INTERVIEW: UK broker sees strong demand for contribution units

Quantum Commodity Intelligence - London-based consultancy and carbon credit marketplace Pinwheel has seen strong demand for its services based on contribution claims, providing an alternative to the traditional carbon offsetting model, executives Gavin Sheppard and Robert Cheesewright told Quantum.

Pinwheel, founded in 2020, calls itself "an assisted software as a service business" and helps its clients source carbon and biodiversity credits as part of their net-zero journey, focusing almost exclusively on 'contribution claims', a concept that emerged only a few years ago.

Unlike with carbon offsetting, companies that follow this framework do not claim a 'tonne for tonne' compensation of their emissions, but typically make a contribution based on a specific aim ('money for tonnes') or, in some cases, an available budget ('money for money').

Critics say this undermines the case for investing in carbon credits, while its proponents argue this avoids controversies and provides a clearer framework for buyers with fewer risks.

Last year, the Science Based Targets Initiative's (SBTi), the main arbiter of corporate climate claims around the world, released its much-anticipated guidance on 'beyond value chain mitigation' (BVCM), which includes the use of carbon credits, and new guidelines are expected to be finalised soon.

The voluntary carbon market has been in a downturn for three years, following the rise in interest rates, ebbing interest in ESG, and criticism about the way some carbon offsets have been generated, but the company's CEO said the demand for contribution units is booming.

"The issues the carbon market has had, in my view, have really been around the way in which claims were made," said CEO Gavin Sheppard.

"The contribution model is helping corporates to become comfortable with carbon crediting and associated activities, post some of the scandals we've seen."

"It's also helping businesses who haven't yet been into carbon crediting to enter the market in a way that they feel more comfortable with and which supports other parts of their corporate sustainability strategy," he added. 

Marketing

Pinwheel was founded by marketing executive Gavin Sheppard and Rupert Howell, the founder of advertising agency HHCL, with the team also comprised of Amber Rudd, the former UK Home Secretary, Work and Pensions Secretary, and Energy and Climate Change Secretary, and several former high-ranking UK climate officials.

This includes Robert Cheesewright, now the company's Chief Impact Officer, and Shantha Shanmugalingam, a former Head of Climate Change at the Treasury.

Sheppard said the firm's pedigree has helped it win over some clients over the past year, with growth in revenues of 500% year on year in 2024 and near 100% growth in the company's turnover in Q1 2025 versus the same quarter of 2024.

But he also argued the company's sole focus on contribution claims has enabled it to differentiate itself amongst the competition, with most carbon market intermediaries still looking at offsets or a mix of offsets and contribution claims.

"The BVCM and the SBTi aligned BVCM contribution is building confidence in the carbon markets and is bringing new business to the carbon markets," Sheppard also said.

"As long as you are contributing that is a true statement whereas with offsets you are relying on things outside of your control."

In particular, Pinwheel said its approach has unlocked more demand from its customers for higher-priced carbon credits, such as nature-based or engineered carbon removals, than under a traditional offsetting model.

The company has not revealed the volumes involved but counts among its clients' high-profile outfits such as the Wimbledon Tennis Championships, he said.

Pinwheel's background in advertising means it has focused many of its tools on how to engage clients and spur interest for carbon credits inside companies, based on the understanding that the more a company learns about a given carbon pathway or project, the more likely they are to buy from it in the future.

This included a recent project with HH Global, a technology platform, involving a survey of 4,000 employees on what types of carbon credits they favoured.

Engagement tools, used by advertisers to drum up interest, has been applied to the carbon market.

"What we see within our client set is clients becoming much much more thoughtful about what it is that they're buying, wanting more information about those projects and not just those projects as individual projects, but how do these projects interact? Where does this fit within a broader portfolio?"

"How do I broaden my portfolio to de-risk it and to make sure that I have even more ecological impact? They're much more interested in co-benefits, in how carbon credits align with their business activities and their brands, rather than seeing it as an interchangeable commodity."

"We find that almost without exception, our customers are spending more year on year with us as they progress with their relationship with Pinwheel. And I think that is a measure not only of our effectiveness, but a measure of the effectiveness of the model and the activity as well."

Pinwheel said it will soon announce details of a call for CO2 removal projects as well as a partnership with UK non-profit Fauna and Flora.

Mitigation Contribution Units (MCUs) are one of the carbon currencies under the Paris Agreement's Article 6 mechanisms, which intergovernmental climate negotiators launched last November at COP29 in Baku, Azerbaijan, after nine years of negotiations to govern UN-backed emissions trade.

MCUs have so far been less in the focus of carbon market participants, as they are 'mitigation outcomes' which must not leave the country where the carbon projects generating them are based.

The Quantum View: Time will tell whether contribution claims will become widespread, but the company's argument that they help broaden the carbon market is compelling.

Together with the rising link between carbon offsets and compliance emissions markets, this makes the carbon market even more complex, though.