How Carbon Offsetting can Help Brands Address Unavoidable Emissions

Article series:

1- Measure2- Reduce3- Offset

For the majority of businesses around the world, it’s almost impossible to become ‘net-zero’ without contributing to carbon offsetting projects.

Carbon offsetting is an important pillar of a business’s sustainability strategy, but it’s crucial to understand that it should only be utilised after business emissions have been measured and subsequently reduced.

What is Carbon offsetting and how does it work?

Carbon offsetting is a mechanism for businesses or individuals to address emissions that can’t be reduced or removed from the atmosphere using conventional means.

The carbon offsetting process is simple. Firstly, an emitter (i.e. a business) looking to address their residual emissions pays for a project which removes CO₂ from the atmosphere. In return for this payment, the emitter receives a certificate from the project representing the carbon removed that can then be allocated to neutralise their own carbon emissions. In other words, the climate benefit (of carbon removed from the atmosphere) is conveyed from the project to the emitter (see graphic below). The validity of the certificates is assessed by independent third parties which conduct an audit of the projects.

What types of projects can businesses use to offset their emissions?

Offsetting projects vary in scope and size, ranging from nature-based solutions such as reforestation and forest protection projects to engineered removal of carbon such as direct air capture. Projects can be divided into two categories based on how they interact with the atmosphere:

  1. Actively remove CO₂ from the atmosphere, for example through nature-based solutions such as reforestation or technology-based approaches such as direct air capture.

  2. Avoid CO₂ emissions from being released into the atmosphere, for example through rainforest protection, or by implementing community-based programmes such as efficient cookstoves.

How can businesses choose the right carbon offsets?

It’s clear by this point that there are a wide variety of carbon projects for organisations to choose from, but does this mean one project is better than another?

Many organisations choose to invest in offsetting projects that align closely with their brand identity. This can be influenced by project factors such as location and affinity with the industry the project is associated with. For example, agricultural firms may opt to invest in biochar or biogas digesters that are more closely associated with their industry than options such as refrigerant destruction.

Carbon offsets can deliver additional benefits beyond climate impact. This can be an additional factor to consider when selecting projects that align with a customer’s brand. For example, forest protection projects support biodiversity which may be an area of focus for a customer’s brand. Alternatively, projects may deliver community benefits, such as new employment opportunities, which may align with a brand focusing on community.

Additionally, the value of carbon offsets depends on a wide range of factors such as project type, carbon offset standard, location, and permanence¹. For example, the project type impacts the cost of offsets due to the mechanisms of removing carbon i.e. the costs to carry out a reforestation project are significantly lower when compared to a direct air capture project.

Seedlings from the TIST reforestation project (left) and biochar from the Husk project in Cambodia (right)
Why is carbon offsetting important?

While carbon offsetting is not a “get out of jail free card” for organisations looking to address their carbon footprint, it plays a fundamental part in wider sustainability strategies. When rigorously implemented, offsetting is a vital step in the road to net-zero, and allows businesses to address their residual carbon emissions that can’t be reduced by conventional means.

It’s worth noting that carbon reduction and offsetting programmes both require a strong foundation built on data that allows businesses to understand the impact they’re having on the environment. Access to reliable carbon data also allows brands to understand and report on the progress they’re making as they start to reduce, and ultimately offset their carbon emissions. Without data, it’s impossible for organisations to understand the size of their carbon footprint, which actions they need to take, and how many carbon offsets are needed to reach their sustainability goals.

Next: Carbon Markets 101

In our next blog, we delve deeper into the world of the voluntary carbon market. We’ll highlight the environmental benefits of supporting offset projects and break down the differences between compliance markets and voluntary markets, and how these co-exist.