Carbon offsetting: What is it and why should small businesses care?

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Carbon offsetting: What is it and why should small businesses care?
Just like with any B2B process, some carbon offsetting schemes are better than others.
Photo by Noah Buscher on Unsplash

Carbon emissions have become a dirty phrase in today’s increasingly eco-conscious world.

Consumers are more informed than ever before and focused on finding ways to reduce their environmental footprint. This ‘go-green’ mindset has also encouraged many small businesses to start looking for ways to reduce their environmental impact. But knowing how and where to start this green journey can be challenging, and finding sustainable alternatives is not always easy. In fact, for some small businesses, it might be impossible to find a green solution to replace certain practices that are essential for their operations. 

But that’s where carbon offsetting comes in! 

What is it? 

Carbon offsetting is taking responsibility for your carbon emissions by reducing them somewhere else. For example, planting a tree for every 10 items  sold and soaking up carbon dioxide directly from the air, or perhaps investing in climate action projects through purchasing carbon credits. 

Purchasing carbon credits is one way businesses can account for those unavoidable carbon emissions and begin their journey to becoming carbon  neutral. If you’re not familiar,  a business that is carbon neutral is defined as one that balances its total release of carbon emissions with carbon offsets— making its net release of carbon dioxide into the atmosphere zero.

Sendle for example is Australia’s first 100% carbon neutral delivery service. For every parcel shipped, we offset the carbon emissions by investing in positive environmental causes. Since launching in 2014, we’ve offset 21 billion kilometres of carbon by supporting forest protection and regeneration projects around the world with our partner, South Pole

How does it work?

First up, small businesses should calculate their carbon footprint. Online calculators are a great place to start and it's also important to remember that every business will be different. 

The price of carbon credits varies based on factors such as project location and type, as well as the social co-benefits also generated alongside the carbon reduction. 

To find the dollar amount at Sendle, we calculate the potential CO2 generated by all parcels sent the previous year, and then invest it via South Pole, so that all of our deliveries are 100% carbon neutral. 

South Pole works with businesses to achieve a low-carbon reality and has seen rapid growth in voluntary carbon offsetting globally and here in Australia too. 

How to choose a carbon offsetting project

There are nearly 800 different carbon offsetting projects across Australia that small businesses can invest in and support through carbon credits. Remember the atmosphere has no borders so you can support projects globally to have a broader impact. To generate carbon credits, project developers must adhere to strict guidelines and scientific methods that govern how a specific project will reduce emissions. 

The Australian Government’s Climate Active program provides a list of offset units (or carbon credits) eligible for making carbon neutral claims. These offset credits have met the integrity criteria to prove that  genuine carbon reductions have occurred.

When purchasing credits to go carbon neutral and / or meet certification requirements, organisations should seek an experienced carbon credit provider to help them with their offsetting. South Pole is one organisation that helps businesses calculate their carbon footprint and purchase offsets. Their portfolio of over 700 climate action projects are all third-party certified and each has a documented track record of their impact.

Businesses can also partner with organisations to work on other elements of their climate strategy, such as emission reduction activities, target setting and reporting. You can view a list of organisations in the Australian Carbon Market Directory here.

Do it properly

If small businesses want to explore carbon offsetting and eventually claim carbon neutrality — and do so with a clean conscience — there’s a few things they must check off first. 

When it comes to emission reduction, carbon offsetting should not be the centre stage of your sustainability plan. It’s certainly a buzzy and innovative way to go green (way more than waste management), but think of carbon offsetting as the encore or one tool in your toolkit. 

Start by slimming down your carbon footprint with as many ‘reduce, reuse and recycle’ practices as possible.  Once your carbon reduction strategy is achieved, carbon offsetting can be used for the residual carbon emissions.  It’s the final step for businesses aiming for carbon neutrality. 

Just like with any B2B process, some carbon offsetting schemes are better than others. Increased focus on the integrity of carbon offsetting rightfully means greater pressure on business owners to ensure their investment is credible and beneficial. 

James Chin Moody is Sendle CEO and co-founder. 

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