The Role of Carbon Markets The first priority in any organization’s net zero journey must be to reduce emissions. Each organization should set a 1.5° C aligned science-based target (such as SBTi), which it monitors, and publicly discloses, while focusing on deeply reducing its absolute scope 1, 2, and 3 emissions. However, reaching individual targets and the level of decarbonization that science tells us is needed to limit warming to 1.5° C is dependent on societal, systemic changes — grid decarbonization, new technologies, shifts of fiscal incentives, etc. — all of which will take time. This means that while emissions reduction goals should be prioritized, to reach them companies must also seek to affect change outside their own operations. One critical tool to that end is financial capital such as impact investing, philanthropy, and purchasing carbon credits, which help accelerate the development and deployment of climate solutions. Carbon credits, which represent the avoidance, reduction, or removal of greenhouse gasses (GHG) in order to compensate for emissions created elsewhere, are one such climate finance tool with a great deal of promise. Today, there is a lot of excitement and also trepidation about the growth of the voluntary carbon market. The risk, as with all tools, is that carbon credits may be made poorly or used with bad intent. When made poorly, carbon projects can harm local communities, or might not achieve the emissions benefit they are meant to represent. Or carbon credit purchasers can misuse them by choosing only to offset, instead of prioritizing reducing their emissions. We cannot offset our way to net zero. The promise of the voluntary carbon market (VCM) lies in its potential to scale, from hundreds of millions of US dollars today to $10B–$40B by 2030, spurring innovation and fueling the emergence of a large economic sector for nature-based solutions and technological carbon dioxide removal that the world desperately needs. While carbon markets today are far from perfect, they are one of the best tools we have for financing these critical climate solutions. They are not a silver bullet and should only be used as part of a suite of climate actions. But this is no excuse for inaction. Salesforce believes in our collective ability to mitigate the risks of carbon markets and seize their immense potential. 4 | A JUST TRANSITION TO A NET ZERO, NATURE POSITIVE WORLD