ENVIRONMENT - 08.04.2021

Should you offset carbon to get to net zero?

New research shows that more and more SMEs are thinking about a net zero plan. Is this something you should consider too, and if so, should it include carbon offsetting or is this cheating?

Net zero rush

There has been a rush of net zero commitments being made by businesses, councils and the government. Globally, the number of companies to have set net zero goals increased from 500 in December 2019 to 1,541 by September 2020, according to a report by Driven EnviroLab and the NewClimate Institute.

One in five SMEs. A survey by the Institute of Environmental Management and Assessment (IEMA) and the British Standards Institution (BSI) published in January 2021 showed that 20% of the UK’s small businesses have committed to a net zero target (see The next step ). Another 50% want to, but many businesses seem to be struggling to know exactly what net zero is, let alone what it means for their business.

What’s net zero?

Achieving net zero means getting to a point where a company adds no incremental greenhouse gases (GHGs) to the atmosphere. This is usually achieved within a set timeframe.

How to do it? Going net zero is a balancing act between reducing the GHGs your business emits and removing what’s left.

Offsetting trick. Removal of emissions often involves carbon offsetting. This is the process of compensating for the emissions a business produces by investing in schemes that aim to make equivalent reductions of carbon dioxide from the atmosphere, e.g. planting trees.

Popular. There has been a huge rise in demand for carbon offsetting credits. But this is a complicated business that is open to fraud and greenwashing. A report by the European Commission in 2016 found that 85% of the projects funded had failed to reduce emissions.

Low cost carbon. Sometimes the offset price is so low that it can have the opposite of the desired effect. A flight for example can be offset for £1. It’s for these reasons that several of the net zero commitments being made rely heavily on offsetting. There are moves to make the market for offsets more transparent, but this will take time.

Don’t rush

There is huge variation in the commitments being set. Some are well thought out, backed by respectable frameworks, e.g. the science-based targets initiative, have interim targets, cover all emissions and are transparent. Others are no more than a press release. The government set a net zero by 2050 target in law two years ago but has yet to publish a detailed plan of how it will achieve that.

More guidance. Some 82% of those surveyed by the IEMA/BSI felt they needed more guidance. This isn’t surprising: no company, council or government knows exactly how it will hit net zero by 2050. This is because we can’t tell what new tech will work, how long it will take to scale, what your business will look like in 25 years, etc.

What to do? A net zero plan takes time and resources and will need to be tailored to your business. Just because competitors are rushing to set targets doesn’t mean you have to, especially if they are just offsetting everything. It’s better to focus on reducing emissions and talk about this. Tip. Don’t worry too much about a net zero target or plan now. Tread carefully when it comes to offsetting. Instead, we’d suggest focusing on reducing your carbon emissions, which often saves you money, e.g. being more energy efficient.

Don’t worry about the rush to commit to net zero. Some of the commitments run to little more than a press release, while others rely on dubious offsetting schemes. Focus instead on reducing emissions, through e.g. cutting energy, as this will save money.

The next step

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