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Sustainability is no longer just a buzzword. The effects of climate change can no longer be ignored and scientists are calling for governments and organizations to act. More and more people have become environmentally conscious and they’re using their power as consumers to compel businesses to go green. A staggering 85% of consumers today choose to support brands that offer sustainable products and services.

This shift in consumer behavior has made sustainability a business strategy. Now, the sustainable transformation of a business both serves to benefit the environment and the business itself. 

Businesses have plenty of sustainable development strategies to apply, but among the most controversial of them is carbon offsetting.

What is carbon offsetting?

The act of carbon offsetting is done by investing money in green projects somewhere else in order to “offset” the carbon released by a business into the atmosphere. In simpler terms, a company pays to have dirt cleaned up somewhere else to cancel out the dirt it created in its operations. Businesses that offset their carbon aim to neutralize their emissions without having to implement big changes in how they operate. The green projects often used for carbon offsetting typically take place in developing countries where funding is scarce. 

Carbon offsetting — the criticisms 

Compared to other green practices, carbon offsetting looks insincere and exploitative. Critics argue that carbon offsetting is just being used by corporations to avoid changing their environmentally destructive practices. By purchasing carbon offsets, a mega-corporation can say its operations are carbon neutral without doing anything substantial like investing in renewable energy.

Another criticism of carbon offsets is regarding tree planting. It used to be that many offsetting projects were tree planting initiatives, which is good for the environment down the road, but it doesn’t provide any immediate benefit whatsoever. Considering how little time the world has before the 2030 deadline set by the Intergovernmental Panel on Climate Change, spending our resources on efforts that don’t have an immediate impact is not the way to go. 

Despite all of this, carbon offsetting has a real function and can be a positive force when done correctly. In response to criticism, carbon offset projects have shifted to ones that provide an immediate benefit to the environment, economy, and society. 

Carbon offsetting — the benefits

Offsetting projects that are executed correctly have a net positive effect on the environment and the communities involved. It’s a far cry from reducing carbon emissions, but it’s surely better than nothing. 

Not all businesses can reliably cut carbon emissions

Some businesses have no feasible way of significantly reducing their carbon emissions either because the nature of their operations prevents it or their emissions are negligible, to begin with. Carbon offsetting provides these organizations an opportunity to contribute to the world’s carbon reduction goals while still keeping their business running.

Helping projects secure funding

As mentioned above, most carbon offset projects take place in developing countries where funding is hard to come by. When corporations and organizations fund these projects to offset their emissions, they provide them the financial help they otherwise wouldn’t get locally. 

Keeping track of carbon footprint

Carbon offsetting can function as a way to track or measure an organization’s carbon footprint. Before any business can buy carbon offsets, it first needs to account for its carbon emissions in order to determine how much it needs to offset to cancel out its emissions.

Should your business offset carbon?

We’ve already discussed criticisms about carbon offsetting and how it can contribute to a sustainable future when done properly. However, the decision to offset carbon emissions will still lie in each business’ situation. Business owners seeking to find a conclusion should know how carbon offsetting can be a boon to their business.

Alignment with ESG standards

Despite being the odd one out among decarbonization practices, carbon offsetting also puts businesses closer to ESG (Environmental, Social, and Governance) standards. ESG is the measurement investors use in determining which businesses are socially responsible or not. A better alignment with ESG standards means being favored by today’s investors.

Excellent short-term add-on

Businesses that are sincere and determined in their sustainability efforts can practice carbon offsetting as an add-on initiative. Achieving zero-carbon is the long-term goal but instead of solely focusing on working towards it, businesses can offset their emissions, too, if they can. The environmental projects they help fund will neutralize their footprint and positively impact the environment and surrounding communities. The bonus? They won’t have to wait years for these benefits to kick in.

Attract and retain talent

A company that shows sincerity in its carbon reduction efforts and does carbon offsetting properly is preferable for the bulk of the young workforce. A study in 2019 found that 73% of people would prefer to work for a company that practices sustainability. If you want to hire the best people and keep them, carbon offsetting can help you out. Just make sure you are doing it properly and it’s not the only thing you’re doing, sustainability-wise.

Conclusion

It can be said that carbon offsetting is in the gray area, but when done correctly and with sincerity, it offers a lot of benefits. Businesses looking to offset carbon need to make sure the projects they’re funding are VCS or VGS-certified to ensure their offsets are actually doing something. But no matter the benefits of carbon offsetting, we should keep in mind that the end goal is to reduce our carbon emissions, not just cancel them out.