Not all carbon offsets are the same. If you get it wrong it could hurt your business
Many large corporates are rushing to establish Net Zero commitments, then buying the cheapest voluntary carbon offsets they can find. It’s not fraud but I call them fraudsters.
The big banks are doing it — including those that continue to lend to fossil-fuel expanding projects. The big oil companies are doing it — is it only a matter of time before we can buy ‘carbon neutral oil and gas’? Heck, we can already buy ‘carbon neutral concrete’ so why not?
Voluntary offsets are effectively self-selected offsets in an unregulated market. Compliance offsets are those purchased to meet legally binding caps on carbon in order to comply with an emissions obligation, such as the European Union’s Emissions Trading Scheme. These schemes operate in many countries around the world — but there remain many others without any such scheme. Organisations that are not required to meet an emissions cap can purchase Voluntary offsets to meet their self-selected Net Zero commitments.
The actual purchase of carbon offsets can be a bit like paying for gym membership. Membership is only the first step — what you do inside those doors then determines the outcomes. You could sit on the exercise bike in the easiest gear possible and still put away the hamburgers, fries and thick shakes, or you could slowly but surely built a new and improved You.
Offsets are there to counterbalance the bad things you’re doing with carbon emissions. You can still be doing bad things, and your market is now just beginning to realise this fact.
To be fair, signing up and walking in the door are big steps in themselves, but the authenticity only starts to build in proportion to the actual effort you put in from here onwards.
Like many things in business, it matters not only that we are offsetting but more importantly it matters how we’re offsetting. The selection of the cheapest available offsets might be leading to perverse outcomes on the other side of the planet. There is a risk in not having direct line of sight to where your offset investment is going.
Ultimately the selection of offsets does come down to personal or organisational preference, and I get that. But here’s the thing...
Now that you’ve made the commitment to Net Zero and committed to invest in carbon offsets, you haven’t yet achieved Climate Authenticity. The authenticity only begins to build when your selected carbon offsets start to layer up the goodness. Not just be less bad for the planet but hopefully part of the solutions we need.
Those offsets need to sweat!
To give you an idea, here’s an example of what one currently-available nature-based carbon offset product on the Voluntary market can now do:
- Draw down a tonne of CO2 from the atmosphere, thus being part of the solution to reduce global warming — as distinct from putting a fence around (say) a forest that is already there
- Restore and regenerate biodiversity, including threatened and protected species — which can now be protected by the covenant that is attached to the offset scheme
- Support regenerative agriculture and the restoration of soil health and fertility, supporting local farmers who care for the land
- Support local First Nations communities who are employed to manage the regenerated biodiversity you’ve just invested in. Not only skills, jobs and livelihoods but all of the community wealth, health and wellbeing that flows with it.
All in one carbon offset product.
To be fair, such regenerative carbon offsets aren’t at the very cheapest end of the scale, but nor are they the most expensive. If you’re still not sure, ask a few of your employees — would they for example prefer you buy offsets in a pine plantation monoculture or would they prefer the example above, the one with all the stories that might flow out of it?
If authenticity matters to you, if your culture and brand matter, if ESG matters, then the type of offset you invest in also matters.
I use this diagram to help communicate the concept.
Keeping things very simple there are really only two principles. When you’re selecting from the Voluntary carbon offset market, select offsets that give you all of the benefits listed above, seeking them as close to your operations as you can. And aggressively de-carbonise everything that you do (that’s the ‘sweat’ part).
It’s not to say you shouldn’t also invest in international gold standard offsets that might support developing nations or struggling communities who really need the help, in fact a balance of the two might be perfect for your organisation.
The point is that there are now some amazing opportunities right on our doorsteps that are worth considering. Signing up to Net Zero has already lost instant authenticity — the way in which you offset your carbon footprint now matters more than the pledge itself.
If you want climate authenticity, the type of offsets you invest in matter — not just to your customers but perhaps even more vitally to your employees.