Sustainability is now the norm for successful businesses. As a result, travelers and other buyers are becoming increasingly concerned about carbon offsetting and its impact on the world, both socially and environmentally. They are not afraid to hold companies accountable. In response, many businesses are scrambling to prove their commitment to sustainability. One way they’re doing this is by offsetting their carbon emissions.
Carbon offsets are a way for companies to neutralize their emissions by investing in projects explicitly created to solve many environmental problems and reduce carbon in the atmosphere. Whether reforestation projects that plant millions of trees or investing in renewable energy projects such as SAF for the aviation industry, offsets are necessary for many companies to show their commitment to reducing their environmental impact as they start down the road of sustainability. However, carbon offsetting and the types of projects offered are not without their critics.
Some argue that carbon offsets allow companies to avoid taking responsibility for their emissions. Others say that they’re not effective in reducing emissions overall. Regardless of the debate, carbon offsets will likely continue as a short-term solution as businesses increasingly commit to more sustainable operations and procurement, moving toward aggressive emission reduction goals and fulfilling their public commitments.
Sustainability in the travel and tourism industry has become business-critical and is no longer just an environmental issue. Instead, it encompasses social and governance factors and represents how the company manages its economic, ecological, and social responsibilities to meet the needs of the present generation without compromising the ability of future generations to meet their own needs.
George Monbiot’s article “The Offset Delusion” discusses the problems with using offsets to absolve companies of their emissions guilt. He argues that offsets should be the last resort for residual emissions, only to be used once a business has reduced its carbon footprints as much as possible through internal mitigation.
While we agree with Monbiot that carbon reductions via internal mitigation are the best-case scenario, we also know that sustainability is a journey. Companies often take time to implement carbon reduction tools and processes, and most will not show an immediate effect. So, offsetting can play a crucial role in these businesses’ sustainability strategies as companies begin to address change. “Net zero” is the end game, and when used correctly, offsets can help enterprises reach their goals and support projects with positive environmental and social impacts.
Traditionally, business travel has been a significant source of emissions for companies, and large companies find that the bulk of their emissions falls into the category of “indirect emissions” or what is referred to in environmental reporting as “Scope 3” emissions. Therefore, when a company counts its indirect emissions as part of its annual ESG reports puts a spotlight on travel and transportation – everything from air travel to hotel stays and land transportation is counted as Scope 3 emissions.
With the pandemic and the subsequent elimination of almost all business travel, we saw a rise in technological alternatives like video conferencing, virtual trade shows, and more; businesses have learned that every trip is not necessarily “necessary” and have begun to explore ways to reduce their travel footprint. For example, some companies have implemented policies restricting air travel to only essential trips, replaced air travel with rail whenever possible, and, most importantly, looked to their suppliers to have much smaller footprints.
For travel buyers, when it comes to business travel, offsetting can effectively reduce your carbon footprint in the short term. However, it’s important to remember that offsets are just one piece of the puzzle—to improve your company’s environmental performance, you need to implement a comprehensive sustainability strategy that addresses the emissions generated by all aspects of your business, including your travel value chain. Furthermore, without the support of sustainable suppliers, your reduction strategies may fall short.
The Quality of Carbon Offsets
Carbon offsets neutralize an organization’s greenhouse gas emissions by investing in projects that reduce emissions elsewhere. However, there are many problems with the global carbon market, such as inflated carbon removal claims, double counting, outdated and uncertain measurements, and a lack of accountability or regulation. As a result, many carbon credits fail to live up to their promise
Organizations should be aware of these risks when considering purchasing carbon offsets. Offset providers that are transparent about their projects and adhere to rigorous standards are more likely to provide high-quality offsets. However, it is up to the buyer to do due diligence and ensure that they are comfortable with the offset provider and the quality of the balances.
How to recognize a good carbon offset?
The amount of carbon reduction or removal must come from the direct activity of the offset project.
Offsets must be measurable, monitored over time, and validated by an independent third party, a UN, or a government body.
Carbon must stay sequestered from the atmosphere, which is especially important for nature-based offsets. For example, trees should stand for decades to qualify because they sequester carbon as they grow.
A project is additional if the greenhouse gas reduction had not happened for the offset purchase. However, a 2016 European Union report found that 85% of offsets are not extra, which is often true for renewable-energy balances. Instead, they fail the additionality test because the wind farm or solar array will be built regardless of the carbon finance.
There are several ways to ensure that your carbon credits are attributable only to your company. “Double-counting” is a problem many registries recognize, and now have processes to ensure that the offsets you purchase are not sold to others. For example, you can track your purchases through the registry, where they’re stored digitally, so it’s easy for anyone who needs information about their ownership rights.
Finding high-quality carbon offsets
As travel and tourism companies become increasingly aware of the need to operate sustainably, many are looking to offset their carbon emissions as part of their broader sustainability strategy. However, it is essential to remember that not all offsetting projects are the same. In a positive light, some projects may offer additional benefits, such as social or secondary environmental co-benefits.
- Business travel sustainability is a growing field, and with that comes an increase in the options for carbon offset providers. So how can you be sure you select a reputable provider?
- Do your homework and look for a verified third-party business that meets the standards of globally recognized sustainability frameworks. You should also review the company’s sustainability report to understand its business practices.
- As we have said, there are many aspects to business sustainability, and carbon offsets can play a role in achieving emissions reduction goals. Still, it’s essential to be diligent in selecting providers and only purchase offsets that will result in actual emission reductions now and in the future.
- Using globally accepted offset standards is a great way to ensure you choose a project that meets your organization’s needs. The “Big Five” voluntary carbon offset standards are the most reliable and rigorous on the market.
- Climate Action Reserve (CAR) – The premier offset standard for the North American carbon market.
- Verra’s Voluntary Carbon Standard (VCS) – Verra is a non-profit organization that operates the Verra registry and several standards.
- American Carbon Registry (ACR) – A non-profit and the first voluntary greenhouse gas registry.
- Gold Standard (GS) – General certification standard created by the WWF.
- Plan Vivo – Standard for projects that support communities and smallholders in the developing world.
- By choosing projects registered with any of these standards, you can be sure that you are making a positive impact. Sustainability reporting and business Frameworks can also help you to choose an offsetting project that aligns with your organization’s broader mission and interests.
Finally, by looking beyond the carbon, you can ensure that your offsetting project has a positive environmental and social impact.