In 2020 the UK’s Climate Change Committee (CCC) published the Role of Business in Delivering the UK’s Net Zero ambition. This set out some principles for businesses when considering their emissions and included high-level advice on the use of voluntary carbon offsetting. The CCC is now planning a more in-depth piece of work on voluntary carbon offsets, culminating in a report to be published later in 2022. In February IEMA responded to the CCC’s initial call for evidence, drawing on information from IEMA practice surveys along with insights from professionals.
From IEMA practice surveys there are some notable trends and practice is broadly reflective of the IEMA GHG Management Hierarchy. Direct mitigation measures such as improvements to buildings and premises and active energy management, continue to be dominant (responses in 2021 indicate at 68% and 72% respectively). Measures based around engagement and team approaches have slightly decreased by around 12% and 6% since 2010, possibly reflecting technology improvements and impacts from increased home working. Substitution measures such as fuel-switching and on-site renewables are becoming significant (responses in 2021 are at 47% and 37.6% respectively). In comparison, the use of offsets remains low but is now growing, increasing from 11.3 to 22.4%.
Although a range of known quality concerns exist around offsets, a core risk for offset users relates to claims they may be associating (organisational claims made by an offset purchaser). In some cases, offsets might be poorly used to displace carbon reductions by businesses or even delay the transition of the business model. This has to be avoided. Transparent approaches have a key role here, for example separating out GHG accounts to ensure that progress on transition targets is clearly presented and is not conflated with carbon offsetting. Claims based on offsetting should similarly disclose assumptions and follow clear standards and principles.
Whilst risks associated with some claims are clear, there are also opportunities that can be overlooked. Offsets, or perhaps more appropriately carbon credits, present an opportunity where businesses might take action towards their historic emissions. In this context, the word offset may be challenged and support may be better described as a contribution (rather than the implied equivalence of an offset).
In this formative period of net-zero ambition and evolving standards, the use of offsets and compensation measures will continue to require care and needs to be underpinned by good practice principles. The use of offsets will continue to grow. IEMA members will have an important role, advising on risks and best practice approaches and shaping the delivery of credible net-zero pathways.
Posted on 15th March 2022
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