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Simply trading carbon credits, on the blockchain or otherwise, won’t solve a lot for the environment as companies must understand why they’re using them and how to make a real impact, carbon blockchain executives argue.

During a panel session in Davos, Switzerland, moderated by Cointelegraph’s editor-in-chief Kristina Lucrezia Cornèr on Jan. 16, several executives from carbon blockchain platforms spoke about the increasing interest from companies in carbon trading.

Karen Zapata, the COO of carbon blockchain platform ClimateTrade, said that sustainability had been a “trending topic” with many companies keen to get involved, but said that many still don’t understand it.

She recalled talking to a sustainability manager of a “big, big company” who told her he doesn’t know what a carbon credit is or “how it works” but is being pressured by his marketing team to “move this forward.”

Zapata emphasized that companies won’t be able to communicate what they are doing with carbon credits to their community if they don’t “even understand” what it is.

She added that one should be less concerned about the pricing behind carbon credits, and more about the impact. The price comes second, once the positive impact is understood, she explained.

Carbon marketplace Tolam Earth CEO Matthew Porter added to the conversation saying that carbon trading by itself “doesn’t solve a lot,” without knowing why they are doing it and creating “incentives and drivers.”

He also added that putting it on the chain only solves a “little bit” of inefficiency.

Related: Blockchain’s environmental impact and how it can be used for carbon removal

There has been no shortage of carbon credit developments in the blockchain space in recent times.

Blockchain-based storage network Filecoin launched Filecoin Green, a protocol labs initiative designed to reduce the environmental impact of its native cryptocurrency Filecoin in Oct. 2022.

The first project it launched was CO2.Storage, a Web3 data storage solution that aims to provide transparency for carbon offsets and address traditional storage solutions for all types of digital environmental assets, including renewable energy credits.

WeWork CEO Adam Neumann dived into the carbon crypto space in May 2022, raising $70 million in the first major funding round for his climate tech venture Flowcarbon.

The project was created to make carbon trading more accessible by putting carbon credits on the blockchain.