Executive Tutorial, Part 3: Our recommendations to offset CO2

Executive Tutorial, Part 3: Our recommendations to offset CO2

  • Post author:

At this point, you should feel comfortable with the concepts and terminology of CO2 compensation. However, how do you choose between so many projects? What kind of certifications or projects fit your company’s culture? How much should you invest and how do you communicate it to your community? In this last section, we present some recommendations based on our experience.

How to choose a project?

In general, a project should transmit to you the confidence that it fulfills its role in reducing CO2. When assessing projects, we recommend getting answers to the following questions: Which percentage of your contributions actually goes into the project? How will the money be used? How does the project ensure that it fulfills its promise? For how many years is the project going to be operated and how does it ensure its operation until it ends? What will happen when it ends? What is the proportion of income from certificates versus other sources? What would happen if the project did not exist? Has 100% of the compensation been validated and verified by authorized external auditors?

Reputable third party certifications, such as those presented in previous sections of this tutorial, are the basis for trusting a project. In theory, all certified projects are good candidates. However, you shouldn’t blindly be guided by certifications; we advise inquiring in deep about two key criteria: additionality and permanence. That is to say, that the compensation would not happen anyway without the project and that the CO2 compensated would not return to the atmosphere afterwards.

Also, certifications say little about the laws, regulations or the political situation in which a project is subject. For example, imagine a forestry project that meets all the requirements to receive a certification, but the Government does not systematically support nor enforce forest conservation; therefore, the effort and investment made by your company to offset CO2 could be at risk.

Considering this, a practical way to choose a project is to delegate this task to a specialist, such as greenclicks, which is in charge of selecting the projects for you; specialists should answer all the previous questions.

How much to invest?

For the planet, the best answer is “as much as possible”. Even if all companies were CO2 neutral, it would still be necessary to continue offsetting to achieve global CO2 neutrality. But, just as important – or even more important – than the investment itself is its continuity. If a company compensates once, the positive impact on the atmosphere is minimal. The individual compensation of a company is insignificant in relation to what is required to solve the environmental problem. When a company influences its community or industry, the impact is greater, thus achieving structural changes in society.

When in doubt, we propose to start conservatively and increase your commitment in a financially sustainable way. Ideally, you should consider the CO2 compensation as an integral part of your service or product. Thus, a percentage of the sales margin or a fixed amount could be allocated for each sale, order or subscription.

What kind of options exist to offset CO2?

From our experience, we know the following options:

The company compensates individually: The goal is to compensate the emissions that cannot be reduced to achieve the company’s CO2 neutrality. Normally, with the help of an external consultant or a software, business processes are analyzed to estimate how much CO2 is emitted.

Advantages: The company is aware of its emissions and makes a commitment.

Disadvantages: The financial risk, if big payments are made above all in advance to lower costs. And the risk of sacrificing quality by shopping for cheap compensation certificates to meet the sole goal of CO2 neutrality.

The client compensates: The goal is to raise awareness of the CO2 problem and make it easier for the client to compensate. Companies offer the client the option of paying an extra amount to offset CO2 emissions.

Advantage: The company is concerned about the environment and transparents the information about the damage to the environment when purchasing its products, without necessarily investing directly in compensation.

Disadvantage: Responsibility is transferred to the client, compensation is not offered as part of the product but as something optional; the company does not make a commitment to the environment itself.

The company compensates with its customers: The company incorporates compensation into its production costs. By purchasing a product, the customer knows that they are contributing to offsetting CO2. Compensation is not optional. CO2 neutrality is not necessarily the goal, companies rather seek to create the greatest possible impact.

Advantages: No calculations nor estimation are needed, the company only compensates if it is selling successfully, it can even compensate beyond neutrality. Customers are involved in the compensation process, they realize during the purchasing process that the company contributes to sustainability.

Disadvantages: A company could be tempted not to reduce its emissions and only offset them. Customers may perceive that consuming is positive for the environment.

How to communicate it?

In general, we think that it is always better to do something than to do nothing, even starting with small steps. To be consistent, the communication should explain to clients: Why did you decide to compensate, how are you compensating and what impact do you expect to achieve with compensation. Also, sooner or later, discuss your own emissions and ask yourself how to avoid and reduce them.

On the other hand, the communication style should call to action, beingt it customers, competitors, the community. The company should avoid displaying itself as a “lonely hero” and rather present itself as one of many actors confronting a global problem.

Closing comments

We hope we have given you a good foundation to understand the world of CO2 compensation and to be able to make your decisions now. We look forward to welcoming you to the community of CO2 offsetting companies.

We have to add that this tutorial obviously does not claim complete accuracy or completeness on the subject. We are devoted to updating and improving this tutorial over time.