Why carbon offsets make business sense
Read time: 4 minutes
One of the biggest challenges facing the world is climate change.
To help address this issue, the United Nations Intergovernmental Panel on Climate Change has called on countries to reduce their emissions by nearly half of 2010 levels by 2030, and to near net-zero by 2050.
There are several ways to try to reach these climate change targets, and one of them is through the use of carbon offsets.
In the spirit of a commitment to net-zero, a company can minimize GHG emissions first, and then offset emissions that cannot be eliminated.
What are carbon offsets?
Simply put, a carbon offset is the reduction of greenhouse gas emissions in one place to compensate for emissions elsewhere.
For every ton of CO2 a company produces, firms can purchase offsets that reduce CO2 through carbon offset projects. Carbon offset projects require checks and balances that ensure the offset is credible, validated and verified in alignment with robust methodologies such as the Gold Standard.
“As a business owner, reducing your emissions can lower your energy costs in the short term. It can also protect you from increasing energy costs and the future liability associated with carbon emissions” says Simon Hutton, Senior Advisor, Sustainability and ESG with BDC in Vancouver.
Even though most businesses can find ways to reduce their emissions, eliminating them all is not always practical. This is where offsets come in. While they do not reduce your emissions, they can help you “offset” the carbon your company emits to help you reach net-zero.
“When a company has reduced its energy consumption to the lowest possible level, it can then, in the spirit of environmental stewardship and a commitment to net-zero, offset those emissions that can’t be eliminated. Doing so creates a path towards a carbon neutral company and a net zero economy.”
Hutton says there are several types of carbon offsets, including “forestry and conservation, renewable energy, and waste to energy, among others.”
It’s an advantage for businesses to prove they are environmentally responsible.
What are the advantages of buying carbon offsets?
Minimizing operational emissions, and purchasing high quality offsets can help a company demonstrate a commitment to environmental sustainability. It can also better their ability to attract and retain both employees and clients.
“More and more people are looking to their employer to take a leadership position on climate change, and when companies do, benefits can manifest in the form of staff engagement, improved recruitment and retention—and ultimately productivity,” says Hutton.
How to buy or sell carbon offsets?
Carbon offsets is a specialized field and consulting a reputable expert is important.
“If folks come to us and say, ‘I want to do a greenhouse gas inventory, and I want to do offsets,’ we’ll point them towards our partners who can help them with the specifics,” says Hutton.“There are partners across the country we work with, who are experts.”
“They’re in the business of helping folks understand what their greenhouse gas inventory is, and providing the means to measure, manage, and reduce emissions, ultimately reducing costs.”
The future of carbon offsets
Hutton sees demand for carbon offsets only increasing.
“There’s significant interest from large and medium-sized businesses. We’re seeing an increasing number of companies making net-zero pledges. And more and more, smaller firms are taking stock of the importance of a net-zero economy and what is means for their people, their clients, and the planet, and making changes accordingly,” he says.