Can carbon offsetting be a part of your net-zero strategy in a credible and meaningful way?
As part of edie's Explains Guide on carbon offsetting, Bethan Halls, regional director, UK & Ireland, for the South Pole Group outlines how carbon offsetting should be utilised as part of corporate net-zero targets.
We have to move to net-zero emissions if we want to preserve our planet and our economies for future generations and meet the goals of the UN Paris Agreement. Carbon offsetting is an important part of this journey, but what part does it play in a net-zero strategy? How can carbon offsetting be used in a credible and meaningful way?
Take early action by compensating for your current emissions
As you start on your journey towards net-zero emissions, you must consider your current emissions. While a net-zero is the goal, many times such a target is 10, fifteen, or even thirty years in the future.
In many cases, organisations need some time to develop and roll out solutions for zero or low emissions across their operations and supply chains. In the meantime, the climate crisis is happening now and emissions need to be dramatically reduced today. And there are plenty of climate action projects around the world that urgently need financing, which carbon finance provides.
You can take an early and decisive step by offsetting your emissions now as you set out your detailed reduction plan.
Your carbon offsetting plan starts with understanding your carbon footprint and taking responsibility for your emissions by purchasing a corresponding amount of offsets. As you continue on your journey, this footprint will be used as a baseline to set your science based target and will act as the basis for your reduction plans. By taking this first step, stakeholders, including clients and staff, see that you are doing the right thing and you will already be one step closer to achieving your own net-zero target.
Perhaps most importantly, compensating for emissions creates an internal price on carbon. By paying for offsets, an organisation creates a real and tangible cost of its emissions on its balance sheet, well noted by its chief financial officer. It is an important economic signal within an organisation to drive internal innovation to reduce emissions, in order to reduce the cost for offsets. From that point on, every reduction in emissions has a positive value, thereby supporting the business case for internal changes that will further reduce emissions.
What type of carbon offset projects will support my organisation’s journey to net-zero?
By investing in verified climate projects, you are supporting climate action that protects and restores biodiversity, improves food and water security, creates new future-proof jobs, and brings renewable energy to all corners of the world today. Most organisations like to include a mix of these projects in their carbon offsetting portfolio. This is often crucial to meeting budget and strategy requirements and it also provides more opportunities to create engaging content to share with customers and stakeholders.
It is also important to note that the longer you invest in a climate action project, the greater your contribution to the communities they serve. South Pole maps the impact of its projects above and beyond carbon against the United Nations’ 17 Sustainable Development Goals (SDGs), which includes objectives like reducing poverty, helping women and protecting biodiversity.
Carbon avoidance and removals
Organisations should also consider creating a portfolio of carbon credits that help to avoid as well as remove carbon from the atmosphere. Once your organisation has executed an ambitious reduction plan for scopes 1, 2 and 3, the guidance from the SBTi states that purchasing carbon credits from projects that only capture and store (‘remove’) carbon from the atmosphere should be used to neutralise unavoidable emissions. You can learn more about carbon removal projects here.
Edie Explains: Carbon Offsetting
What is carbon offsetting in the terms of a businesses’ carbon emissions strategy? How does the carbon offset process and its market work? And, at what point should a business turn to carbon offsetting?
From exploring the different types of offsetting and how they work to outlining the benefits and controversies surrounding them, this guide outlines how offsets can be utilised as part of a carbon business strategy that focuses on reductions first and foremost.
This free-to-download edie Explains guide, produced in association with the South Pole Group helps sustainability professionals understand and navigate the growing market of carbon offsets.
© Faversham House Ltd 2022 edie news articles may be copied or forwarded for individual use only. No other reproduction or distribution is permitted without prior written consent.