Why Your Company Needs A Carbon Action Fund
Offsetting has had some seriously bad press recently for not doing what it says on the tin. It is also under attack from new legislation which is seeking to put an end to carbon neutral product claims based on businesses buying carbon offsets.
The problem with carbon credits
1. Do they reliably remove emissions? (Erm, no)
The much reported issue is that many projects have been proven not to live up to their claims of how much carbon they remove, store or avoid. Carbon registries are self-regulated and whilst many profess strong auditing practices, investigations have found numerous projects to be next to worthless.
“Carbon offsetting is an honesty system coupled with a financial incentive for dishonesty.”
Ketan Joshi, Climate Researcher
2. Can we offset out way out of the climate emergency? (It’s another no)
In addition to this, even if we wanted to, there simply isn’t enough space on the planet to offset all the greenhouse gas emissions we are creating. On its own, fossil fuel giant, Shell, would need to plant trees covering three times the size of the Netherlands (12 million hectares) to ‘offset’ its carbon footprint up until 2030.
3. What’s the return on investment? (Spoiler: zero)
Once your company has paid a carbon registry for your credits, you have lost control of how your money is used. There is no tangible benefit to your company. Nothing changes. With updates to greenwashing rules coming down the pipeline, you will no longer even be able to claim carbon neutrality based on carbon credits alone. The best you can do is say you’ve invested in project x or y. You won’t get a return on your investment.
We hope you’re starting to get the picture. Basically, every dollar spent on carbon credits is a dollar that doesn’t go towards reducing your future emissions.
Buying carbon credits is a bit like paying rent rather than paying off a mortgage. After 20 years of renting, you have nothing to show for the money you spent.
Enter the carbon action fund
So what can your company do instead?
The answer is sometimes known as ‘Carbon Insetting’. It involves holding onto the money you would have spent on offsetting. One of the main barriers to taking carbon reduction action is the cost involved. It costs money to switch to an electric fleet of vehicles, install solar panels, boost insulation, buy heat exchange units, take the train rather than fly etc.
By using the money you were going to spend on carbon credits to cut your own carbon footprint you will make a tangible reduction. Plus you will make your company more resilient and attractive to talent and investors if you spend it right.
How do you go about it?
Well, it’s pretty simple. Don’t buy the credits. Ring-fence the money you would have spent on quality credits (say £15 per tonne) and stash it in an account (preferably one with great eco-credentials).
Then, identify the actions that will reduce your carbon footprint significantly and allocate your budget to help you achieve them. You may need to save some of your budget for a year or two if your strategy involves a large capital expenditure, but at least you can tell your people your plan and how, and by when, you are going to achieve it.
For example: instead of spending £3,000 on carbon credits, spend it on solar panels for your office. This can reduce your carbon emissions by 8 tonnes of CO2e and reduce your electricity bill by £1,000 every single year!
When you think about it, why would your company invest in carbon credits instead of using that money to get its own house in order?
Need help?
If you need help working out how much to put in your Carbon Action Fund each year and what to spend it on for the biggest emissions reductions, get in touch.
