Let’s talk about Carbon Offsetting…

❓ What you’ll learn

• How carbon offsetting works and the benefits for your business.

• What effective carbon offsetting programmes look like.

• The problems and potential risks of carbon offsetting for your business.

• Ten Carbon offsetting solutions in the marketplace.

• Nine Carbon offsetting case studies by businesses globally.

• Six Predictions for the carbon offsetting market.

• Eleven Frequently Asked Questions on carbon offsetting.

💎 Why it matters

Changing existing operational structures to reduce your business's carbon footprint can take years due to operational and financial feasibility. 

🔍 Problem

On average, an SME emits 67 tonnes of CO2 per annum (75 tonnes of GHG). Due to the volume of SMEs globally, SMEs are responsible for 55-65% of total CO2 emissions by businesses in Europe alone.

🔭 Perspective

1 Tonne of CO2 is equivalent to 1 gasoline-powered car driving for half a year.

💡 Solution

Neutralize your carbon emissions in the short term by investing in projects that reduce or remove an equivalent amount of carbon dioxide from the atmosphere. A process known as carbon offsetting. Each carbon credit equals one ton of carbon emissions abated by the purchaser.

⛔ Risk

Offsets may simply give companies a license to maintain business-as-usual emissions, undermining the overall goal of global emissions reduction. You don’t want to be seen to purchase carbon credits to distract or delay other more important internal decarbonisation strategies. No matter how many carbon credits are purchased, they will not offset the impact of burning fossil fuels by businesses. 

📈 ROI

The carbon offsetting market is set to reach $100bn by 2030. Carbon offsetting will be cheaper in the short term than creating your own operational carbon reduction initiatives. Driving your own internal, long-term sustainability initiatives will drive a larger ROI in the medium and long term.

🏁 Players

🚩 Heroes launching solutions

• Bionua sells biodiversity credits to businesses in Ireland, for Ireland, by William.

• DGB Group offers carbon, biodiversity, and plastic credits at scale by Selwyn.

• Sylvera ensures you’re making the most effective carbon-offsetting investments by Allister.

• Isometric assesses the legitimacy of carbon credit projects so you don’t have to by Eamon.

• Supercritical is a carbon removal marketplace aimed at tech companies by Michelle and Aaron.

• Ecologi provides Carbon-Offsetting-As-A-Service by Ian and Elliot.

• Climeworks captures your company's carbon emissions and stores it by Cristoph and Jan.

• TAO Climate enables you to offset your aviation business travel and more by Gary.

• Sweep helps businesses track their carbon emissions and act on the data by Rachel, Raphael, and Yannick.

• Carbon Cloud enables businesses to calculate their carbon emissions with a focus on food production by David.

🚩 Fighters launching initiatives

• PlanetPlay is a climate-conscious gaming company with more than 2.2 million dollars raised for certified climate projects and aspirations to offset 100,000 tonnes of carbon emissions with DGB Group.

• Tentree is growing a forest of sustainable fashion with 10 trees planted for every purchase.

• Recruiters.ie plant two trees for every vacancy they fill in countries that provide women with jobs in tree nurseries with TreeNation.

• Coffee Angel commits 5% of profits to buy biodiversity credits in Irish forest restoration with IrishTrees.ie.

• Dublin City Council is working with Vita to offset their business travel emissions. 

• Flogas is offsetting emissions on behalf of their customers in Ireland.

• Hometree works with many Irish businesses but is against carbon offsetting.

• Zurich has a Carbon Neutral Fund which is used to offset the carbon emissions from their other funds.

• Accurx offsets the emissions from their communications platform with Supercritical.

🔮 Predictions

1. More SMEs will get involved in Carbon Offsetting as they get to grips with their environmental sustainability strategies. For SMEs, many don’t know where to begin on their journey. Carbon offsetting will buy them some time

2. The price of carbon credits will rise substantially - https://www.perillon.com/blog/12-companies-that-are-buying-carbon-offsets

3. Regulators will clamp down on the carbon offsetting market in order to encourage companies to reduce internal operational and supply chain emissions directly

4. Carbon offsetting will be a high-risk strategy as the industry becomes more “murky” and seen as a form of “greenwashing” by consumers of all ages - but particularly Gen Z consumers. 

5. How and when you advertise your carbon offsetting initiatives will be heavily scrutinised by government communications bodies in line with further green-washing regulations.

6. Buying and selling carbon credit certificates, in addition to using carbon certificates to hedge, will grow in popularity on the stock exchange. 

💰 Recent Rounds

In 2023, carbon offset startups raised a total of $594 million (2022: $1.2b). Some more recent rounds include:

• Varaha secured $8.7 million in Series A funding in Q1 2024.

• Sylvera closed $57 million Series B funding in H2 2023.

• Isometric raised $25 million in seed round funding in H2 2023.

• Plan A raised $27 million in Series A funding in H2 2023.

• Supercritical raised $13 million in Series A funding in H2 2023.

✨ Frequently Asked Questions (and Answers) on Carbon Offsetting

What is carbon offsetting? Carbon offsetting is a process of compensating for carbon dioxide emissions by investing in projects that reduce or remove greenhouse gases from the atmosphere, thereby balancing out the emissions produced elsewhere.

How to offset carbon footprint? Carbon footprints can be offset by investing in various projects such as renewable energy initiatives, reforestation projects, methane capture programs, and energy efficiency projects, which help reduce or remove carbon emissions.

Does carbon offsetting work? Yes, carbon offsetting can effectively help mitigate the environmental impact of carbon emissions by funding projects that reduce greenhouse gas emissions or remove them from the atmosphere.

Is carbon offsetting greenwashing? Carbon offsetting can become greenwashing if it's used as a sole strategy without genuine efforts to reduce emissions internally. However, when used as part of a comprehensive sustainability strategy, it can be an effective tool.

What are the best carbon offset programs? The best carbon offset programs vary depending on factors such as project types, certifications, transparency, and additionality. Some reputable programs include Verified Carbon Standard (VCS), Gold Standard, and Climate Action Reserve.

Are carbon offsets effective? When properly implemented and verified, carbon offsets can be effective in reducing overall carbon emissions and contributing to climate change mitigation efforts.

Are carbon offsets legit? Legitimacy depends on the transparency and rigor of the offsetting program. Verified offsets from reputable standards ensure that emissions reductions are real, measurable, permanent, additional, and independently verified.

Are carbon offsets tax deductible? In some countries, carbon offset purchases may be tax-deductible as part of business expenses related to environmental stewardship. However, it's advisable to consult with tax professionals for specific regulations in your jurisdiction.

Does planting trees offset carbon? Yes, planting trees can offset carbon as they absorb carbon dioxide during photosynthesis. However, the effectiveness varies depending on factors such as tree species, location, and management practices.

How are carbon offsets calculated? Carbon offsets are calculated based on the amount of greenhouse gases reduced or removed by a project, typically measured in metric tons of carbon dioxide equivalent (CO2e).

How big is the carbon offset market? The carbon offset market has grown significantly in recent years and is valued in the billions of dollars annually. The exact market size varies depending on factors such as demand, regulatory environment, and project types.