Climate Change (IPCC) has stated that to avoid the most disastrous impacts of climate change, we need to keep global temperature rise below 1.5ºC (2.7ºF). And they say we need to reach net zero emissions by mid-century, around 2050, to do so…
There are a number of pathways to get there, and balancing our carbon budget is essential. But a sole focus on carbon - to the exclusion of other key factors like health, resilience, adaptation, and economic opportunity - won’t create the sustainable, healthy, just world we aspire to. Which is why how we reach net zero is such an important conversation to have.
Joro’s Carbon Portfolio
Sanchali: Not all offsets or carbon removal projects are created equal. That’s why we created Joro’s Carbon Portfolio. Instead of picking just a single project for people to buy into, we constructed a portfolio of different carbon removal projects with different risk profiles to have what we think is the highest impact per dollar.
Can you talk a bit about what it means to support a portfolio of carbon offsets, and why Joro took that approach?
Na’im: It was critical to build a portfolio anchored in best practices. Oxford University has published guidance on how to approach offsetting with an eye towards quality, called the Oxford Offsetting Principles. That guidance is twofold:
First, it shifts away from traditional offsets that focus on emissions avoidance, to focus on those that go a step further and actually remove emissions. Second, it advises that over time it’s necessary to shift from less durable, impermanent carbon solutions to ones that might store carbon away for a hundred years or more.
Joro’s Carbon Portfolio focuses on carbon removal solutions consistent with that first principle, but also introduces more permanent solutions like biomass and underground storage.
A portfolio approach allows for the inclusion of nature-based solutions and technology-based solutions with varying levels of permanence and measurability. This allows us to support a whole range of good ideas across the entire spectrum of carbon removal solutions.
It also gives us an opportunity to learn from our experience with each provider and solution so we can continue to tailor the portfolio over time.
Sanchali: The portfolio language from Oxford was helpful because it borrows from theories we’ve had in finance for so long. You don’t put your life savings into a single stock if you want to get a return by, say, 2050, because it’s not a good investment strategy. Different investments have different risk profiles and different chances of return, so you build a balanced portfolio that considers the timeline that you care about.
In the climate space, we can get stuck on debating whether, say forestry or direct air capture is the best. But they’re different. They have different strengths, timelines, and return profiles. It makes sense to think about what we’re trying to achieve - and on what timeline - and balance the risk to do that.
The Portfolio Breakdown
Joro’s Carbon Portfolio supports the mix of offset projects we need to reach net zero by 2050. Our inaugural portfolio is balanced across forestry, soil, and bio-oil injection and supports meaningful carbon removal at an overall price of $20 per ton.
66% Forestry: Our forestry projects work with landowners in Papua New guinea and Peru to prevent deforestation and benefit local communities. Read our Forestry Primer to learn more.
33% Soil Carbon: Joro supports two US-based regenerative farming projects that demonstrate the economic opportunity for carbon sequestration for farmers. Read our Soil Primer to learn more.
1% Bio-Oil: By working with Charm, a bio-oil injection project, we support a promising permanent storage solution in its early stages. Read our Biomass Primer to learn more.
Joro’s Carbon Portfolio Selection Criteria
How did Joro source and evaluate carbon offset projects, and why did we pick the projects that we did?
Sophie: When we embarked on this process, our goal was to enter it like skeptics and conduct as comprehensive a process as possible. We evaluated dozens of different project types across the spectrum. After doing initial research and calls with various providers, we developed a set of evaluation criteria that analyzes each project through a vigorous lens.
The first criteria is integrity; this includes verifiability and transparency. Do we have insight into project documentation? How openly available is this information so we can really do our due diligence?
The second is transformative potential; By supporting these projects, are we contributing to building the just, healthy, and sustainable future that we aspire to? This includes ideas that have the potential to catalyze efforts moving forward, community benefits, and ecological benefits.
Sanchali: Companies like Stripe, Shopify, and Microsoft have made large announcements about carbon removal portfolios in recent months. And while we followed a lot of similar criteria, we also had this bucket of transformative potential, that’s not as common in other selection processes.
Could you talk about why we considered innovation and equity, and what was difficult about that?
Na’im: We had a real desire to think outside the box. Businesses and individuals need to go beyond just negating their carbon ledger, they need to catalyze broader change… What Joro did was look at less common criteria, the first being innovation. In what way was a project moving the carbon removal field forward?
Regardless of which method of carbon removal people prefer, I think we know it’s going to play a meaningful role to get to net zero. And innovations can help reduce the cost or improve the quality or performance of carbon removal. [Our partners] needed to be able to demonstrate they were doing it in a way that was going to make it available to the broader field… so that we can scale up carbon removal more effectively in the future.
Sophie: I’ll touch on the other point that is really important here as well, which is equity. It’s not just about what benefits are coming out of the project, it’s about how the project is involving, engaging, and partnering with local communities through their work. Climate change has, and will have, an increasingly inequitable impact on vulnerable populations. Our solutions need to involve those populations as part of the process.
With each project, we made a point to try to understand not only how local actors are benefitting, but how are they involved? Investing in carbon removal isn’t just an opportunity to get carbon out of the atmosphere; it’s an opportunity to address long standing inequities to help shape our society to be more just and equitable.
Looking Forward: The Future of Joro’s Carbon Portfolio
Sophie: Throughout this process, we had the opportunity to talk to folks doing really interesting work across a multitude of dimensions and project types. A number, for various reasons, weren’t a logical fit for the Joro portfolio just yet. They may have been too early-stage or didn’t have robust verification processes yet, for instance… They’re exciting projects that we have our eye on for the future.
Na’im: To build on that, I think it’d be great to see more provided that are in the engineered space. Unfortunately, we really depend on nature to do a lot of the hard work. But there are early-stage technology solutions that aren’t quite ready yet, because the supply of those technologies is so thin.
It’d be wonderful for future portfolios to increase that share while staying in consensus with the Oxford Principles. Permanent and engineered solutions have a lot of drawbacks that need to be studied and understood, but they also have important benefits we need to learn more about.
Sanchali: Absolutely, and that’s something we’re really excited to do as part of this work on the general carbon portfolio. We aggregate demand across many users to make big purchases, but we deliberately don’t make purchases that are too large. That way, we can return and rebalance the portfolio with the best available projects every month.
I’m also excited to continue moving the needle on equity and justice with the next few portfolios. After a few quarters of us asking lots of questions, perhaps some of the providers will even have better data and be able to share it with the broader community.