Where does offsetting fit in a robust carbon management strategy?

• firstly, focus on its direct emissions, reducing their carbon footprint and creating bottom line savings by implementing all cost effective energy efficiency measures and, where cost effective, reducing the carbon intensity of its energy supply by developing low-carbon energy sources such as on-site generation;
• secondly, look at opportunities to reduce its indirect emissions, working with other organisations to develop strategies to reduce emissions and cut costs up and down the supply chain and to look for new revenue opportunities such as developing new low-carbon products; and
• then, if appropriate, consider the option of developing an offset strategy that purchases only high quality offsets from verified projects that create truly additional emissions reductions.

In our experience of working with companies across the UK on emissions reduction, this approach of focusing on direct and supply chain emissions should deliver bottom line financial and carbon savings year on year. And for those organisations considering buying offsets, this approach reduces the number of offsets that they might need to purchase.

Offsetting allows organisations to indirectly reduce their carbon footprint through the purchase of carbon credits associated with emissions reduction projects (such as energy efficiency and renewable power) that have occurred elsewhere, typically in developing countries. There are a number of business reasons why organisations may want to offset their emissions, including an improved Corporate Social Responsibility position, better brand positioning, or using offsets as a way to internalise the cost of carbon and to anticipate and prepare for future legislation. Not all companies will buy offsets. Those that do need to ensure that they buy good quality offsets from projects that deliver true additional reductions. These projects should comply with an additionality test to demonstrate that the emission reductions achieved are over and above what would have happened in the absence of the project, and be periodically verified by an independent third party to confirm that the emissions reductions achieved are real and have taken place.

To support organisations to reduce their carbon emissions the Carbon Trust offers a series of products and services, including onsite energy surveys, carbon management (a bespoke service to help organisations understand the business risks and opportunities associated with climate change) and financial products to help SMEs and public sector organisations to implement the required changes. In addition, for those organisations wishing to buy offsets as part of an overall emission reductions strategy, the Carbon Trust can help them to navigate the offset market. For more details of all the Carbon Trust’s products and services please contact the Carbon Trust Customer Centre on 0800 085 2005.