Carbon Offsets for Corporations

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What is Carbon Offsetting?

Carbon offsetting is the process of compensating for carbon emissions that are created by industrial and human activity by participating in or funding projects designed to make equivalent reductions in carbon emissions in the atmosphere. With the push for corporates to reduce carbon emissions throughout their value chain, carbon offsetting has a role to play in reducing global carbon emissions.

Carbon Credits

Sustainable projects earn "carbon credits," which are tradeable certificates that compensate for emitting one tonne of carbon. These are earned by projects that have avoided releasing or helped to take carbon out of the atmosphere. Companies can calculate their carbon emissions for reporting periods and purchase the equivalent amount of carbon credits from certifiable organizations. This helps the organization developing projects gain funding and carry out further emissions reductions.

SBTi and Carbon Neutral Standards

Historically, organizations have used carbon offsetting to compensate for vast amounts of carbon emissions released into the atmosphere as a result of business operations. With the introduction of the SBTi, corporations will be required to minimise their carbon emissions, to be in line with net-zero by 2050, and use carbon offsetting only to offset their residual emissions. However, to ensure that the carbon offsetting projects you are investing in are aligned to the SBTi, they must be certified. Corporates choosing to adopt a carbon-neutral standard are able to rely on carbon offset credits as part of their approach to carbon reduction. NUS generally advises organisations to adopt carbon
offsetting as a measure of last resort, following the utilisation of all technically and economically-feasible decarbonization opportunities.

Certifying Carbon Offset Projects

Given the nature of the carbon offsetting industry, it is important to have standards in place that ensure the legitimacy and efficacy of projects. These standards exist to monitor, report, and account for the work done by carbon offsetting projects to ensure that effective mitigation is taking place. Many global standards exist; however, the two that stand out are the Gold Standard and the Verified Carbon Standard (VCS, commonly referred to as Verra). These two conduct the most rigorous and robust audits for carbon offsetting projects and are the key players currently within the carbon offsetting market. The Gold Standard was developed under the leadership of the WWF. It is generally accepted as the standard with the most stringent criteria. As a result, many buyers turn to Gold Standard as the only full-fledged standard endorsed by leading environmental NGOs.

Types of Carbon Offsetting Projects

Corporates are able to select carbon offsetting projects from a range of areas, from traditional tree-planting projects to supporting the deployment of renewable technologies.

Afforestation - One of the most common and popular methods of carbon offsetting is afforestation. This involves planting trees on a large scale in areas where there are no trees already present.

Land-Use and Nature-Based Solutions - These projects range from afforestation schemes to projects that teach local farmers and landowners to adopt more effective farming techniques.

Renewable Energy - Renewable energy projects support the creation and maintenance of green energy facilities such as wind farms in developing countries. The introduction of renewable energy is meant to reduce fossil fuel use for energy, thereby avoiding carbon emissions.

Waste Management - These projects help major waste management installations such as landfills, wastewater treatment plants, and manure management processes yield sources of energy generation from what could otherwise pollute local environments.

Water Benefits - Water management projects provide clean water to communities around the world. This avoids carbon emissions as these communities would ordinarily boil water to clean it.

Community-Based Energy Efficiency - These projects seek to improve energy production within rural communities by providing them with cleaner fuel and the apparatuses needed to turn the cleaner fuel into energy, thereby reducing carbon emissions into the atmosphere. For example, organizations may provide households in rural Kenya with individual biogas digesters so that they are not reliant on fossil fuels or wood, which would also aid in preserving local forests.

Supporting CSR and ESG Goals

These projects go beyond simply offsetting carbon and provide significant social and economic benefits for the local communities in which they are based, such as providing employment and access to new technologies. All projects under the Gold Standard and Verra are conducted in developing countries to ensure that the project also provides a social benefit. This can support the wider CSR/ESG goals that organizations may have.

How NUS can Support Your Carbon Offsetting Requirements

NUS helps corporations through the entire offsetting process. Our dedicated sustainability team conducts a thorough carbon footprinting procedure, calculates emissions to be offset, and ensures a seamless purchase of certified carbon credits.


Zeba Zaidi

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