Offsetting your emissions and becoming carbon neutral are two phrases that are commonly associated with each other. While offsetting is an integral part of being Carbon Neutral Certified, there are distinguishing differences between the two. It is important to comprehend these differences when an organisation wishes to produce credible measurements and carbon reports.
What is Carbon Neutral?
Becoming a carbon neutral company (also referred to as claiming carbon neutrality), is where an organisation neutralises the impact of its carbon footprint by either reducing its emissions or purchasing carbon offsets. This ensures that a business offsets as much carbon as it emits.
Being carbon neutral requires an organisation to measure its carbon footprint. This means that both direct and indirect (scope 1, 2 and 3) emissions are calculated and quantified in tonnes of carbon dioxide equivalent for a reporting period (usually one year). The calculation process generally follows a recognised standard such as the Greenhouse Gas Protocol. Once measurement is completed, initiatives are implemented to reduce emissions, and then the remaining emissions inventory is offset through the purchase of carbon credits. To be carbon neutral, this must be the equivalent to or greater than your total inventory.
While it’s important to work towards reducing emissions from large sources as much as possible, the total elimination of an organisation's emissions inventory is near impossible. Therefore, offsetting any residual carbon emissions is a mitigation strategy to reduce an organisation's overall impact. It is through the purchase and retirement of carbon credits that an organisation can become carbon neutral.
What is carbon offsetting?
Carbon offsetting is a process that compensates for the release of Greenhouse Gas (GHG) emissions by an organisation for a particular period. Carbon offsets are created from environmentally beneficial projects such as wind farms, forest regeneration, or energy efficiency. These projects work to reduce, remove or avoid greenhouse gas emissions in the atmosphere.
Carbon offset projects generate carbon credits by comparing emissions from the project against what would have happened if the project did not exist. Each carbon offset represents one tonne of carbon dioxide equivalent (t CO2-e) that has been avoided, reduced, or removed due to the project being undertaken. Under specific government and international programs, using approved quantification methodologies, for each tonne of CO2-e that is reduced, removed, or avoided, a carbon credit can be generated.
For an organisation to claim the benefit of a carbon credit it must purchase and retire the carbon credit. When one carbon credit is purchased and retired, one tonne of CO2-e from the organisation is being offset by the carbon credit. Therefore, by purchasing and retiring the number of carbon credits that equates to an organisation's emissions inventory (tonnes of CO2-e) for a certain period of time, the organisation is claiming reductions from the offset project(s).
Read our blog, do carbon offsets work, for a more detailed description of carbon offsetting.
Carbon Neutral Certification and how it is different from offsetting your carbon
A common misconception about Carbon Neutral Certification is that it only requires two steps, measurement and offsetting. However, Carbon Neutral Certification demands a series of steps that involve more than just measurement and the purchase of carbon credits.
With numerous free online calculators available and a lack of stringent requirements set in place by governing bodies, Carbon Neutral claims without certification are not perceived as valid or accurate. To ensure that organisations undergo the correct procedures and steps, standards have been set by various entities. These standards enable organisations to have audit-ready and certifiable emissions inventories that are recognised by international standards.
Carbon Neutral Certification demands that an organisation undergoes a methodical procedure to ensure that they credibly reach a state of achieving carbon neutrality.
What is the difference?
Carbon Neutral Certification requires a series of steps that need to be completed sufficiently in order to reflect credible actions. As Climate Active states, to be carbon neutral an organisation must measure its carbon footprint but also actively reduce emissions as much as feasibly possible before offsetting emissions. Carbon Neutral Certification must also reflect an organisation's carbon neutral status for a total reporting period (12 months).
An organisation can purchase carbon credits and offset segments of its emissions without needing to follow the requirements of a carbon neutral certification. Some organisations wish to be carbon neutral for less than a reporting period, for example, 3 months, or choose to offset the carbon emissions of a particular department within its operational scope. It is important to note however, that by doing so an organisation is not officially recognised for its actions, though it does contribute to a smaller footprint overall.
Claiming a carbon neutral status is something that benefits both the environment and the business. By being Carbon Neutral Certified, an organisation is showcasing its long-term commitment to sustainable action, which paints a clear picture for its stakeholders. Carbon Neutral Certification does require additional steps; however, this ensures that the organisation's claim is credible and that an organisation is serious about reducing its environmental impact. This reflects a positive image onto the organisation alongside additional benefits of a carbon neutral badge, a range of marketing assets, and a better understanding of climate related risks.
Want to learn more about Carbon Neutral Certification and how Pathzero can help you achieve it? View our certification page, or schedule a demo with one of our registered consultants.
