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October/November, 2007

You’ll no doubt have read about all these businesses that have “gone carbon neutral,” and thought, ‘Gee, that’s great, I’ll go buy their products.’ Scratch the surface of these claims however and, in some cases, a different picture emerges.

The first and most primary problem with claims of carbon neutrality is that there is no objective definition of the term “carbon neutral”. For some it simply means planting some trees. For others it means donating money or investing in renewable energy projects such as dams and wind farms. For others it’s simply another name for “green-wash”.

If your business is sincere about responding appropriately and responsibly to the climate challenge – unarguably the greatest challenge ever to have faced humanity – your efforts run the risk of being tagged as a green-wash simply by association. This is bad for you, bad for business and acts as a brake on genuine progress at a time when we all need to be doing our very best to curb our carbon emissions.

So what is to be done? Firstly reject all glib claims of carbon neutrality and look at the processes by which a business has eliminated its carbon footprint. Ask to see a greenhouse gas emissions audit, performed by an independent, credible body, that explains not only how much greenhouse gas the business’s operations produce, but explains in detail the way in which these numbers were computed. The emissions audit should at least comply with the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard developed by the World Council for Sustainable Business Development.

For an audit of a manufacturer, the requirements are stricter again, with a full Life Cycle Analysis audit being required for each product.

Once you have seen the audit, look at what your business is doing to reduce its emissions. The audit will show you the major sources of emissions, but a genuine commitment to action is incomplete without looking at ways to reduce your major emissions through behavioural and structural changes. Your business must make an ongoing, year-on-year commitment to emissions reduction.

The third step is for your business to offset those emissions it can’t yet reduce, using formally certified carbon credits. Direct investment in wind farms and tree-planting schemes is a little like giving money to street-beggars. There are no guarantees that the money you hand over will be spent on measurably removing emissions from the air, or keeping emissions from reaching the air.

It’s very important, both in terms of actually achieving a result and being seen to be achieving a result, that you actually purchase enough genuine carbon credits to offset the emissions you cannot otherwise reduce.

Many carbon credit companies refuse to transfer ownership of the credits to their customers, and cite all manner of operational reasons why they don’t. Do not accept these excuses. To be accountable and transparent, a carbon credit scheme must transfer legal title to the customer. The purchaser must then complete the transaction by retiring, or surrendering the credits they have bought. Retiring and surrendering credits is essentially the same way of saying that the credits have reached their end-user and may no longer be traded. Their work has now been done.

Expose the audit to public scrutiny. Explain the changes you are making to reduce your emissions to your staff, shareholders, customers and the wider community. And highlight the credibility of the carbon credits you have bought and retired. Fail to be genuine in any of these steps and you’ll find it impossible to communicate your achievements with clarity and honesty, and you will be exposed as a green-washer. And any good work you thought you had done will be offset by a storm of bad press.

My company, Carbon Planet, recognised very early that the term “carbon neutral” had been stripped of any veracity. In response to this we established our own trademark – CO₂ free^TM – that embodies our mantra of “measure, reduce, then offset”. To be allowed to use the CO₂ free^TM mark you must have undergone a formal emissions audit, made an ongoing commitment to behavioural and structural changes to reduce your carbon footprint, and offset any emissions you cannot naturally reduce through genuine carbon credits. By going CO₂ free^TM you can be confident that your good work will stand up to scrutiny.

Dave Sag is the CEO of Carbon Planet, a global carbon emissions company. Carbon Planet consults on all things carbon, ranging from conducting formal carbon emissions audits and ghg life-cycle analysis, to comprehensive carbon matchmaking and helping projects generate their own carbon credits. Carbon Planet builds emissions calculators and retails carbon credits to the general public and business alike.