He has something new to sell you.
Photo: Michael Kovac/Getty Images for WeWork
A luxury afforded to billionaires is that they don’t have to disappear, even if they fail spectacularly, and Adam Neumann, who co-founded and was exiled from the leadership of WeWork, is a prime example of this. When he was CEO of the real estate company, the free from all ties A Silicon Valley entrepreneur marketed expensive shared office space using a kind of witty gibberish. “Our mission is to elevate the conscience of the world” was the infamous pitch to Wall Street investors in WeWork’s initial securities filing in 2019. The document attempted to explain the patchwork of companies seemingly unrelated to parent We, including wave pools and private schools. Why be a real estate company when you can sell all aspects of a lifestyle? Some investors considered a reasonable question — until it all exploded dramatically, causing a delayed initial public offering and own ignominious Neumann and Dear break with society.
But now he’s back, baby! Neumann is behind a new company whose market is once again as vast as life itself: the air we breathe and the environment in which we live. Reuters reported On Tuesday, he is the force behind Flowcarbon, a trading platform which, in his own words, “operates at the intersection of the voluntary carbon market and the Web3, leveraging blockchain to scale solutions to change. climate”. To translate: companies can buy credit on the lightly regulated carbon offset market via a cryptocurrency called Goddess Nature Token to give the impression that they are helping the environment. Awesome. In theory, this will make it easier and cheaper to trade credits on a market — all Neumann’s company wants in return is a 2% discount.
Here’s the problem with carbon offsets: they won’t save the environment. Under this system, companies that add more carbon to the atmosphere can pay – via credits – for projects that, in theory, remove carbon from the air elsewhere in the world. It is also supposed to create an incentive to reduce overall emissions. But in practice, it’s easy to play. According to Bloomberg, only 5 percentt credits actually remove carbon from the atmosphere. In fact, a separate investigation by the news agency revealed that huge corporations such as JPMorgan Chase, Disney and BlackRock were working hand in hand with one of the world’s biggest environmental groups, the Nature Conservancy, to buy land that was not at risk of to be destroyed – all as a way to make themselves look greener than they actually were.
These kinds of accounting tricks have big implications. The rise of environmental, social and governance investing – an increasingly influential investment philosophy that seeks to incentivize companies to adopt greener behavior – has led to approximately 400 billion dollars in funds since last year. But the market as a whole is replete with sweeping definitions of what is considered environmentally friendly, an issue that has gotten so out of control that the Securities and Exchange Commission is seeking to reform this. Elon Musk spoke out against these funds as “swindle” because ExxonMobil counts as an ESG company for its efforts to reduce its carbon footprint to net zero by 2050 (a plan that partly rests on carbon offsets), unlike Tesla, the world’s largest manufacturer of electric vehicles. And even if he’s right, his own company makes Billions by selling the carbon credits on the open market, essentially greenwashing the very companies that Musk criticizes.
Neumann’s company doesn’t really deal with all that, but it has the support of investors such as the crypto arm of Andreessen Horowitz, and the platform contributed by McKinsey. In reality, what he’s trying to do here is make it cheaper and easier for the companies most likely to need carbon credits – like those in finance, insurance and energy – to buy them. It is entirely possible that the market will turn into something more accountable to him. For now, however, Neumann doesn’t seem to be raising the consciousness of the world as much as making the planet greener than it actually is.