𝗧𝗵𝗶𝘀 𝗮𝗿𝘁𝗶𝗰𝗹𝗲 𝘄𝗮𝘀 𝘄𝗿𝗶𝘁𝘁𝗲𝗻 𝗯𝘆 𝗜𝗻𝘁𝗲𝗴𝗿𝘂𝗺 𝗘𝗦𝗚 𝗮𝗻𝗮𝗹𝘆𝘀𝘁 𝗠𝗼𝗹𝗹𝘆 𝗙𝗿𝗮𝘇𝗲𝗿.
Last month, my colleague Hazel Cranmer wrote a post on the issues of companies relying solely on carbon ‘offsetting’ to reach decarbonisation goals.
She argued carbon offsets fail to make genuine carbon reductions, and that we should instead invest in ‘carbon insetting’; avoiding emissions at the source “rather than being forced to clean them up”.
As the carbon market heads into turmoil following the recent announcement from Zimbabwe (https://www.bloomberg.com/news/articles/2023-05-18/global-carbon-market-in-turmoil-after-zimbabwe-grabs-offset-money?leadSource=uverify%20wall), offset schemes have become more unreliable in achieving carbon neutral status.
It has become apparent that this sentiment is widely shared, with both the EU parliament and UK’s advertising watchdog proposing bans last week on adverts making ‘carbon neutral’ product claims using offsets. (https://www.theguardian.com/environment/2023/may/15/uk-advertising-watchdog-to-crack-down-on-carbon-offsetting-claims-aoe & https://us10.campaign-archive.com/?e=6cd1763d23&u=f89d68518db6e2585b0808206&id=35b50e16fc) .
The crackdown comes as no surprise, given the seemingly endless cases of companies being exposed for greenwashing.
Examples include the TotalEnergies lawsuit, who claimed their Thermoplus heating oil was carbon neutral through compensating for emissions via offsetting schemes in India and Peru, and the banning of Lufthansa’s recent campaign declaring their green efforts (carbon offsets) were ‘protecting the world’s future’.
𝗛𝗼𝘄 𝗺𝗶𝗴𝗵𝘁 𝘁𝗵𝗲𝘀𝗲 𝗽𝗿𝗼𝗽𝗼𝘀𝗮𝗹𝘀 𝗮𝗳𝗳𝗲𝗰𝘁 𝘁𝗵𝗲 𝘀𝘂𝘀𝘁𝗮𝗶𝗻𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗹𝗮𝗻𝗱𝘀𝗰𝗮𝗽𝗲?
I believe we will see two changes:
1. More accurate sustainable purchasing decisions
Despite growing success in exposing dubious green claims, it is likely that many other companies make similar statements but evade consequences. The recent proposals should hopefully discourage such behaviour, prompting companies to either verify their claims or refrain from making them altogether. We should then, in theory, be able to trust what companies are advertising to us and make more accurate decisions on what we buy based on sustainability grounds.
2. A shift towards carbon ‘insetting’
Apprehension of lawsuits could push companies towards more credible initiatives to substantiate their green claims. In essence, the crackdown should serve as a catalyst for companies to shift their reliance on feeble offsetting schemes and embrace more robust approaches in reducing the carbon footprint of their offerings.
𝗜𝘀 𝘁𝗵𝗲𝗿𝗲 𝗮𝗻𝘆 𝘂𝘀𝗲 𝗳𝗼𝗿 𝗰𝗮𝗿𝗯𝗼𝗻 𝗼𝗳𝗳𝘀𝗲𝘁 𝘀𝗰𝗵𝗲𝗺𝗲𝘀 𝗶𝗻 𝘀𝘂𝘀𝘁𝗮𝗶𝗻𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝘀𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗲𝘀?
We at Integrum ESG do not include carbon offsets in calculating the carbon footprint of companies (as per GHG Protocol guidelines).
However, investments in offsetting schemes should not be discouraged entirely. Not only do they contribute to the pool of climate finance needed to reach international climate goals, but they also demonstrate a company’s dedication to global climate mitigation beyond their value chain; a policy valued by ESG ratings providers and investors.
But what do you think?
𝗪𝗵𝗮𝘁 𝗱𝗼 𝘆𝗼𝘂 𝘁𝗵𝗶𝗻𝗸?
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