Much has been said of the efficacy, or lack thereof, of carbon offsetting. With climate change an ever-looming issue, as a concept, carbon offsetting appears ideal. A glimmer of hope in the face of an otherwise bleak prognosis.
However, beneath its seemingly straightforward facade lie a number of questions, dilemmas, and even corruption. For small businesses aiming to mitigate their environmental impact, navigating sustainability can be tricky enough. So, let's delve into the quandary of carbon offsetting and explore how small businesses can navigate carbon neutrality.
What is carbon offsetting?
Carbon offsetting is a practice designed, in theory, to balance out carbon dioxide emissions by investing in projects that reduce or remove an equivalent amount of greenhouse gases from the atmosphere. These projects can range from waste and water management projects, carbon capture and storage (CCS) technologies, and reforestation efforts, to renewable energy initiatives.
Done correctly, there’s a lot of good here. Whilst we can’t undo or halt the damaging processes all in one go, carbon offsetting offers achievable alternative solutions to hold businesses and organisations accountable for their climate impact.
The quandary: is carbon offsetting just another form of greenwashing?
While carbon offsetting presents an avenue for businesses to take responsibility for their carbon footprint, it's not without its criticisms and complexities. The Guardian interviewed experts to get their take.
Kevin Anderson, professor of energy and climate change at the University of Manchester, believes that carbon offsetting actively encourages companies and individuals to be even more frivolous and damaging in their behaviours, believing all will be covered and made better by the simple act of investing in carbon offsetting. “My take on offsets, even supposedly good ones, is that from a climate perspective they are worse than doing nothing.” says Anderson.
Simon Lewis, professor of global change science at UCL says, “The problem with the carbon markets is that they’re a wild west, they’re unregulated.”
“I think the carbon markets have a place, as we do not have other mechanisms, but they really have to be highly regulated, otherwise people are buying hot air, and things they don’t know the true value of. I think scientists are quite sceptical of the carbon markets.”
The above graphic belongs to the Guardian, and is based on a new analysis at least 90% of Verra’s rainforest carbon credits do not represent real emission reductions
Meanwhile, Johan Rockström, the director of the Potsdam Institute for Climate Impact Research and chief scientist at Conservation International told the Guardian, “On the one hand, carbon offsetting is necessary, and has positive potentials of providing incentives and thereby generating much-needed investments, for example in nature climate solutions [such as forests]. On the other hand, there is a large risk of misuse of offsetting, if used (as often is the case) to compensate for the inability to follow the scientifically defined mitigation pathway.”
To back up The Guardian also found that more than 90% of rainforest carbon offsets by the biggest certifier, Verra, are worthless.
So, to summarise: whilst carbon offsetting isn’t inherently bad, it has been used nefariously by larger companies and organisations to greenwash and cover up highly unsustainable and morally questionable practices, to say the least. In a great deal of cases, it isn’t working at all, mostly because emission levels are too high to offset, and it's difficult to calculate the real impact carbon offsetting programmes will have.
Becoming carbon neutral: a roadmap for small businesses
With all of this being said, as a small business owner, you may be anxious about how and what you can do to make a positive impact on the environment. And, though carbon offsetting is currently quite the minefield, we believe small businesses can take meaningful steps towards carbon neutrality.
Measure your carbon footprint
Before you begin, understanding your business’ carbon footprint is essential. To calculate, you’ll first need to gather records of your business’ energy consumption over the course of a fixed time span. We recommend starting with the past year. Begin by gathering historic data like utility bills, including water, electricity, and gas. Gas and electricity are measured in kilowatt-hours, and you should be able to find these totals on your utility bills. Water is measured in cubic metres, another figure that can be found on your utility bills.
Where relevant, be sure to include travel data such as plane and train tickets, including for deliveries with estimated fuel consumption for the distance travelled, and fuel receipts for company vehicles.
If you haven’t kept tabs of, or are having trouble totalling distances travelled by car for business use in the past year, track down any fuel receipts you may have and enter the total into a fuel calculator website. Rail, air, and boat travel is measured in kilometres per passenger (pkm). All this means is that if two people made a 1,000-mile round trip, the pkm figure would be 2,000.
Once you’ve gathered as many historic records and data as possible, you'll to convert them into compatible units. Thankfully, DEFRA offers a useful guide that will help you measure and report your emissions. We also recommend using the Carbon Trust’s Carbon Footprint Calculator for SMEs.
Reduce emissions where possible
Once you’ve calculated your business’ carbon footprint, you’ll have a better sense of your weak spots. This will look different depending on your business and the results of your calculations, but for some businesses the improvements may be obvious.
Where can you begin to turn things around? Is it possible to tighten up your supply chain and switch to more sustainable suppliers and factories? Is switching to renewable energy sources doable for you? Could you improve your transportation and logistics? Is switching to more sustainable packaging options an achievable goal? Figure out what’s possible for you and your business, and look into how you can start making these changes.
Offset remaining emissions
The key here is not to rely entirely on carbon offsetting as your tickbox exercise in sustainability. Making your business greener is a process. Once you've taken steps to reduce emissions as much as is currently possible for you, consider investing in high-quality carbon offset projects to neutralise remaining emissions. Be sure to look for projects certified under reputable standards like the Verified Carbon Standard (VCS), Gold Standard, or Climate Action Reserve.
Educate and engage
Involve your employees, customers, and suppliers in your carbon neutrality efforts. Educate them about the importance of reducing emissions and encourage them to participate in sustainability initiatives. Be transparent about your practices to help inform and inspire both customers, and fellow business owners alike. It’s not only responsible and good for the environment, but it’s also good business and marketing to shout about positive and legitimate climate action.
Enjoy the ride
Becoming carbon neutral isn’t a one and done operation. Being a sustainable business is an ongoing journey and practice, that requires regular audits and updates in strategy. You’ll need to regularly review your carbon footprint to measure the effect of your improvements, and doing so will doubtlessly unveil opportunities for further emissions reductions and offsets.
In spite of the complexity surrounding it, carbon offsetting should be understood as a tool and not a convenient get-out-of-jail-free card. Ultimately, the onus is still on businesses and individuals to make informed choices and take proactive action towards a greener future. If something seems too good to be true, and in the case of many carbon offsetting schemes, it often is. So, before you invest, do your research and ensure your hard earned funds are being invested in legitimate climate initiatives.
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