Greenwashing - Does offsetting your company carbon footprint really make a difference?
We are living the ‘make or break’ decade for the future of humanity. With nine years remaining to switch ‘business as usual’ for radical climate action, the world is not yet on track to reduce our global carbon emissions by half in time for 2030.
The UN Emissions Gap Report informed the need for a consecutive, annual decrease of over 7% in global carbon emissions between 2020 and 2030, to provide any hope of limiting global warming within 1.5 degrees by 2100. Instead, we hurtled into this decade with an average annual increase in emissions of 1.5% and are currently set to reach 3-4 degrees warming by 2100.
The stakes for business, humanity and our planet have never been higher.
Whose fault is it anyway?
Global temperatures have been rising since the Industrial Revolution. There is little doubt that human activities are the cause, as acknowledged by the Intergovernmental Panel on Climate Change’s (IPCC) fifth assessment report which clarifies the correlations since 1950.
The data is ubiquitous. The National Oceanic and Atmospheric Administration (NOAA ) and NASA confirmed that 2010 to 2019 was the hottest decade since record keeping began 140 years ago and that oceans are warmer than they have ever been. The science is also our reality.
As we awaken to the consequences of our daily actions, communities and economies across the globe are regularly witnessing the devastating impacts of climate change, from floods and freezing storms in the UK and USA, to relentless fires in Australia and the Arctic Circle. Climate injustice continues to divide societies and nations, as many governments and business leaders continue to prioritise the ‘now’ in the trade off for ‘tomorrow’.
Suddenly, the effects of our fossil fuel addiction are no longer the plight of distant, hidden ‘others’ and are by no means simply about the weather. The World Health Organisation reports that over 90% of the world’s children breathe toxic air every day, and a 2020 landmark ruling in the UK certified the death of a 9 year old girl to be caused by air pollution. Fossil fuel particulates have almost doubled since pre-Industrial times and our insatiable appetite for energy, across all industries from construction to technology, remains. Both the burden and the responsibility, now rests with each of us.
A New Era - Business vs Society
The responsibility of business used to be the relentless optimisation of an economic model that has consistently made the rich richer and the poor poorer. Shareholder profits required short term, narrow focussed thinking, and a blind eye to the negative impacts on people and nature.
But today, Information is free. Science is robust. The children breathing toxic air and the communities who lost their homes and livelihoods, have a voice, and they shout loud. They are now employees, they are customers and in this new era where disruptive and social businesses have become a force for good, the power of choice lies with a company’s stakeholders, not shareholders.
Besides reputational and operational risks, the urgency of climate change mitigation to prevent economic collapse, means financial incentives to ‘do the right thing’ have been usurped by economic imperatives for survival.
"You can't wish away the systemic risk...In the end, a small investment up front can save a tremendous cost down the road. A question for every company, every financial institution, every asset manager, pension fund or insurer: what’s your plan?”
Mark Carney, former governor of the Bank of England, 2020
A way out
Collectively, thanks to multidisciplinary science, technology and innovation, we now have the solutions to halt and even reverse, our damage to date, from Carbon Capture and Storage infrastructure, to green alternatives for polluting materials and methods. We have what it takes.
Many greenhouse gases cause global warming, with carbon dioxide (CO2) the most prevalent, and methane (C4) the most potent. Carbon is their key component, and is also the building block of most life on Earth. It is used to build plants, trees, oceans, animals and soils.
Nature is therefore our most effective weapon to capture and store the carbon we emit. She always has been. The oceans (covering over 70% Earth’s surface) are a vast carbon sink filled with diverse organisms, from plankton to whales, which process and lock away carbon compounds at vast depths. Vegetation, from seagrass, kelp and mangroves, to forests the world over, perform the same function.
So, how did we get ourselves into this mess? Global warming is simply caused by the release of more gases into our atmosphere than can be naturally absorbed. Humans and our Industrial activities have simultaneously;
- Increased Greenhouse Gas emissions, and;
- Destroyed Nature, which captures those gases.
We have tipped the balance, in the wrong direction. Being out of balance suddenly means being out of control.
2020 saw unprecedented warming at our Poles. Melting ice means less heat is reflected back to space, and even more is absorbed by the oceans.
Beneath the frozen Arctic soils are fields of methane, which have begun to thaw, releasing this potent greenhouse gas back into the atmosphere, accelerating global warming.
