Why should businesses offset in a credit crunch?
The credit crunch has left many worrying that its shadow will not only land on the world's economies, but also on our commitments to tackle climate change. In such times, can there be a business case for carbon offsetting?
As each scientific report suggests that the consequences of climate change are both graver and nearer, it becomes clear that ever deeper cuts in emissions are necessary. Nearly all governments and companies have climate change plans that lag behind this latest science and even those leading the way are setting targets that see their atmospheric carbon emissions accumulating to dangerous levels. So how can companies facing economic meltdown justify maintaining plans to reduce carbon emissions, let alone expedite them?
Sir Nicholas Stern recently issued a warning against this flawed logic, restating his view that the longer term costs of not tackling climate change will be significantly greater. Yet with the current focus on cost cutting, sage opinion suggests that energy efficiency will be the only carbon reduction option surviving the 2009 budget planning process.
This approach doesn't bode well for the more expensive elements of the commonly quoted carbon hierarchy of "measure - reduce - renew - offset". Expensive technological reductions, sourcing renewable energy and carbon offsetting will surely be put on hold.
In this context, it is more important than ever that those companies that still have budgets for carbon reduction apply the hierarchy sensibly. The common belief that making internal emission reductions at any cost before you start offsetting at lower cost in particular, needs challenging. The climate needs us to reduce as many emissions as possible for every pound we have to spend, particularly when times are tough. Often that means offsetting should take precedence even if only for the short term.
This logic is not only true in the current economic climate. Research suggests that the majority (65%) of the most cost-effective opportunities to reduce CO2 emissions are in the developing world, where we also have a moral responsibility to support both mitigation and adaptation. High quality carbon offsets do both of these and it therefore always makes economic and ethical sense that they play some part in the climate change policy mix.
However, because offsets are ultimately an external expense with no direct returns, many treasurers in the current economic crisis will see offsets as a non-core spend to cut. So, other than the environmental and moral imperative, why shouldn't they?
Well to start with they can achieve the strategic objectives of two separate business areas from just one expenditure line; those addressing CSR and climate change. Whether that delivers an overall saving will depend on the budget available in those two areas but there are other business benefits to offsetting.
Firstly, they provide motivational stories with which to engage stakeholders in your efforts to tackle climate change. As an example, using project visits as a prize for the best performing teams can motivate employees in that most difficult of carbon reduction areas, behavioural change. Just keeping them up to date on projects provides positive reinforcement of the overall carbon strategy and research shows that working for a company with sound environmental and social values improves retention.
Both of these benefits save costs but offsets can also be used to increase revenues. They offer high quality content for marketing and PR campaigns, allowing companies to improve brand reputation amongst consumers who are still looking to buy from green brands. Even in the credit crunch, the market value of many companies still depends more on intangibles than assets, with brand and environmental reputation leading contributors. Carbon offsets offer a cost effective and easily communicated way to address a number of business goals.
So while we all come to terms with the aftermath of the credit crunch, let's not forget that the climate crunch hasn't gone away and now is not the time to stop doing all that is cost effective to tackle it.
Sustainable Travel International to work with ClimateCare
As a part of its carbon management program for the travel and tourism industry, Sustainable Travel International (STI) is now working with ClimateCare to provide Gold Standard carbon offsets to the travel and tourism industry for unavoidable greenhouse gas emissions.
STI, founded as a non-profit in the US, is an industry leader in promoting responsible travel and ecotourism, supporting sustainable development and helping travellers and travel providers to protect the cultures and environments they visit. STI now works globally with a number of key players in the travel industry encouraging them to develop, adopt and market sustainable tourism standards and practices, including triple bottom line eco-certification, carbon mitigation and offsetting of unavoidable emissions.
"We are extremely proud to be working with ClimateCare in offering their 'best in class' Gold Standard related carbon offsets", said Peter Krahenbuhl, STI Co-Founder and Vice President. "We have a lot of respect for the work ClimateCare does and we look forward to growing our relationship with them in considering additional credit types in the future."
Global green energy awards: Ashden Awards 2009 finalists selected
On 11th June 2009, local sustainable energy champions from the UK and around the world will compete for the Ashden Awards 2009 at a ceremony in London. The Ashden Awards for Sustainable Energy were founded in 2001 to encourage the greater use of local sustainable energy to address climate change and alleviate poverty. Since then they have rewarded nearly one hundred winners across the UK and the developing world. The awards work to show-case and celebrate best practice, encourage the expansion and replication of winners' work, raise awareness of the potential of local sustainable energy and advocate on their winners' behalf
UK finalists offering climate change solutions will take part, from Birmingham, Coventry, Devon, Herefordshire, Milton Keynes, Scotland, Surrey, and Yorkshire. International schemes will also be recognised for their work. The contenders will present their work to their peers and other experts at the Ashden Awards Imperial College Conference on 10th June.
ClimateCare has been a long term sponsor of the Ashden Awards and has helped many of the award winners to scale up the projects to achieve their full potential.
This year’s final six international nominees maintain previous standards bringing high quality, low carbon innovation with massive potential for growth and replication:
Ladakh, India
Image: A solar greenhouse in Ladakh, GERES India
Bihar, India
A new biomass gasification system generates electric power for eight hours per day, providing a popular alternative to an unreliable grid supply. Electricity is currently sold to ten businesses which previously used diesel generators. Most of the biomass is ‘dhaincha’, a local woody plant which grows in water-logged areas where crops cannot be grown.
