Forget the forests, the future is Carbon Neutral

Britain's largest player in the voluntary carbon-offset market, Future Forests, has relaunched this week as The Carbon Neutral Company to reflect its broader offering in the voluntary carbon offset market.

Jonathan Shopley CEO of the company told edie that circumstances had changed considerably since the company began. “Over the last four or five years our offering has evolved quite significantly, as has the market itself.”

“When we really got the idea going, about 8 – 10 years ago, climate change wasn’t on the agenda as strongly as it is now, the regulated market hadn’t begun and the voluntary market was all that there was, with very few incentives to get involved.”

“So, our particular proposition – built around the icon of the tree – was very powerful and got things moving.”

Since then, however, the voluntary carbon offset market has grown enormously, with several companies such as 500PPM in Germany, BP Global Choice in Australia, and Climate Care in the UK, all offering specialist offset options.

Indeed, the voluntary market has grown to such an extent that Mark Kenber, policy director of The Climate Group – an organisation set up last year (see related story) to encourage business engagement on climate change – has predicted that, if it takes off in the USA, it could become bigger than the clean development mechanism under the Kyoto Protocol.

To fully capitalise on this market growth, Future Forests has developed a portfolio of options for individuals, companies, and even cities, to offset their emissions and become Carbon Neutral.

Last year the city of Newcastle announced a partnership with Carbon Neutral to reduce emissions by 60% through offsetting followed shortly after by Bristol (see related story) and now the company boasts an impressive client list including Honda, Berkeley Homes, Avis car hire, and Radio Taxis.

To reach this level, Shopley said the company soon had to offer far more than simply selling the carbon stored in trees to offset individual CO2 emissions. Instead, it has branched out into a full blown consultancy, able to conduct an audit of carbon emissions that a company or individual may produce, then offer strategic advice to reduce those emissions, and, of course, a range of options to offset whatever emissions will remain.

This range of options extends beyond investing in forests and includes investments in renewable energy schemes and energy efficiency projects.

“At the start of this year, we spoke to a lot of people – NGOs, government, business – about what our role is,” Shopley explained. “We soon found that a lot of people were amazed at the extent of the work we were doing. It gave us a clear signal that our name had to change so that people could see beyond the forests aspects.”

After this offsetting, Carbon Neutral also offers a communications role, helping to advertise the carbon programme and allow it to differentiate itself in the market.

Shopley felt that the time was right for the relaunch for a number of reasons. “There is a confluence of forces at work in the market place, meaning demand for carbon offset is huge. Last year our turnover was £1.4 million, and we are on course for £2.5 million this year.”

One reason for this has been the advent of Kyoto and the regulated market in emissions, giving a terrific boost to the voluntary offset sector as well.

“As soon as the EU emissions trading scheme came into being, business saw a rapidly maturing market for carbon being traded. It created a sense of credibility and sustained interest which wasn’t there before, and made a strong statement that this is definitely part of the future,” Shopley said.

A sense of credibility is something that Future Forests has, in the past, been accused of lacking. Critics have questioned the scientific basis of using forests as carbon sinks, and claimed that many of the sponsored projects would have happened anyway, regardless of Future Forests involvement.

As part of the rebranding process, Carbon Neutral has sought to counter these criticisms. Partly, this has been addressed through moving investment away simply from forests and into renewable projects, and also through developing the Carbon Neutral Protocol to create a baseline, or standard, by which the offsetting can be judged and open it up to third party scrutiny.

This has been developed in consultation with Mark Kenber, who also wrote the Gold Standard for the CDM, and now sits on the advisory board of Carbon Neutral. The Protocol is also subject to an independent assurance review from KPMG.

In addition, it has sought to place more emphasis on the scientific underpinning of its investments by bringing in John Murliss, previously chief scientific advisor to the Environment Agency. He will be helping to develop policy options and chair the carbon neutral advisory board.

“It means we’ll have a brand that consumers and clients can know and understand and we can assuage any concern. We need standards and people need to know what’s behind them. The Carbon Neutral Protocol should do that.”

The need to develop standards that people can trust, and to prove that voluntary offsets can add value to businesses is crucial if Carbon Neutral is to keep building its customer base. A new survey of FTSE 500 companies shows that, while the majority see tackling carbon emissions and climate change as a greater priority than terrorism or competition from the developing world, a shocking 75% of directors said that business would only take climate change seriously if forced to do so by taxes or regulation.

According to the findings, the management of CO2 emissions rated only just above ‘gym membership’ in the actions of most directors.

“It’s interesting that our survey’s findings suggest that while businesses are not doing enough to address climate change, there is a growing recognition that tackling carbon emissions has positive benefits to businesses bottom line and the economy,” said Shopley. “We believe there has never been a better time for businesses to act and government to incentivise.”

The business case for going carbon neutral is certainly strong, with firms such as Radio Taxis in London claiming to have won contracts worth over £1.2 million as a direct result of this action in the past year.

However, as the results of the survey show, there is still a long way to go in persuading all business of the merits of taking action. It would appear that, in the voluntary offset market, many businesses can’t see the wood for the (future) forests.

By David Hopkins.

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