Carbon offsetting – can big business do it right?

Carbon offsetting often carries a negative reputation. Should corporates seeking to achieve net zero simply steer clear completely?

A telling story from The Telegraph outlines the issues around carbon offsetting. Its headline reads; ‘Shell offsetting carbon in Scottish forest is ‘greenwashing’, Government official warned.’

According to The Telegraph, Jo Ellis, Head of Planning and Environment at Forestry and Land Scotland, said that she did not “want us to come across as falling for the greenwashing” and planting “will not be sufficient to offset carbon emissions for the long term”.

In August 2019 Ms. Ellis said that she was “excited” about the money that it would bring in, but warned: “I don’t want us to come across as falling for the greenwashing.

“The fact remains that mitigation work such as tree planting will not be sufficient to offset carbon emissions for the long term (we need to be reducing the use of fossil fuels) and the tiny amount Shell is putting into green initiatives is dwarfed by what it is still spending on investigating new oil and gas reserves, and in blocking initiatives to set legally binding emissions reductions targets.”

Shell, for their part, have denied that they were involved in greenwashing and said that they have “invested billions” in low carbon technologies.

A spokesperson told The Telegraph: “We agree that action is needed now on climate change, so we fully support the Paris Agreement and the need for society to transition to a lower-carbon future. We’re committed to playing our part, by addressing our own emissions and helping customers to reduce theirs.”

No matter what the truth, the potential PR nightmare from stories like these something any genuinely pro-environment firm wants to risk.

No target-based route for offsetting

There are other reasons for thinking before building offsetting into a corporate net zero portfolio.

The Science Based Targets initiative (SBTI) is a collaboration between CDP, the United Nations Global Compact (UNGC), World Resources Institute (WRI), and the World Wide Fund for Nature (WWF) and is one of the We Mean Business Coalition commitments.

It champions the science-based target setting as a powerful way of boosting companies’ competitive advantage in the transition to the low-carbon economy. So what does SBTI say on offsetting?

Put simply, this; ‘The use of offsets is not counted as reductions toward the progress of companies’ science-based targets.

‘The SBTi requires that companies set targets based on emission reductions through direct action within their own boundaries or their value chains. Offsets are only considered to be an option for companies wanting to contribute to finance additional emission reductions beyond their science-based target/net-zero.’

When does carbon offsetting have a role?

Serious corporate net zero strategies will look at every possible way to reduce emissions through efficiency, demand reduction and clean energy sources. But the fact is, although businesses may have a net zero strategy in place, emissions will still be generated over the coming years. The overall goal is to stop emissions creeping up, which means investment is needed as soon as possible to fund projects around the world that provide the solutions to that goal, needed at the government but also business level.

It’s important to set and implement the strategy, but also look to consider offsetting now.

For offsets to be considered, they need to ensure environmental integrity, they need to be real, measurable, genuinely additional (reductions that wouldn’t have occurred without the offset project), and achieve emissions reductions. Quality of the offsets are often the queried but over the past 10 years there have been significant advancements and there are now excellent, widely recognised standards in place, including the Verified Carbon Standard and Gold Standard

We would recommend taking a combined approach of both direct actions to decarbonize your business and compensate for unavoidable emissions via offsets that meet appropriate quality criteria.

Carbon offsetting is a complex process, so working with a credible and verified partner to implement your carbon offset project is key.

When carefully considered, offsetting can do good. But the scale of the debate and the evident risk involved makes this an option that demands thorough research before it emerges onto forward-thinking firms’ net zero action list.

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