Marc Benioff supports a company that employs satellites to monitor tree populations and compensates individuals for preserving them.

• Satellite imagery is used by NCX to produce high-resolution images of forests in the United States.
• The start-up connects landowners with trees on their property to companies seeking to achieve net-zero emissions, offering landowners financial incentives to preserve the trees and allowing companies to purchase carbon offsets.
• On Wednesday, it was announced that NCX had raised $50 million from various investors, including Marc Benioff's investment fund, Time Ventures, and J.P. Morgan.

A forestry study at Yale led to the launch of a project by two students, which has now become a successful start-up with the support of Marc Benioff, who serves on its board.

Zack Parisa and Max Nova, co-founders of NCX, utilized satellite imagery and machine learning software to produce a high-resolution image of the forest inventory in the United States. This image was initially sold to federal agencies, such as the United States Forest Service, and conservation groups, including The Nature Conservancy.

They are utilizing their expertise to combat climate change by promoting the market for carbon offsets, which act as vouchers for a specific amount of carbon dioxide that is being absorbed or not emitted into the atmosphere. Companies can claim to be "net zero" even if they continue to release greenhouse gas emissions, as long as they have purchased enough carbon offsets to offset their remaining emissions.

By keeping trees alive instead of cutting them down for timber, landowners can sell carbon offsets to companies aiming for net-zero emissions. NCX's software helps landowners track the carbon dioxide absorbed by trees on their property, providing companies with more certainty about the legitimacy of the offsets they purchase.

NCX has established a marketplace that connects forest landowners with companies seeking to purchase carbon credits. The company earns revenue by charging a percentage of the purchase price of the offsets.

Nova stated on CNBC on Monday that our company's objective is to facilitate the sale of carbon from forests across the United States, in order to meet the rapidly increasing demand.

The lack of regulation in the voluntary carbon offset market has allowed companies to exploit it for public relations purposes through "greenwashing."

Parisa believes accurate measurement can help fix this problem.

The CEO wrote in a May blog post that the way forest carbon projects are designed and measured hasn't always met their potential or intentions, with many failing to produce real climate impact. The CEO compared this to the evolution of the "horseless carriage" and mobile phone, suggesting that forest carbon projects should also continue to improve and innovate.

NCX announced on Wednesday that it had secured $50 million in funding from various investors, including Benioff's investment fund, Time Ventures, and J.P. Morgan. The company plans to utilize this portion of its $74.4 million total funding to expand its operations globally and develop software management tools for natural resources other than trees.

"We opted to name the company the Natural Capital Exchange instead of the Forest Carbon Exchange because we have a variety of objectives in the woods, such as increasing carbon, decreasing wildfires, enhancing animal habitats, and reducing erosion. Carbon is our top priority," said Nova.

The company is experiencing rapid growth, with a team size increasing from 10 to 50 people in the last year and expecting to have 100 employees by the end of 2022.

The voracious demand for carbon offsets

The voluntary carbon offsets market experienced a significant growth in 2021, reaching $1 billion, compared to $473 million in 2020 and $320 million in 2019.

In 2018, Parisa and Nova started their journey into the carbon offset market after being accepted into Microsoft's AI for Earth program. They collaborated with Microsoft's planetary computer to develop and implement Basemap, a high-resolution forest inventory of the United States.

Pennsylvania landowners can now receive payment for not cutting down trees on their property through a pilot program launched by NCX.

In McKean County, Pennsylvania, only 5% of the total acreage was being paid to landowners not to cut down their forests, which was due to the high cost of manually counting trees on foot in the woods for smaller landowners. The introduction of the NCX software changed this, allowing for more accurate and efficient tree counting.

Currently, NCX serves 2,470 landowners with a collective 4.3 million acres across 39 states.

We approach landowners and say, "We understand you cut down trees for money. Would you consider growing them for carbon instead?" They respond, "How much money are you offering?"

The amount of money a landowner can earn from cutting down their trees for a timber harvest can vary greatly depending on factors such as species, age, and the number of trees on the enrolled property. On average, a landowner might make $10,000 for cutting down their trees. However, if they choose to keep their trees growing, they may receive around $600 a year in payments. At this rate, it would take approximately 17 years of payments to break even.

Rubicon, Incyte, and Patch, among others, purchase the carbon offsets generated by NCX on the opposite end of the transactions. Although Benioff's company is an investor, Salesforce is not a customer.

Landowners defer timber harvesting for a year in exchange for a carbon credit, which is based on trust. Satellite image measurements at the beginning and end of the year provide confidence for both parties. The company's measurement approach has attracted early interest from Verra, a nonprofit that sets standards for the voluntary carbon offset market. Verra's certification could serve as further validation for the company's approach.

Nova stated to CNBC that measurements are crucial for market success, and this is achieved through annual satellite measurement of every acre.