The Role of Carbon Offsets in Corporate Sustainability (part II)

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Carbon Credits
Carbon Credits

Part II – Carbon Offset Best Practices

In our first article in this series, The Role of Offsets in Corporate Sustainability, we explored common carbon offset project categories, and how offsets can play an important near-term role in companies’ broader sustainability efforts. We also highlighted why offsets sometimes are sometimes criticized, and discussed why or why not those critiques are valid.

In this second article in the series, we take a closer look at best practices for organizations that utilize carbon offsets as one of many tools in their sustainability toolbox.

First, reduce your emissions wherever possible

The first step in any company’s climate action plan should be to reduce all emissions that are within its direct control, including its own operations and supply chain. This action may take many different forms depending on the nature of the organization, but all organizations should develop and implement a carbon reduction strategy. Typically, this begins with an audit of operations, an internal evaluation, coordinating with suppliers in the supply chain, or any other process to identify sources of emissions and calculate the company’s total greenhouse gas (GHG) emissions footprint. After the sources have been identified, companies can set emission reduction targets and develop plans to specifically address the impacts associated with those sources and activities. 

Use offsets as a bridge to long-term, industry-specific solutions for decarbonization

It is nearly impossible for even the most efficient and sustainable organizations to completely avoid activities that result in GHG emissions. Some industries are already subject to GHG regulations, such as the oil and gas industry in California. However, in other industries that aren’t yet regulated, many organizations are stepping up to take voluntary action. Until the largest industries – such as transportation and agriculture – are fully decarbonized, it will not be possible for organizations to address the entirety of their climate impacts through internal changes. Lack of viable technologies, resource constraints, and other obstacles can make the path challenging. This is where carbon offsets play an important role. Offsets can be an instrument that allows corporations to add onto baseline activities that are already working toward sustainable operations. By investing in emission reduction projects, organizations can take immediate action on their Scope 1 (direct) and Scope 3 (indirect) GHG emissions that are otherwise difficult to address.

Ensure you support high-quality emission reduction projects

It is critical to remember that not all offsets are equal in their impact. Organizations need to be thoughtful when sourcing carbon offsets, ensuring they are from projects that are third-party verified using internationally recognized standards that are managed and maintained by independent, not-for-profit organizations. The ultimate goal is to support emission reduction projects that align with the company’s industry or supply chain, or its geographic, social, and economic impacts. 

Is there a role for carbon offsets to play in corporate sustainability? Yes, absolutely. But it’s important to remember that carbon offsets are just one tool available to companies seeking to build a comprehensive sustainability strategy. And while offsets are not a singular solution to climate action, they can offer an important mechanism for corporations to achieve near-term climate goals and address hard-to-reduce emissions sources.