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The New Age (Old) Question: What does it mean to be “Carbon Neutral”?

by | Aug 28, 2019

If you are reading this, you may already have some curiosity about carbon neutrality.  Maybe some knowledge, experience.

However, you may also have in mind the common question that we at ClimeCo hear from our clients and prospective clients:  What does it mean when a company says they want to become (more) “carbon neutral”?

Well, fearless reader, we can offer you one of many internet-found, quick and succinct definitions with this one from the Cambridge Business English Dictionary:

Climate Neutral is an adjective under the subsets of environment and social responsibility and defined as:  If something such as an organization or activity is carbon neutral, it removes the same amount of carbon dioxide from the environment as it releases into the environment.  (© 2019 Cambridge University Press)

Still confused?  Feeling inquisitive?  Good!

I proffer that there is more to it.  There are many definitions, understandings and misunderstandings; however, there isn’t absolute guidance regarding how a company or individual can become carbon neutral.  The central tenet is a bit easier to carry and is becoming more standardized.  Being or becoming carbon neutral is not an all-or-nothing effort, nor should it be.  It also need not be a one-time-only effort, rather, there are steps and considerations to be made. 

Central to all of this is determining your carbon footprint (carbon emissions associated with your activities), as this is what must be offset.

Fortunately, amongst the many widely accepted discussions and guidance, we find the Greenhouse Gas Corporate Protocol (GHG Protocol) ( https://ghgprotocol.org/ ), whose crafters note is used by 9 out of 10 Fortune 500 companies.  From our experience, we have no reason to doubt that claim.  The GHG Protocol is far from new, so it’s no wonder it has global traction.  It is a wonderful answer to the question at hand, too.

Around the late 1990s and early 2000s, much time and effort were spent by a partnership between World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), along with non-governmental organizations (NGOs), industry, governments and many others focused on creating the GHG Protocol.

At 116 pages, the Corporate GHG Protocol is not short; however, it is an easy, educational, and thorough read.  Most important in any carbon-neutral plan is considering just what your direct and indirect emissions are and accounting for them.  For instance, do you generate emissions from your ongoing site operations, or do you purchase generated power from elsewhere (either with or without emissions)?  Do you transport products?  The list goes on; however, the GHG Protocol offers a solution by providing a 3-step list of GHG “Scoping” for consideration (known as “Scope 1”; “Scope 2”; and “Scope 3”).

Scope 1 emissions deal with direct emissions.  

In other words, traceable right down to your personal/corporate activities.  Burning wood in a fireplace.  Driving to work.  Producing a chemical product and/or using fossil-fueled equipment, such as boilers.  On-site power generation.  You get the idea.

Scope 2 emissions deal with indirect emissions fostered by electricity consumption.  

In general, such emissions are generated offsite, but precisely because you need electricity.  So, you then account for those greenhouse gas emissions in your tally.

Scope 3 emissions address the balance of indirect emissions.

This scope tends to be optional under the GHG Protocol.  Examples of such items include transport and purchased manufacturing materials that are used onsite.

Apply GHG Protocol

Applying these “Scopes” to assess emissions has become one of the more common bases for calculations in determining annual emissions and/or a baseline to be offset.  The limits of just how far to go thereafter result from a bespoke plan, as these are the emissions that would need to be offset to become carbon neutral (be it partially, or in full).  Please recognize one of the old truisms as a part of such planning; reduce emissions the best you can and then offset the rest.

Carbon neutral means 100% net emissions balanced for a defined period of time.  Those reductions; however, do not necessarily need to all be accomplished on site.  Some, if not all, of these emissions can be offset by purchasing carbon offsets and renewable energy credits (RECs).  Note that use of such credits represents an ongoing obligation.  Emission reduction projects, both on and offsite, are creating reductions necessary for such balancing.  Part of the strategy should be to assess where reductions might first be made internally (e.g., switching to LED light bulbs) and then combining with environmental credits to balance the remaining emissions associated with the facility and its power consumption.  

The Future of “Being” Carbon Neutral

2019 has seen the continued advent of companies, organizations, and even rock bands looking to become carbon neutral.  Many have published extensive press releases about how they will be carbon neutral by 2023, 2025, 2030, etc.  This is because shareholders, investors, lenders, senior managers and other stakeholders are focused on the need “to do something” about climate change.  Fans, consumers, environmentalists, etc. are pushing for it, so this effort has become a public social responsibility that companies need to promote to show that they are trying to do the right thing and to build brand loyalty. 

From assessments to analysis, planning to execution, project development to sales, and marketing and acquisitions, this is what keeps companies like ClimeCo nimble; constantly developing, assessing, and executing carbon neutral efforts.

What does “being carbon neutral” mean at a higher level?

It means that you are responding to climate change.  You are taking a stand in a socially, financially, and environmentally beneficial manner.  How often is there a triple win in something you do for yourself or your company?  Not very often!  So, what are you waiting for?

About the Author

Andy Kruger, Esq., is well-versed in both law and engineering.  He holds degrees in both fields and has more than 30 years of experience in environmental markets and policy.  He is passionate about Climate Change, Renewable Energy and helping individuals, organizations, and companies to be better stewards of our world.