Funga team member Amelia Pokorny geared up for inoculation at a PRT-IFCO tree nursery.
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Even the seemingly benign pastime known as “Netflix and chill” generates a carbon footprint. The servers powering Netflix’s popular streaming service run on electricity, casts and crews must travel to shooting locations, and office buildings must be air-conditioned. Netfilx’s 2024 ESG report reveals that the company generated around 75,000 metric tons of CO2 equivalent greenhouse gas emissions that year. This is low compared to a coal-fired power plant, but it is sobering to think that the CO2 Netflix released into the atmosphere in 2024 had the mass of a 965-foot-long Panamax freighter.
Netflix’s Chief Sustainability Officer, Emma Stewart, PhD, stated in a 2024 message that the company committed in 2021 to cut its carbon footprint by half and offset the remainder by investing in “natural climate solutions.”
Funga, a public benefit corporation previously featured in this column, has just announced that it signed a deal with Netflix whereby the streaming service giant has committed to buy carbon credits generated through Funga’s innovative fungal restoration technology for the next 11 years.
This is a big milestone for Funga and its founder and CEO, Colin Averill, PhD. Netflix’s purchase represents the first commercial sales of Funga’s carbon credits and serves as a catalytic investment in the startup. Averill described the transaction as “a vote of confidence in a new class of nature-based climate solutions.”
Biodiversity boosts growth
Funga has made enormous progress since it kicked off its initial 500-acre pilot program in 2023, now enrolling more than 28,000 acres—roughly twice the size of Manhattan—in its innovative carbon credit program.
We typically think of forests as only the trees that are visible aboveground, but in a healthy forest, trees are just the tip of an enormous ecological iceberg composed of fungi that form “mycorrhizal networks” with tree roots, and helpful bacteria and other microorganisms that store carbon in a thriving subterranean ecosystem.
Funga transplants fungi from healthy forests into commercial groves whose fungi are MIA and whose soil is nutrient-depleted from clear-cutting. The transplanted fungi help trees grow faster by revitalizing the soil ecosystem. The 28,000 acres in 12 states using Funga inoculation represents one of the largest fungal restoration projects in the world.
Funga’s transplants enable trees to grow substantially faster, so that it is appreciably larger by the time it is harvested 25 years later. A tree with 30% more biomass has sequestered 30% more aboveground carbon dioxide and accumulated yet more underground in its symbiont mycelial network.
A Funga scientist measuring the girth of a young tree a year after it was transplanted. Inoculation of saplings using Funga’s method increases growth in trees substantially.
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Funga credits are particularly high-quality because of their measurability.
A key problem with nature-based solutions (actions that use natural systems like forests to address societal challenges like climate change) is consistent and accurate measurement. Landowners can generate carbon credits by promising not to harvest trees on their properties, but there is no way to know whether they had ever planned to harvest trees in the first place, so the credits issued might not represent an “addition” to the earth’s carbon bank. A landowner might agree not to harvest a particular stand of trees, but instead buy other forested land and harvest the timber there; this is known as a “leakage” of carbon credits.
Funga provides services to owners of commercial forests with long operating histories and plenty of data on the size of harvested timber.
Given voluminous data about the height of harvested trees, Funga can claim the extra tree growth generated by the soil ecosystem restoration as a measurable improvement, leaving no question as to a project’s additionality or leakage.
At least 40% of the wood eventually harvested from a commercial forest will be used in the production of construction materials with a useful life of over 100 years, qualified to generate carbon credits under the aegis of “improved forest management.”
Why Funga’s biodiversity enhancement is so effective
Several companies are trying to leverage the natural power of mycorrhizal networks to boost the growth of food crops. According to academic studies and our interviews with farmers, these efforts have been largely unsuccessful. Funga’s resounding success where others have failed is worth examining.
First, fungal inoculation of row crops is carried out in the same way as conventional fertilization. Fungal spores are encased in a protective covering to preserve them until they are applied to fields.
From the standpoint of yeast—a fungus we know and love—this approach makes sense. Bakers store yeast in small shelf-stable packets. When they want to make bread, they add the contents of a packet to some water, flour, and a bit of sugar, and voila!
The mycorrhizal fungi that form beneficial symbiotic relationships with plants are much more complex than yeast and must maintain contact with living roots to remain viable. Rendering such fungi shelf-stable is nearly impossible.
Funga harvests fungal spores from a healthy forest and transplants them to a commercial tree nursery, mixes them with water, and applies them directly to saplings in an aqueous solution within a single day or two of harvest. The fungi then soak into the soil and immediately start forming symbiotic bonds with the saplings, which are later transplanted, fungi-infused soil and all, to the land on which they will grow to maturity. Once transplanted, the mycorrhizal networks strengthen, passing on nutrients to the trees with which they were paired.
Colin Averill, PhD., founder and CEO of Funga, overseeing seedling inoculation activities. The trays contain pine seedlings. In the background, you can see a worker applying an aqueous solution containing live fungi and other beneficial microbes directly to the young trees.
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The species of fungi that form symbiotic relationships with row crops are known as arbuscular mycorrhizae. They form very fine filaments that, over time, move deeper and deeper into the soil, where they release phosphorus—a vital macronutrient for plants—transporting it to the roots of their plant symbionts growing overhead.
However, when row crops are harvested, their delicate symbiotic connections to the fungi are lost. The fungi die and must be replenished with new spores when new seeds are planted.
In commercial forestry, plant-to-harvest cycles are much slower—25 to 30 years—allowing fungi to form healthy, productive and durable symbiotic relationships with trees. Forest fungi are a different species (ectomycorrhizae or ECM) that are much more robust and tend to propagate through shallower soil layers. They are very good at freeing up nitrogen—another essential macronutrient—and transporting it to tree roots. Because the trees are in the ground longer and the ECM fungi are more robust and travel further, they can convey more nutrients to the trees.
A win for biodiversity
Most people visualize “biodiversity” as represented by large, charismatic mammals—elephants, lions, gorillas, polar bears—but biodiversity at the bottom of the food chain is vitally important. Funga demonstrates this with its restoration of soil ecosystems.
Bravo to Netflix for their ringing endorsement of biodiversity with its commitment to purchase Funga’s carbon credits. Netflix’s mission is to entertain the people of the world, but their managers know that they can only fulfill their mission on a livable planet. Intelligent investors take note.
