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Walking the tightrope to carbon neutrality

What steps should businesses take to become carbon neutral with credibility?

As the world awaits an outcome from the negotiations in Paris, few businesses will be unaware of the mounting pressure on them to clean up their act on carbon.

It is unlikely that any agreement thrashed out at the climate talks this week will go far enough to immediately solve the problem of a continuing rise in global temperatures, but there is a sense of optimism that the tide of political will is finally turning — and with that, a growing onus on business to be part of the solution.

But what does this mean for companies ready and willing to take action? Going carbon neutral will be the obvious goal for many firms, and on the face of it, it’s a simple concept. But just how does an organization go about cancelling out its greenhouse gas emissions? And, importantly, how does it do so in such a way that doesn’t break the bank or open the organization up to accusations of greenwash?

The answers are out there

How a company goes about becoming carbon neutral will depend heavily on the type, size and location of that business, but what will underpin any successful scheme is a credible and robust process that is tailored to that company and based on best practice and good science.

The danger for any business is making unsupported claims of carbon neutrality — which, at a time of increasingly vociferous public concern over climate change, could have potentially disastrous consequences for a company’s reputation.

In response to this, a number of globally recognized standards, such as Natural Capital Partners’ CarbonNeutral Protocol and BSI’s PAS 2060, provide businesses with a set of requirements for achieving and demonstrating carbon neutrality that is practical, internationally accepted and scientifically informed. Early adopters of carbon neutrality have been using such standards to provide the framework to their programs and to give their claims of zero carbon status credibility and transparency for several years.

Companies that are serious about becoming carbon neutral must keep credibility front of mind, and ensure they are following a standard that ensures they get it.

Jonathan Shopley, managing director of Natural Capital Partners, advised any business looking to become carbon neutral to do the research before taking any action.

"Too many businesses have found out the hard way that the road to carbon neutrality is peppered with potholes," he said.

"Achieving carbon neutral status is about tailoring a program around an individual company’s needs that is robust, achievable, and above all centered around good science. Companies serious about becoming carbon neutral must keep credibility front of mind, and ensure they are following a standard that ensures they get it."

Striking the right balance

For most companies, achieving carbon neutrality will be through a mix of internal emissions reduction measures and external measures including carbon offsetting and using renewable energy certificates. Experience in the field has shown that very few companies realistically can meet targets solely in-house, and that these external programs are a vital part of most businesses’ carbon neutral achievements. Furthermore, many credible options are available that go far beyond simply providing carbon reductions, by also directing finance to parts of the global economy where it is most needed for social and sustainable development.

U.K.-based retailer Marks and Spencer (M&S), for example, has achieved carbon neutrality through the combination of in-house measures — such as LED lights, energy saving in stores and renewable energy installations — and financing emissions reductions overseas through offsetting, including supporting UNICEF in supplying energy-efficient cook-stoves in Bangladesh and a deforestation prevention scheme in Kenya.

But as Carmel Mcquaid, head of sustainable business at M&S, points out, the company’s focus on carbon neutrality always has been in the wider context of its Plan A program, which aims to help protect the planet by sourcing responsibly, reducing waste and helping communities from where it sources.

"A highlight of carbon offsetting is that it allows us to get a bigger bang for our buck, delivering multiple environmental and social benefits in addition to reducing carbon while also supporting our supply chains overseas," she said.

M&S is one of a comparatively small number of companies already to have achieved carbon neutrality, although that may be about to change. According to Mcquaid, because much of the groundwork already has been done by early adopters and industry specialists, combined with growing government support, becoming carbon neutral today is more compelling than it ever has been.

For most companies, achieving carbon neutrality will be through a mix of internal emissions reduction measures and external measures including carbon offsetting and using renewable energy certificates.

"Businesses can now have peace of mind that when they invest in an offsetting scheme that it will be credible and effective, which has not always been the case," said Mcquaid. "There’s also so much choice now that companies can select portfolios that can match their broader needs.

"This is the perfect moment for businesses to jump in."

This view was bolstered last week by Unilever’s pledge to become carbon positive by 2030. The consumer goods behemoth wants to help tackle climate change through its own operations and encourage other companies to accelerate their own efforts to curb emissions.

U.S.-based financial products and services company Intuit Inc. is already one step ahead of the game, having committed in 2014 to becoming carbon neutral through a combination of internal science-based reduction goals and a comprehensive program with Natural Capital Partners.

Sean Kinghorn, senior sustainability program manager for Intuit, said the decision was made "because the planet can’t wait."

"'We care and give back' is a core company value at Intuit, so we would never approach a customer-facing problem like climate change with a 'do less bad' approach. Through our carbon neutral ambitions we are trying to give back to the planet more than we take," he said.

Kinghorn advised any company thinking about embarking on a similar journey to ask themselves whether doing less bad was their business model.

"If it isn’t and you want to do more, then going carbon neutral is a good way to start," he added.

Taking action, carefully

Time has all but run out for businesses thinking they can continue to take no action on climate change. With growing political determination and consumer demand, the pretext for inaction has been pulled from under their feet. Once the dust settles in Paris and the politicians have gone home, businesses are likely to find themselves under unprecedented pressure to act, and this time with the world watching.

Different solutions already exist for different businesses, and for many that will involve going carbon neutral. But businesses that do so will need to be able to make credible and transparent claims of achieving net zero carbon emissions that hold up to scrutiny. Get it wrong and they put their reputations at risk; get it right and they will reap the rewards. Now is the time for smart and informed action.

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