Carbon offsetting involves companies compensating for their emissions by investing in projects that reduce or remove pollution, like planting trees, using clean energy, capturing methane, or saving energy.
Some argue that carbon offsetting offers a practical and immediate way to address climate change while transitioning to a low-carbon economy. Others contend it is a form of greenwashing, allowing companies to avoid making meaningful changes to reduce their own carbon emissions.
At Luminous, we believe that offsetting alone isn’t enough to cut pollution. We advocate that companies first focus on cutting their emissions from their value chains, operations and products. After making substantial efforts to cut pollution, they can then consider using offset initiatives to compensate for any remaining emissions.
How could carbon offsetting be considered a form of greenwashing?
Some companies have been accused of greenwashing by purchasing unverified carbon credits or by not prioritising their own emission reductions. Greenwashing also occurs when companies ‘double count’ these credits, misleading the public into thinking they are more committed to reducing carbon emissions than they truly are.
Additionally, the terms used for carbon offsets can be confusing, leading to public misunderstanding. For example, various names like ‘economic instruments for net zero’, ‘market-driven net zero solutions’ and ‘green investments’ all refer to the same ‘carbon credits’ concept in sustainability reporting and communications.
Recent controversies, such as the SBTi debate on potentially loosening offset rules and the ASA’s rulings against Ryanair, Lufthansa and HSBC, highlight the sensitivity of greenwashing in carbon disclosures. Therefore, it is crucial to handle it correctly.
How to avoid greenwashing in your carbon emissions disclosures
- Prioritise reduction: Engage in carbon offset programmes only after making significant efforts to reduce GHG emissions. Reducing emissions should always come first, regardless of carbon offsets.
- Transparency: Provide clear and honest information about your carbon emissions, long-, medium- and short-term reduction efforts, and any offsetting strategies.
- Avoid vague language: Refrain from using overly optimistic or vague language that might exaggerate emission reduction efforts. Use concrete and verifiable statements instead.
- Provide context: Put emissions data in context by comparing it with industry benchmarks, historical performance, or emission reduction targets.
- Use specific metrics: Quantify emissions accurately using metrics like CO2 equivalents and emissions intensity.
- Accountability: Monitor crucial criteria in carbon offset programmes, such as transparency, registration in an offset registry, and adherence to clearly defined protocol.
For more tips on avoiding greenwashing, check out my other articles: Dos and don’ts: Keeping it real in your sustainability messaging and Greenwashing in the spotlight. If you want to reduce the risk of greenwashing in your sustainability communications, please feel free to get in touch at sarah.roper@luminous.co.uk.