Our relentless, industrial destruction of the Amazon Rainforest (the ‘lungs of the planet’), is transforming a vital carbon sink, into a barren, burning landscape that is starting to emit more than it can absorb.
As we tip the balance, so nature’s pace and speed of adjustment challenges our resistance. But we still have a moment of time. For the developed, wealthier nations (who are responsible for the majority of the problem), our targets are set, but our experience evolves. The Climate Reality Check recently reported that we may in fact breach our 1.5 degrees limit by 2030 or sooner.
The rules of the game keep changing and the players must step up.
One in, One out.
The reality is that every individual, every organisation, has a carbon footprint. There are more humans than ever before, demanding more energy, goods and services. Energy alone contributes over 73% of our global carbon emissions. We must restore the balance.
No single action can achieve this alone. But the requirements are crystal clear.
- We must stop removing Nature’s carbon sinks
- We must stop emitting carbon.
These actions would keep us in the current equation, which we know to be dangerous. To safeguard our future, we must go further, and;
- Restore the Natural carbon sinks we have already removed
- Capture (or draw down) the excess carbon we have already released.
In 1997, the Kyoto Summit Protocol launched a market-based tool to place a price on one metric tonne of CO2 or CO2 equivalent (other greenhouse gases). This price can be invested into carbon capture schemes, compensating for an equivalent measure of CO2 emission. Carbon offsetting was born.
According to the Carbon Fund, a carbon credit is an instrument that represents ownership of one metric tonne of carbon dioxide equivalent that can be traded, sold or retired. It effectively represents ‘the right’ to emit a measured amount of Greenhouse gas. Carbon credits certify that the owner is counterbalancing their emissions, with credit schemes typically investing in emission reduction technology and innovations. The end goal being that in the long term, new and cleaner technologies become more affordable and scalable. The intention is good. But this carbon ‘cap-and-trade’ market effectively enables businesses to sell each other’s rights to pollute.
A carbon offset however, is a scientifically quantified reduction in greenhouse gas emissions created when one metric tonne of greenhouse gas is mitigated, captured, or transformed in order to compensate for an equivalent emission made elsewhere
Examples of carbon offsetting initiatives include wind, solar, hydro, or biomass energy schemes, and technologies such as methane capture innovations at landfills. These projects are validated by third-parties and can also be traded in an open stock market.
Arguably the most sophisticated, effective and affordable carbon capture solutions are, however, Nature Based Solutions. These refer to Natural ecosystems such as forests, soils, peatlands and seagrasses, which efficiently absorb and store carbon - as do the lifeforms within them. For example,a tropical or deciduous forest, or an underwater kelp forest, will capture and lock away excess carbon for hundreds of years. Whatsmore, an ecosystem that is also home to animals, such as elephants, seals or sharks, will store even more.
There are four key principles to robust carbon offsetting schemes, namely that the offset should be;
- Quantifiable (both your emission calculation and the offset measure should be rigorously and ideally, conservatively, quantified by a specialist)
- Additional (there must be evidence to demonstrate that the offset would only be possible thanks to your investment and would otherwise not exist)
- Permanent (ensuring the offset land or project will not be abandoned, sold or destroyed in the future - it must be sustainable)
- Closed (the offset should not generate any other emission, displace humans or wildlife, nor have any sort of environmental disruption).
In addition, the extent of broader, co-benefits of a project or mechanism should be understood. That is to say, as well as capturing carbon, the project will bring additional, positive social or environmental benefits, such as the creation of wildlife habitats, the sustainable provision of food for local communities (such as the planting of fruit trees), or the restoration of ecosystem services such as fresh water capture or improved soil fertility.
Nurture by Nature
The protection and/or restoration of Nature is, without doubt, critical in our fight against climate change. Innovations in carbon capture technology are also necessary and complementary, since our destruction of nature has been so extensive. She takes time to recover - time we are short of. But the long term view is critical, alongside immediate action.
As alluded to above, restoring and protecting ecosystems also restores our critically endangered biodiversity (a topic we will address in a separate article).
A great many organisations in this Decade of Ecosystem Restoration are deploying solutions to mitigate our mistakes, but the necessary scale of change to protect and restore 30% of our land and oceans by 2030 if we are to stand a chance (currently at 15% and 3% respectively) requires extensive investment. If every business contributed to offset their emissions into these solutions, imagine the impact and relief we could all enjoy!
