ENGIE Impact sustainability director on carbon offsetting

Director of Sustainability Solutions, EMEA at ENGIE Impact James Ramsay shares the carbon offsetting pitfalls and helps organisations grow sustainably

There are many queries surrounding carbon offsetting and whether it is a truly sustainable course of action. It can often be mistaken as a means of greenwashing, yet companies are still convinced that it will help deliver the end goal of decarbonisation. Companies invest in organisations that can achieve some great things, from reforestation to community outreach, actions which they otherwise cannot justify from a human resources or operational perspective. 

Director of Sustainability Solutions for EMEA at ENGIE Impact James Ramsay shares his thoughts on the pitfalls of carbon offsetting and how to avoid them.

What is the general trend around carbon offsetting at the moment? 

JR: Carbon offsetting has been a key part of corporate decarbonisation strategies for years, and during that time there has been an ebb and flow of progress, innovation and yes, criticism. Over the past 18 months there has been a particular and steady increase in media attention on the use of carbon credits by large corporate organisations. 

These articles — some justified, some potentially exaggerated — have generated a lot of noise around the integrity of the voluntary carbon market. No matter what side of the carbon market debate you end up on, one thing is clear: whether stemming from ignorance or malice, implementing offsetting the wrong way can create more problems than it solves. 

The further we move through this decade to deliver, the offset market will grow bigger and larger companies make larger claims. This will further drive increased scrutiny on the use of carbon credits to deliver decarbonisation objectives.

We believe that not only is it possible to build a carbon credit portfolio which will stand up to scrutiny and survive the test of time, but that in doing so, companies can drive far greater climate impact than they can do through internal decarbonisation activities alone.

Integrating carbon offsets

The general media presentation of offsets being a tool for greenwashing — used by irresponsible corporations looking to pay their way out of pollution — has been demonstrated to be a myth. Trove recently published data showing organisations that use offsets have decarbonised twice as fast as their competition. This means the organisations driving serious internal decarbonisation activity within their operations are the same organisations engaging in the voluntary carbon market.

This is because offsetting works when it’s a part of, not apart from, a corporate decarbonisation strategy — integrated within the company’s purpose, enhancing their environmental objectives, and serving as a financial tool to incentivise further decarbonisation. Offsetting is the lever organisations use to take care of emissions they can’t otherwise abate – the more they can abate, the fewer offsets they need. Of course, the specifics of how to utilise carbon offsetting will vary depending on industry and region, but any organisation should treat it as a part of their approach — not as a replacement of their approach.

How do we ensure the use of quality carbon offsets?

JR: There are many criteria that should be used to assess whether the carbon offsets being utilised are the quality they need to be. Not doing the due diligence up front can open up an organisation to public criticism or even legal action.

In a previous article, we outlined the key criteria for carbon credit quality and a simplified approach for sourcing a pipeline of high-quality credits while considering price and risk exposure. Organisations like the Carbon Credit Quality Initiative provide further guidance around issues like double counting, non-permanence, institutional arrangements and processes, environmental and social impacts, and more.

With everything at stake, it is the buyer’s responsibility to ensure the quality of the credits they use. Deep due diligence should be done on the carbon impact of the project, alongside financial implications, potential impact on vulnerable communities, the use of technological improvements, and more.

Claiming carbon offsets

While some criticism around how some companies have used carbon offsetting is valid, even organisations utilising quality carbon offsets have found themselves at the receiving end of public disapproval. How these programmes are communicated to employees, customers, shareholders, and the general public makes a difference. The quality of the claims made needs to match the quality of the offsets.

To ensure your claim is sound and consistent with your activities, accurate and concise messaging will play to your favour, while monitoring the ever-evolving regulatory environment.  

  • Precision: We all have a part to play in developing and disseminating accurate information, tailored to the audience, that effectively describes climate action, carbon offsetting, decarbonisation principles, and other relevant topics. Companies need to educate employees, consumers (and media institutions) not only on their corporate decarbonisation programme, but on sustainability principles and behavioural best practices for employees to follow.
  • Clarity: As organisations announce their decarbonisation goals, and specifically how they’re using offsetting as part of their overall strategy, they need to be transparent and specific about the credits they are using and the claims they are making. They need to develop and continually update guidelines around the ever-evolving language being used in the decarbonisation space and adopt an open-book approach that demonstrates the company stands behind the credits they are using to accomplish their objectives.
  • Compliance: Depending on the region or sector, there may be specific terms or phrases that are regulated. For instance, Germany is taking some action against claims around “carbon neutral” and France has similar guidelines around related terms. Claims that can or can’t be made, and how they can or can’t be phrased, may be part of the overall regulatory framework a company will need to keep up to date on and follow. 

Putting offsetting into practice

While there are changes and challenges around carbon offsetting, they have proven to be a valuable tool when utilised as part of an overall corporate decarbonisation strategy. Organisations that understand what carbon offsetting is, how they fit into the broader journey, and what steps should be taken to ensure quality offsets can confidently move forward on its decarbonisation journey.

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Other magazines that may be of interest - EV Magazine | Energy Digital

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