What Next After 'Bewildering' Climate Offsetting Ban Call?

Carbon offsetting is a divisive topic in sustainability strategy. There are many arguments for and against it and an ongoing debate between the two sides. 

The most recent update? 

More than 50 major NGOs, including Oxfam, Greenpeace and Amnesty International, have signed an open letter titled Why Carbon Offsetting Undermines Climate Targets.

The move has left some leading sustainability execs feeling "bewildered".

What does the letter say?

The letter starts: “In the past few months, we have seen a growing push, notably with the public statement of the SBTi Board of Trustees, to allow companies and countries to use carbon credits to offset their emissions. This reflects a bigger trend of bending carbon accounting rules, undermining actual emissions reductions.

“Climate targets must focus primarily on reduction of greenhouse gas emissions within companies’ and countries’ own boundaries, including the phasing out of fossil fuel production, transport, sale and use. An urgent scale-up of financial support from both public and private actors is needed for this. But allowing companies and countries to meet climate commitments with carbon credits is likely to slow down global emission reductions while failing to provide anything like the scale of funds needed in the Global South, and reducing pressure to develop large-scale mechanisms such as “polluter pays” fees on emission-intensive sectors.”

The letter highlights concerns that carbon offsetting could delay climate action, that it lacks credibility, around the quality of offset, and that carbon offsetting widens the climate funding gap. 

It concludes: “We call for scientific, ambitious, equitable, robust, credible and transparent rules around carbon accounting and corporate climate target setting. Voluntary and regulatory frameworks on climate transition planning must exclude offsetting.”

What are execs saying?

“I'm bewildered – and disappointed – by the letter undermining the voluntary carbon market,” says Anna Lerner Nesbitt, CEO of Climate Collective.

“What bothers me the most is the disconnection to reality this letter portrays and how the signatories offer no solutions to the many actors – and ecological services and ecosystems – they leave hanging, with their stereotypical characterisation of the voluntary carbon market.”

She highlights that the voluntary carbon market is “a low-risk entry point for corporations on their climate journey” that supports companies working out where and how to finance climate pledges. 

“Research has shown that groups that buy carbon credits are more ambitious in their internal decarbonisation work and in fact decarbonise at a greater speed than those who don't,” she continues. 

“For an environmental non-profit, living in this reality, to publicly undermine the only market mechanism we have that can increase ambition and capital towards meaningful climate action without regulation makes no sense.”

Alexis Leroy, Founder and CEO of the ALLCOT Group, agrees: “It is crucial to defend carbon markets, especially the voluntary market, which for over 20 years has enabled concrete actions on the ground.

"While negotiations around Art 6 continue to stall, the VCM has been delivering tangible and measurable climate and social benefits. These markets are not perfect, but let's remember that NGOs are far from perfect, international negotiations are often flawed and many of the mechanisms that led us to our current economic and social situation demonstrate that the world is not perfect.”

Leaders on the fence

“I believe it is absolutely legit to question the voluntary carbon market and SBTi after recent behaviours and findings, and what they are mentioning about the IPCC is true: offsetting is not scientifically accurate or accepted as a viable option by the scientific consensus,” says Laura Ortiz Montemayor, Chief Purpose Officer at SVX Mexico and GP at Regenera Ventures Fund.

“I am also conscious they could have done a better job of focusing on the 'how to do things right’ instead of outright saying the VCM is not helpful at all. The keyword missing in their letter should be "insetting" and the wonderful opportunity that presents for the corporate world to redirect their climate focus and budgets to their actual core operations.”

Dan Smith, Offshore Wind Biodiversity Solution Owner at Fugro, disagrees:  “The mitigation hierarchy clearly states that you first avoid emissions and the last thing you do is offset them. It's not an on ramp, it's a last resort for those hard to abate emissions,” he says.

“Companies should be reducing their emissions first before considering carbon credits. It's not that hard, plenty of people will do a 3 scope emissions assessment. 

“The positions set out in the letter are entirely reasonable. The quality of credits are poor, the MRV is bad quality and the price of VCC is too low.”

This follows H&M coming out in disagreement with SBTi’s pro-carbon offsetting stance.

In the letter to the SBTi’s Board of Trustees, H&M Group’s Head of Sustainability Leyla Ertur writes that it “weakens corporate climate pledges and makes real decarbonisation efforts within value chains less attractive.”

She says: “We firmly believe the priority for any climate strategy should be to take action within corporate value chains to reduce absolute greenhouse gas emissions.

“We have two main concerns with the statement. First, the decision weakens corporate climate pledges and makes real decarbonisation efforts within value chains less attractive.”

It seems that the carbon offsetting debate continues – what do you think?

Which organisations have signed the letter?

Organisations supporting this statement:

AbibiNsroma Foundation

ActionAid International

Amazon Watch

Amis de la Terre France / Friends of the Earth France

Amnesty International

AnsvarligFremtid

Association For Promotion Sustainable Development

Association of Ethical Shareholders Germany

BankTrack

Beyond Fossil Fuels

Biofuelwatch

BUNDjugend (Young Friends of the Earth Germany)

Canadian Unitarians for Social Justice

Carbon Market Watch

CEE Bankwatch Network

Center for International Environmental Law (CIEL)

Center for Sustainable Economy

Changing Markets Foundation

Christian Aid

ClientEarth

Climate Action Network Arab World

Climate Action Network Australia

Climate Action Network Canada

Climate Action Network International

Congo Basin Conservation Society CBCS-Network

Deutsche Umwelthilfe e.V.

Dogwood Alliance

Earth Action, Inc

EcoEquity

EcoNexus

Environmental Coalition on Standards (ECOS)

European Environmental Bureau (EEB)

EnergyTag

Environmental Defence Canada

Environmental Investigation Agency (EIA)

Ethikis - Label LONGTIME®

Facing Finance

Fastenaktion Switzerland

Fern

Finance Watch

Focus Association for Sustainable Development

Forests of the World

Fresh Eyes

Friends of the Earth Europe

Friends of the Earth Ireland

Friends of the Earth Spain

Friends of the Earth U.S.

GAIA - Global Alliance for Incinerator Alternatives

GLOBAL 2000 - Friends of the Earth Austria

Global Energy Monitor

Global Witness

Greenpeace

Iceland Nature Conservation Association

Institute for Agriculture and Trade Policy

Institute for Sustainable Development Foundationm.

Just Share

JVE International

LIFE Education Sustainability Equality

Methane Action

Milieudefensie - Friends of the Earth Netherlands

Mom Loves Taiwan Association

New Climate Institute

Nipe Fagio

NOAH - Friends of the Earth Denmark

Notre Affaire à Tous

Oil Change International

Oxfam

Peace Movement Aotearoa

Power Shift Africa

Rainforest Action Network

Reacción Climática

Reclaim Finance

REVO Prosperidad Sostenible

Rinascimento Green

Secours catholique - Caritas France

ShareAction

Sociedad Amigos del Viento meteorología-ambiente-desarrollo

South Durban Community Environmental Alliance

Southern Africa Region Climate Action Network (SARCAN)

Stand.earth

Transport & Environment

Union of Concerned Scientists

Urgewald

ZERO

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