Can Carbon Credits Aid in Sustainability?

According to Convervation.org the carbon credit meaning is, “A carbon credit represents a reduction of 1 metric ton in greenhouse gas emissions to compensate for 1 metric ton of emissions made somewhere else. A credit can be bought, sold or traded before it is “retired,” meaning it cannot be traded again, assuring that only the buyer can claim emissions cuts associated with that credit.” In other words, a carbon credit is a purchased “item” that will offset emissions that you or your business produces, whether it’s by planting trees or aiding water conservation, and when you meet the “1 metric ton” of emissions, the credit is retired and cannot continue to be purchased. Sounds great, right? Whatever emissions are produced are going to be offset in some way. Although this is great, in theory, let’s look at the flip side of the coin.

Unfortunately, carbon credits can be used in unintended ways. These credits should not be used as a sign-off to continue creating carbon emissions. Carbon emissions, even though stated to be “offset,” still endanger our world and continuing to produce carbon and writing it off as an expense for your budget is risky; we should all be doing our part to lesson our carbon footprint and working toward ways to better our world and not use other means to continue our damaging ways. There’s also the issue of buying credits for projects already in the pipeline or not even permanent. According to NBC News,

“…the international soccer governing body FIFA bought credits to help offset emissions from the World Cup in Brazil. But soon after, the trees were cut down. The project was suspended in 2018 after more trees were logged than all the credits sold.”

Looking at these examples show that there are very big gaps and disconnections between the credit purchaser and the project developers. Again, the point of sustainability, and specifically ESG (Environmental, Social, Governance: download our ESG whitepaper here), is to have everyone work towards a sustainable future and curtailing emissions and transactions that are depleting our earth of its resources. In the Time article, “Bogus Carbon Credits are a ‘Pervasive’ Problem, Scientists Warn”, they mention  “a Bloomberg investigation found that almost 40% of the offsets purchased in 2021 came from renewable energy projects that didn’t actually avoid emissions.” In other words, purchasing carbon credits does not mean that your emissions will be offset 100%, or even 50%. So, one carbon credit can still mean hundreds of kilograms of carbon being released although the purchaser continuing produce 1 metric ton for every credit. This sounds like greenwashing (read our blog How To Avoid Greenwashing with the Support of DQS External Verification to learn more).

If carbon credits aren’t what they seem to be, what else can your business do to better support Sustainability? Are you just taking your first step into becoming more sustainable? Take a look at what you’re currently doing: are there processes that can be streamlined or eliminated. Pursuing ISO 14064 certification can help your business get a full picture of its carbon footprint and aggressively work to lower emissions. ISO 14064 provides a framework for quantifying and reporting greenhouse gas emissions at an organizational and project level. This includes guidance on monitoring and accounting for emissions reductions or carbon offsets over time. Getting externally verified to the ISO 14064 standard can help boost credibility in your climate stewardship efforts and provide ongoing guidance on meeting evolving emissions targets and regulations. If sustainability isn’t new, but you’d like to take a look at where you’re at before next steps, DQS offers the self-assessment “ESG Fast Forward” to help you determine if your business is where you think it should be or if there’s more to do to meet all that is encompassed in ESG. DQS Also offers ESG Reporting, ISO 50001 certification, LCA Assessment according to ISO 14040 & 14044, and more to aid your business advance it’s footing in sustainability and conservation. Are you looking for training? Whether it’s ISO 14001 Internal Auditor or Training on Sustainability and ESG Reporting for Organizations, DQS Academy is here to support your sustainability goals. Speak with us today about the options we have by speaking with Ashley Davis, Ashley.davis@dqs.de, Regional Sales Manager, to get started.