HomeEDU-Carbon CreditsIntegrating Carbon Credits in Corporate Sustainability

Integrating Carbon Credits in Corporate Sustainability

As corporations are leading generators of carbon emissions globally, it is necessary to take urgent action to uplift corporate sustainability.

This is particularly pressing as multinational corporations are responsible for almost 20% of climate-changing carbon dioxide emissions around the world.

Fortunately, with attention to the climate crisis becoming more widespread, corporations are making active moves to find more sustainable alternatives to their operations.

Many companies are hiring professionals in sustainability, such as environmental specialists, to advise them on their environmental, social, and governance (ESG) plans to decrease their carbon footprint.

As a result, global investments in business sustainability have increased significantly in the last three years.

In propelling corporate sustainability, companies are searching for innovative ways to offset their carbon footprint. One of the most efficient and effective new ways to do this is by investing in carbon credits.

What are carbon credits?

Carbon credits are generated when 1 metric ton of carbon dioxide has been removed or prevented from entering the atmosphere. These carbon credits are commonly generated through renewable energy, energy efficiency, carbon and methane capture, and land use and reforestation projects.

Project developers then sell these carbon credits to financially sustain their carbon offset projects. Plenty of big companies like Disney and Microsoft purchase these carbon credits, allowing their money to go to funding projects that contribute to the reduction or removal of these greenhouse gasses (GHG).

How to use carbon credits for corporate sustainability

Although companies may continuously move towards sustainable and renewable practices, there may still be some processes that necessitate generating GHG emissions. This may involve causes like outsourcing transportation to companies that rely on fossil fuels or producing chemical reactions that are unavoidable in manipulating raw materials.

Purchasing carbon credits allows corporate leaders to offset carbon emissions with greater ease. This is because they eliminate the need for corporations to come up with carbon reduction initiatives themselves. Instead their money is going through projects that are better resourced and proven to be effective.

For instance, even as Netflix was on target to meet its goal to hit net-zero GHG emissions by 2022, its progress was hampered by the pandemic. Despite the sudden increase in emissions due to increased TV and film productions, investing in carbon projects helped Netflix avoid about 14,000 tons of carbon in 2021 — thus allowing them to continue their progress towards its target.

Other companies like Disney, Microsoft, and Unilever have also committed to investing in carbon offsets and projects to combat the emissions they can’t avoid.

How to choose the best carbon credit to buy

The voluntary carbon market has accelerated because of the Paris Agreement, which prompted governments and corporations to commit over $14 trillion towards climate change. With entities needing to commit to decarbonization actions to reach net-zero emissions, they must choose the best carbon credit to buy.

However, know that not all carbon credits are the same nor are they the best option for your company. In addition to price, you will have to consider factors like additionality, permanence, measurability, and scalability.

Additionality refers to reductions or removal directly produced by the carbon credit market.

Permanence is the capacity of different methods to make lasting changes with a lower risk level of the projects being undone.

Measurability is the accuracy of reported reductions — with no overestimation or underestimation of emissions, or a failure to account for indirect effects.

Lastly, scalability refers to the project’s suitability for scaling up. This may depend on their CO2 removal capacity, level of readiness deployment, and cost-effectiveness.

As corporations are largely responsible for global carbon emissions, it’s necessary to find multiple methods of achieving net-zero with their emissions, and incorporate these steps into their ESGs.

Carbon credits provide a suitable and effective way to do this, although companies must take into account the varying factors that make each offset unique. But with the biggest companies around the world already set the precedent, the carbon market is already making significant strides in reducing emissions worldwide

Most Popular
LATEST CARBON NEWS

Brazil’s Bill Will Allow Loggers to Earn $24M from Carbon Credits

Brazil’s Congress passed a bill that will make carbon credits available to private companies with forest concessions, serving a first step in regulating the...

Global Renewable Energy to Break Records in 2023, IEA Says

Global additions of renewable power capacity will increase by a third this year, says the International Energy Agency (IEA). In the IEA's 2023 Renewable Energy...

Equatic Reveals First-of-a-Kind Ocean CO2 Removal Tech, Inks Deal with Boeing

Ocean carbon removal startup Equatic launches breakthrough low-cost, gigaton-scale climate technology and signs a pre-purchase deal with Boeing. L.A.-based Equatic is an UCLA Samueli School...

Lithium-Ion Wars: US Battery Imports Soar by 66%, Setting New Record as Domestic Production Ramps Up

According to S&P Global, in the first quarter of 2023, US imports of lithium-ion batteries surged by nearly 66% from the previous year, reaching...
CARBON INVESTOR EDUCATION

What are the Effects of Methane Emissions and Why Should We Care?

What are the effects of methane emissions? That’s the multi-million dollar question in the world’s battle over global warming as methane was often overlooked...

Carbon Credits and the Future of Sustainable Business: Exploring Best Practices

The trading of carbon credits can help entities and the world meet their climate goals by cutting carbon emissions and practicing sustainable business. While...

Revolutionizing Textile Recycling with HTC

A Virginia-based startup, Circ, has developed a unique hydrothermal processing technology for recycling blended textiles, like polyester-cotton blends. With fast fashion's emissions and environmental...

Carbon Credits and the Sustainable Development Goals: Aligning Climate Action with Global Priorities

Carbon credits from climate actions represent a crucial part of a strategy to mitigate climate change while supporting the global priorities on advancing sustainable...