New report shows corporate offset buyers going the extra mile in fighting climate change

by Nadia Kähkönen at 20 Mar 2015

The new report from Forest Trends’ Ecosystem Marketplace dismisses the myth that companies purchase carbon offsets simply to avoid taking responsibility for their contributions to climate change. According to The Bottom Line: Taking Stock of the Role of Offsets in Corporate Carbon Strategies, companies that include offset purchases as part of their carbon management strategies are more environmentally proactive than their non-offsetting counterparts. The new report supported by south pole group analyses the public submissions of over 1,880 corporates to the CDP (formerly known as the Carbon Disclosure Project) on their climate-related activities in 2012 and 2013.

The report compares companies that purchased carbon credits for offsetting and those that did not. Key takeaways from the report include the following:

  • Offsetting is becoming more common: out of 1800 companies reporting to CDP in 2013, 265 firms purchased carbon offsets, of which the majority (214 firms) did so voluntarily. The latter belong to the transportation, finance, insurance, services and technology sectors and most are located in North America (50) and Europe (92). 76% of emissions of CDP reporters stem from emissions that companies cannot control directly. However, companies can compensate for these emissions through offset purchases.In 2013, CDP disclosers voluntarily offset 16.5 Mt, which is roughly ¼ of the emissions they reduced directly. In other words, offsetting increased these companies’ collective mitigation impact by 25%.
  • Offsetting is sometimes stigmatised as a practice to buy one's way out instead of taking real action to reduce emissions. The data of the report actually show the contrary: offset buyers are more engaged in direct emissions reductions activities compared to companies that don’t offset.
    • Offset buyers slashed almost 17% of their direct emissions in 2013, while non-buyers only reduced direct emissions by less than 5% in the same year.
    • Offset buyers were more engaged in energy efficiency, low carbon installations, emission reduction activities in transportation and processes and product design compared to non-offset buyer

Corporate efforts to mitigate the impact of carbon emissions from their direct operations and supply chains have started to gain increasing prominence in the lead-up to the international climate talks that begin on November 30th in Paris, France. Carbon offsetting can support corporate mitigation goals in several ways: for some companies, offsets are a way to neutralise the carbon footprint of a product after exhausting all other means of cutting emissions.

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