Then what’s the problem?
The controversy that shrouds carbon offsetting can be valid. It can also provide yet another reason for businesses to do nothing.
And that is the first issue. By offsetting part of even all of your emissions, you are not reducing the carbon balance needed to save our planet. As with many emerging concepts for sustainable change, the need to test and prove what works and what doesn’t, alongside the imperative for urgent action, provides a fragmented, disconnected array of projects, schemes, prices and accreditations, which can be confusing to navigate. This provides an excellent excuse to …..do nothing.
Additionally, the need for Quantifiable, Additional, Permanent and Closed interventions is important - but still incredibly hard to measure. Consequently, those who have misjudged or failed, have attracted negative attention both to their interventions, and subsequently, to those who supported them.
By Her very nature, Nature is diverse. She is not precise or consistent, which humans, and business, struggle to measure. What we cannot measure, we believe we cannot manage. For example, a deciduous tree in the northern hemisphere will sequester less carbon, more slowly, than its equivalent in a tropical forest near the equator. Should no one therefore invest in reforestation outside of tropical regions? Not at all. But making the ‘right’ choice is very difficult.
Fear of ‘Greenwashing’, or being associated with the ‘wrong type of project’ is another valid and common reason to….do nothing. The ‘wrong type of project’ could mean investing in the planting of non-indigenous, or single species ‘monoculture’ forests for example, that technically achieves carbon capture goals, but does not support natural, local ecology or biodiversity.
Finally, offsetting 1:1 still keeps the equation as it is today. Whereas, by exceeding your offset investment above and beyond your emission, your business can effectively contribute to a net positive carbon budget. This is one way we can collectively reverse global warming.
Global warming began in earnest from the Industrial Revolution. So how do we determine our ‘baseline’ moment, from which we need to calculate and then offset our emissions if we are to disrupt our current warming trajectory? For example, the UK is pledging a '68% reduction in emissions' by 2030, but is using a baseline year of 1990.
We have approximately 140 years’ worth of damage to reverse. When did your business start operating? There is no recommendation for how far back in time one should go, nor is there any easy way to measure one’s retrospective emissions. History may not be so measurable, but it counts. Your baseline determines your ambition.
It seems clear that offsetting alone will not help our survival. In addition, companies and countries must reduce their carbon emissions, which can be done in many ways. Switching to renewable energy, divesting from fossil fuels, innovating for more efficient manufacturing processes and using cleaner fuels are steps business can take to pollute less. But there will nearly always be a residual footprint.
Many businesses taking sustainability seriously are adamant that only once they have set and reached their reduction targets, will they consider offsetting the residual footprint.
This may seem ‘robust’ and avoid the reputational risk of ‘Greenwashing’. But the statement could arguably be viewed as a strategic delay to evade the investment of profits into solutions that will immediately start to offset their current (and former) carbon emissions, not to mention the other co-benefits available projects can deliver.
For those who are not taking steps to reduce their carbon footprint, purchasing carbon offsets “is clearly better than doing nothing,” says Cameron Hepburn, who directs Oxford University’s Economics of Sustainability programme. “We know we will have to remove a lot of carbon dioxide from the atmosphere, and offsets are helpful in priming that market,” Hepburn says. But he and others caution that carbon offsets still need third-party verification to make sure they do what they are supposed to do.
Moral or Business imperative?
In 2021, every business leader has a choice. To act, or not to act, on climate change. The consequences of their decision, they must enjoy, or bear.
The business benefits of switching your negative footprint into positive impact are evident in the successful performance of companies the world over, from Orsted to LUSH. Conversely, the visible struggles of not doing enough were highlighted in 2020 by the removal of fossil fuel giant Exxon Mobil from the Dow Jones Index for the first time since 1928, and the loss of its title as the largest US energy company, gained by renewables leader NextEra Energy.
The reality is that we, as governments, businesses and individuals, need to do everything in our power to cut our emissions by as much as we can, as fast as we can. Given the uncertainty of self-perpetuating Tipping Points, existing global targets should be viewed as goals to be smashed well before their due dates.
Business can leverage the power of its influence, skill and resource to lead the change our planet desperately needs and the solutions are out there. To reduce, offset, and play your part.....or risk it all. That is the question.
How is your business leading the way? Let us know at email@example.com