Carbon offsetting is a productive and cost-effective way to give back to the planet for your organisation’s impact on climate change.
Using the Carbon offsetting method to reach net zero is quite challenging and requires multifaceted strategies and systems to work with. A voluntary carbon offset is one such method that is helping companies to meet their ambitious climate targets wherein the greenhouse gasses are reduced and captured in the atmosphere their impact is quantified and carbon credits are earned for the carbon emissions.
After the COP26* meeting in November 2021, there was a strong message of long-needed climate action at a global level, after which there has been an unprecedented increase in voluntary carbon credits. Today, many companies across industries are working towards carbon offsetting to reduce their carbon footprint. According to Morgan Stanley data, the voluntary carbon offset market is expected to grow from $2 billion in 2020 to around $250 billion by 2050.
Do carbon offsets really help reduce the carbon footprint of businesses?
The answer is “yes”, today, organisations can minimise their carbon footprints by doing offsets, and can also aim for carbon negative by doing extra offsets to neutralize atmospheric harm. A few companies reduce carbon emissions and only offset what they can’t reduce at the moment whilst others emit but offset it elsewhere like organizing a tree plantation drive or investing in a renewable energy farm.
Getting started with carbon offsetting
The carbon offset today is one of the most effective ways to reduce the environmental impact that requires technology to reduce emissions, which is still in the nascent stage. Hence, the need of the hour is carbon offsetting with the available tech in logistics to create an immediate effective impact on the environment. If we look at ocean freight, basic cargo vessels have a span of 20 to 30 years and it will certainly take time and years until vessels are available that can easily use alternative fuel at a greater scale to show the impact of reduced carbon emissions. Many industries are working on the development of vessels that can use alternative fuels.
Looking at the bigger picture, the rise in demand and price for carbon offsetting is a positive sign. It indicates that more investments are being made in climate action, leading to the development of more climate action projects and technologies that help achieve Net Zero Greenhouse Gas Emissions. The increase in demand for voluntary offsetting credits also indicates that more companies are taking climate action and aiming to make a difference.
Why are companies targeting carbon offsetting?
On the surface, carbon-neutral businesses represent the growing awareness that we need to significantly reduce carbon emissions to restrict the worst impacts of environmental change. There are, many other reasons why companies are driving carbon offsetting:
Every entire industries relies on a healthy planet
Many companies and industries have realized that their entire industries are at risk if they don’t embrace sustainability to reduce carbon emissions. Regardless of the industry, every organisation is looking forward to or, paving the way and strategizing measures to reduce carbon emissions to tackle the disruption of environmental patterns. In many ways, reducing carbon emissions and purchasing carbon offsets are long-term investments towards a healthy environment and sustaining a global economy.
Organisations are driven by customers to take steps towards carbon offsetting
With global warming and extreme climatic events every year posing a threat to the way we live, consumers globally are choosing to partner with companies that share their environmental values. A recent poll indicated that while people liked the vision of sustainable and climate-friendly products – they didn’t always go out of their way to have them or work with like-minded partners. Fast-forward to today, one can find that sustainably branded consumer products are growing faster than 90% of their competition, highlighting a dramatic shift.
With customer’s demand increasing for sustainability, organisations are taking meaningful action – and being much more transparent about their environmental footprint.
Carbon neutrality has proven good for business
The organisations involved in carbon offset programs also get the drive to address and reduce the existing emissions. It’s an obvious fact, that when a company tries to offset every bit of carbon it creates, then there is also an ambition to reduce the size of the target by:
Reducing operating costs: Working on effective measures that reduce carbon emissions – like improving energy efficiency, recycling, conserving water, using natural lighting, and investing in renewables and electric vehicles – can also lead to incredible savings.
Increasing revenue: Today a lot of consumers support brands and companies that are carbon neutral and hence organisations are aiming for carbon offsetting and neutrality programs that can help increase sales and market share. Taking a positive step towards climate action is also proving to be an effective way to garner new customers and investors as today climate-conscious individuals and groups are interested in backing organisations with firm environmental goals.
Achieving happy and loyal employees: Climate action is an impressive way to align corporate and employee values, as reported by a 2019 study**. According to the study, 70% of respondents stated that a company’s sustainability plan would impact their decision to stay long-term, while 30% said they had already left a company due to its lack of an environmental vision. As more companies realise the advantages of addressing climate change, their competitors will be compelled to follow in their green footsteps or risk being left behind. With advantages such as lower costs, higher revenue, and happier employees, it’s not surprising that many businesses are investing in a low-carbon future.
In a nutshell
The awareness of environmental challenges on a global scale, catalysed by COP26, is driving an increasing demand for offsetting in the market. A growing number of organisations are now acknowledging the environmental and social significance of offsetting projects and are actively working to offset their carbon footprint.
As a responsible organisation and as citizens of the planet, we should leave no stone unturned to care for people and the planet.
*COP26 is the 2021 United Nations climate change conference that stands for ‘Conference of the Parties’
**The 2019 study was done by the organisation, ‘Swytch’ and the survey results showed that employees of all generations look to work for the companies with programs set in place to be more sustainable. The new generation is the most enthusiastic lot about pursuing and staying loyal to greener organisations.