A simple guide to Carbon Offsetting

Carbon Reduction Plan, Strategy

Our Director of Sustainability, Laurence, breaks down the basics of carbon offsetting and explains why it’s important to use it wisely as part of your strategy to reduce carbon emissions.

While the concept appears straightforward — mitigate the greenhouse gases you emit by funding equivalent emission reductions elsewhere — the reality is a bit more nuanced.

Table of contents

Table Of Content

Carbon offsetting guide

How do carbon offsets work?

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Purchasing a carbon offset means you’re buying ‘credits’ from projects that either remove carbon from the atmosphere or prevent emissions from occurring. These projects range from natural solutions like tree planting and peatland restoration to technological interventions like renewable energy developments.

Each tonne of carbon saved translates into one carbon offset credit, which the buyer can ‘retire’ to count toward their carbon reduction targets. However, the credibility of these credits hinges on stringent third-party verification to ensure:

  • Provable: There’s undeniable evidence and a rigorous audit trail backing the credit.
  • Additionality: The emission reductions are over and above what would have happened without the offset project.
  • No Leakage: The project doesn’t merely shift emissions geographically.
  • Permanence: The benefits are long-lasting and not reversed over time.
  • Singularity: The reductions are claimed once and retired permanently.

When to use offsetting

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Carbon offsetting plays a pivotal role in achieving net zero emissions—a goal that remains elusive without such mechanisms. What matters in climate action is the global sum of reductions; thus, from a theoretical standpoint, it makes sense to pursue cost-effective and strategically placed reductions globally.

Offsets can be particularly useful for balancing emissions from processes that are costly or currently lack alternatives. They also help in addressing Scope 3 emissions, which are often beyond direct control, providing additional socio-economic benefits in the regions where offset projects are based.

Why offsetting shouldn’t be your first option

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Despite their utility, carbon offsets should not be the first line of action in your carbon reduction journey. Here’s why:

  • Uncertainty: The exact amount of carbon that can be sequestered or saved through offsets can be hard to predict and guarantee.
  • Missed Opportunities: Direct emission reductions can provide additional operational benefits, such as cost savings and enhanced productivity, which offsets do not offer.
  • Reputational Risk: Overreliance on offsets can lead to accusations of greenwashing, suggesting that more progress has been made than is the case.
  • Unintended Consequences: In some instances, poorly managed offset projects can harm local communities or biodiversity.

Best practice for carbon offsetting

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When integrating carbon offsets into your strategy, prioritize direct emission reductions first. Invest in efficiency and renewable resources to minimize your Scope 1 and 2 emissions. High-quality, low-risk offsets verified to respected standards should be used for residual emissions. Always ensure transparency in how offsets are part of your strategy, clearly communicating this to your stakeholders.

Here’s how a responsible communication might look, inspired by WWF:

“Recognizing the ongoing journey to reduce our emissions footprint, we are implementing measures X and Y to move towards our goal of zero emissions. In the interim, we’ve secured carbon credits for the emissions we’re yet to eliminate, supporting vital climate mitigation efforts globally. This is a temporary measure until we can fully neutralize our emissions.”

If you’d like to learn more about a developing a reduction-focused sustainability strategy, don’t hesitate to get in touch with Laurence and the team. Click here to get started.

Meet the author

Laurence Adams
April 23, 2024
Laurence is a sustainability and communications expert who has been working with businesses on climate communications and strategy since 2014. Laurence will help you design a winning climate strategy that not only improves your business, but influences others to follow your lead.