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Corporate carbon offset buyers go the extra mile in fighting climate change
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Corporate carbon offset buyers go the extra mile in fighting climate change

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Excerpt from an article originally published on Ecosystem Marketplace - Author: Gloria Gonzalez


Automaker General Motors, financial institution Barclays and cosmetics company Natura Cosméticos couldn’t be more different companies. But they all have one thing in common: they are top voluntary buyers of carbon offsets and pursue these purchases as part of comprehensive carbon management strategies.

A new Ecosystem Marketplace report called The Bottom Line: Taking Stock of the Role of Offsets in Corporate Carbon Strategies dispels the myth that companies purchase carbon offsets to avoid taking responsibility for their contributions to climate change.

Rather, 14% percent of companies publicly disclosing climate change information to the CDP’s (formerly the Carbon Disclosure Project) annual survey practice “offset-inclusive carbon management,” meaning that they are investing in hundreds of unique emissions reduction projects in addition to directly reducing their climate impact through energy efficiency, improved product design and other measures. Offset buyers tracked by CDP spent $41 billion in 2013 to make their buildings and processes more energy efficient, install low-carbon energy, switch to cleaner transportation, design more sustainable products, and engage customers and employees around behavior change.

There’s a common misperception that offsetting is a way for companies to ‘buy their way out of the problem,’” says Allie Goldstein, Senior Associate at Ecosystem Marketplace and the author of the report. “But when you dig into the CDP data, it’s clear that offset buyers are actually just using more of the tools at their disposal to reduce emissions, and they’re investing in these activities at a higher rate compared to companies that don’t offset.

This new report analyzed data from 1,882 corporate climate performance disclosures collected by CDP in 2013 and 2014.

Offsetting is an indicator of a deeper climate commitment, with offset buyers engaged in activities that reduce their internal emissions at a higher rate than companies that do not buy offsets, according to the report. The typical offset buyer slashed almost 17% of their Scope 1 (direct) emissions in 2013 while non-buyers only reduced Scope 1 emissions by less than 5% in the same year. Offset purchases are one way to neutralize Scope 3 (indirect) emissions that occur upstream in a company’s supply chain or downstream in consumer’s use of the company’s products – emissions that are difficult to reduce by other means.

The majority of companies (214) offset emissions voluntarily, compared to 56 CDP-reporting companies that purchased offsets to comply with regulations. Companies based in regions with regulatory carbon pricing programs were more likely to buy carbon offsets, even on a voluntary basis, than companies based in locations without a cap-and-trade system or carbon tax. The European Union, home of the EU Emissions Trading System (EU ETS), hosts the largest number of buyers – both compliance-driven and voluntary – since even companies in unregulated sectors are more familiar with market-based mechanisms for emissions reductions.


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