USA / China
A cheap and efficient stove saves 40% fuelwood and reduces polluting emissions by 50-75% compared to traditional cooking. It is manufactured in a factory in China and used in programmes as widespread as South Africa, India, and Argentina. 60,000 stoves have been sold.
Nicaragua
2,000 solar home systems and 560 larger solar energy systems have been sold and installed in rural areas by a 25-year-old family-run business, for uses including light and communications for schools and police stations; vaccine and blood refrigeration for clinics; pumps for village water supplies; and power for mobile phone masts.
Ethiopia
Image: Tin roof solar panels in Ethiopia, Solar Energy Foundation
Uganda
A business started making briquettes from agricultural waste for its own use, but now sells over 100 tonnes per month to schools and other businesses, and has installed over 1,300 large, efficient stoves for cooking using briquettes. Briquettes replace fuelwood and charcoal, thus reducing deforestation and greenhouse gas emissions.
UK Nominations
Although none of the following are taken on as offset projects given their location, the UK-specific programme has uncovered wonderful examples of domestic carbon-saving action. This year’s eight UK finalists in four categories:
UK Business Awards finalists
Architects put environment at heart of building design
A firm delivering low-energy architecture in close consultation with their buildings' end users has beaten 2006 building regulations standards by at least a third on both energy and CO2.
Business booms for carbon-cutting pumps
A fast-growing company has installed nearly 800 heat pumps for heating and cooling buildings in just six years. By using renewable heat from the earth they are saving tens of thousands of tonnes of CO2 per year compared with gas boilers and conventional air conditioning.
UK Charity Award finalists
Galvanising communities to adopt low-carbon lifestyle
A local Energy Agency runs the gamut of inspirational and practical support to communities, reaching households, businesses and local groups through tailored programmes.
Low carbon show-homes demonstrate how to green older houses
A network of pioneering owners of hard-to-treat, low-carbon homes shows how to reduce carbon emissions by 60%, inspiring more than 36,000 visitors.
UK Local Authority Award finalists
Insulation scheme blanketing metropolitan borough
Ward by ward, a local authority is offering to provide and install free cavity-wall and loft insulation to every home that can use it. So far the scheme has created 140 jobs and installed insulation in more than 21,000 households.
Boosting local renewable energy businesses
A county council scheme stimulating rural regeneration has created 55 jobs and safeguarded 16 more by supporting both supply and demand for renewable energy. So far it has led to 109 renewable energy installations, with a capacity of over 2 MW in SMEs, community organisations, and homes.
UK Schools Award finalists
Antarctic expedition inspires carbon-saving headteacher
The head of a 270-pupil primary school has worked with the whole school community to change behaviour and achieve sustainable carbon savings, including an overall reduction in electricity use of 48%.
Scottish school embraces sustainable energy
A 900-pupil secondary school has taken big steps to reduce energy use over the past 10 years, from auditing and changing regular building maintenance and upgrades, to installing a wind turbine and solar thermal system. Pupils enjoy cross-curricular learning on sustainable energy and lead campaigns at school and in the community.
ClimateCare is one of the Times Online's top travel sites for 2009
ClimateCare has been chosen by Times Online as one of the top 100 travel sites for 2009. In our provision of emission reductions to offset the effects of eco-travellers’ trips, ClimateCare provides a way for travellers to be more green and as such has earned the listing under the Times Online’s Best Websites for Holiday Essentials.
The 100 best travel websites are selected by the travel team at Times Online each year, their aim being to pick exciting and innovative sites alongside long-standing key sites providing green initiatives.
The news from Times Online arrived in the same week that ClimateCare’s efficient cook-stoves project was announced as the winner of “Innovation of the Year” in the 2009 Energy Risk awards. Energy Risk, a publication providing news and views on the latest energy and power market developments, runs its annual awards to recognise and reward companies bringing something special to the marketplace. During the award ceremony, held on 19th May in Houston, U.S, J.P. Morgan was the only organisation to be presented with three awards.
"Innovation of the Year", being presented to the winning J.P. Morgan team in London next month, was previously awarded to Point Carbon, the independent news and analysis service “providing critical insights into energy and environmental markets”.
India’s electricity supply is powered largely by coal and so has a high level of CO2 emissions for each kWh delivered. The Orb Solar project reduces emissions through the use of solar hot water and solar electric installations, making full use of the most powerful source of renewable energy available. The project, which began with a focus on the southern states of Karnataka, Maharashtra and Kerala, now runs franchises across several states in India.
The project
Image: An Orb Solar franchise, Adeel Halim
Such is the widespread benefit of this project, it has been designed for validation and verification under the Gold Standard, sought by projects making a positive contribution to sustainable development as well as emission reductions. The introduction of Orb Solar equipment and installation has enabled local entrepreneurs to expand their businesses and introduce valuable new skills to their communities. Their work brings increased employment in the area and raises awareness of how practical renewable energy can be. This educational outcome creates a legacy of knowledge and local capacity that helps the local communities develop along a low carbon path.
Benefits beyond emissions
Social: Crucially, awareness is raised of renewable energy as a practical reality for individual householders and small business power generation. Additionally, families are subsequently less dependent on a grid supply which suffers from frequent outages.
Image: Building community skills, Adeel Halim
Environmental: The project reduces greenhouse gas emissions and acts as a model for widespread adoption of environmentally-friendly technologies.
See how little it can cost to offset your carbon emissions and make a really
important contribution to help to fund valuable projects like the Orb Solar story.
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