Where do you go after net-zero, and how can you use carbon offsets in your climate-positive strategy?
We know that, as a civilisation, we have the responsibility to significantly limit global warming by reducing greenhouse gas (GHG) emissions. It is vital that everyone does their part in limiting GHG emissions and, with the business and industrial processes sectors in the UK contributing 20% of UK emissions (2020), companies play a crucial role. Emissions reduction can be achieved in a variety of ways, but companies’ primary goal regarding climate change should be to become ‘climate positive’ - to remove more carbon than they are emitting {1] - and ultimately, ideally, to become ‘net positive’.
There are four pathways that companies could choose to follow:
1. Climate positive: A company removes more GHGs than it emits [2].
2. Carbon positive: A company removes more carbon than it emits [2].
3. Net-zero: A corporation either releases no GHG emissions from its activities, or any residual emissions are eliminated through offsets that permanently remove carbon from the atmosphere [3].
4. Carbon neutral: An organisation balances carbon/GHG emissions through offsets without reducing carbon beforehand [3].
The first step your company should take is abatement: preventing the release of GHGs into the atmosphere. Companies have previously gone straight to carbon offset investments for carbon neutrality instead of reducing their own emissions, which has given carbon offsets a bad name. However, offsetting techniques are acceptable in some instances, such as when implementing a climate-positive or net-zero strategy. The definition of what climate-positive entails is still in the process of being defined. But it is safe to say that climate-positive goals would help transition your company from a reputation for ‘does no harm’ towards one for ‘does good’ [4].
Climate-positive action starts by developing a baseline of your company’s carbon emissions by calculating Scope 1 to 3 emissions. From this, a reduction plan can be formulated; this could include, for example, looking at increasing the use of renewable electricity or transferring to low-carbon materials. Once the reduction of carbon emissions has been optimised, any residual emissions can be offset to help your company reach its net-zero target. However, why stop at just offsetting residual emissions? Your company can easily start on the path towards climate positivity by using additional offsets to continue to mitigate carbon emissions that go beyond those that have been removed at the net-zero level [3].
But what are carbon offsets? Carbon offsets are defined as the purchase of carbon credits (tradeable permits or certificates offering the owner the right to emit a set quantity of GHGs) equivalent to the amount of carbon emissions that are emitted by a company’s actual or anticipated activities [4]. Although carbon offsets do have a complicated history, with some grassroots organisations stating that carbon offsets create “an illusion that something is being done about climate change”[5], there are ways your company can avoid such negative opinions.
For example, The Gold Standard, having been founded in 2003 by WWF and 80 other NGOs [6], provides pinnacle examples on how to purchase credits that are approved by grassroots organisations. Gold Standard offsetting programmes move away from large-scale, controversial projects (e.g. dams) and focus on projects such as investment into renewable energy strategies or reforesting degraded pastureland to allow for sustainable timber production [5].
Whilst carbon offset investments could steer companies towards climate positivity, it is vital to always be thinking ahead in the race to climate positivity. At Oakdene Hollins we believe that companies should be driving change in terms of implementing innovative carbon offset strategies. We want to encourage you to make ‘out of the box’ thinking a prevalent part of your company’s climate-positive strategy. Your company can help finance vital change, by moving away from the traditional offsetting idea of investing in tree planting and renewable energy schemes and instead investing in long-term strategies that could create cohesive benefits for the business and the environment. In this case, the term carbon credits would refer to investments built on circular economy infrastructure, such as investments in innovative recycling and recovery infrastructure for plastics or laser-welded bank technologies for steel reduction [7]. Investing in these innovative strategies would create cohesive benefits by enhancing your company’s ability to have access to the latest, high-class materials whilst limiting your impact on the environment, benefitting your company and the environment in the long run.
At Oakdene Hollins, we take the stance that carbon offsets are necessary when applying a climate-positive approach within a company’s sustainability goals. Once your company goes above and beyond net-zero and implements a climate-positive strategy then it is unequivocally funding sustainable development through climate action. But it is arguably the investment in innovative ‘carbon offsets’ that can help drive change on a corporate level, with your company able to invest in circular economy infrastructure that will have an overall positive effect on your supply chain and the environment. We at Oakdene Hollins look forward to supporting your company in its investments toward circular economy infrastructure, to create a climate-positive world.
For Oakdene Hollins, the next step after climate positivity is promoting an overall ‘net positive’ strategy (Figure 1) [8], which we will be exploring in a future article on how your company can further contribute to a sustainable society.
Figure 1 - Moving towards a net positive strategy for a sustainable society [8].
References:
1. Department for Business, Energy and Industrial Strategy. (2022). 2020 UK Greenhouse Gas Emissions, Final Figures. 2020 UK Greenhouse Gas Emissions, Final Figures (publishing.service.gov.uk).
2. Plan A Academy. (2021, June 08). What is the difference between carbon-neutral, net-zero and climate positive? Retrieved from Plan A: https://plana.earth/academy/what-is-difference-between-carbon-neutral-net-zero-climate-positive/#:~:text=Carbon%20neutral%20means%20that%20any,carbon%20dioxide%20from%20the%20atmosphere.
3. Carbon Trust. (2022). Briefing: Net Zero for corporates. Retrieved from Carbon Trust: https://www.carbontrust.com/resources/briefing-net-zero-for-corporates
4. SBTi. (2021). SBTi Corporate Net-Zero Standard. Global: SBTi. Net-Zero-Standard.pdf (sciencebasedtargets.org)
5. Gold Standard. (2020). Carbon Offsetting: What you need to know to take action against climate change. Gold Standard. gold_standard_offsetting_guide.pdf (goldstandard.org)
6. Blum, M., & Lovbrand, E. (2019). The return of carbon offsetting? The discursive legitimation of new market arrangements in the Paris climate regime. Earth System Governance. The return of carbon offsetting? The discursive legitimation of new market arrangements in the Paris climate regime - ScienceDirect.
7. ArcelorMittal (2022). The circular economy. Steel and the circular economy (arcelormittal.com).
8. Bocken, N., Niessen, L., & Short, S. (2022). The Sufficiency-Based Circular Economy—An Analysis of 150 Companies. Frontiers | The Sufficiency-Based Circular Economy—An Analysis of 150 Companies | Sustainability (frontiersin.org).