As climate change becomes an increasingly tangible concern, reducing carbon emissions (or achieving net zero emissions) is quickly becoming a priority. In this series piece we unpack the realities of carbon offsetting - the good, the bad, and the ugly - to show how it can (and can’t) be part of an impactful sustainability strategy for your company.
Last week we explored the shady side of the carbon market. Read on for how to avoid investing in bogus or low-quality offsetting schemes.
The carbon market is huge, chaotic, and a lot like the Wild West. Without third party verification or standard metrics, the offsetting industry is vulnerable to mismanagement. How to avoid this? By buying certified carbon credits, aka CERs. The most successful projects are certified with the CDM, or even further, the Gold Standard.
A quick refresher: the CDM is the carbon offsetting scheme run by the UN. The CDM allows countries to pay for emissions-reducing projects elsewhere, in developing countries, then claim those emissions savings (in the form of carbon credits) as part of their own effort to meet global Kyoto goals. The CDM aims to facilitate the growth of developing nations in a sustainable way, thus setting them - and the entire planet - up for a greener future.
In order to qualify as a CDM-backed project, offsetting schemes must fulfil a suite of criteria. However, there has been criticism that the criteria are insufficiently stringent. According to this study by the European Commission, only 2% of UN certified emissions reductions had a high likelihood of actually reducing carbon emissions - a rather bleak statistic. This is where the Gold Standard comes in.
The Gold Standard is an independent benchmark founded in 2003, supported by the WWF and dozens of environmental and development NGOs. It has positioned itself as a standard-setter, in response to the CDM being insufficiently robust or ambitious. To gain Gold Standard verification, offsetting projects must meet CDM criteria, as well as comply with additional Gold Standard criteria which are designed to ensure that qualifying projects yield genuine and measurable environmental benefits, while successfully delivering sustainable development to communities. Carbon credits generated by Gold Standard schemes are regarded to be of the highest calibre. Gold standard certification can be awarded to projects on both the voluntary and compliance market:
“The Gold Standard certification is there to highlight the best of the compliance market and to legitimize real efforts in the voluntary market.” (Goldstandard.org)
To be eligible for Gold Standard certification, projects must adhere to three main principles: (1) They must involve paradigm shifting energy technologies, (2) they must feature inherent additionality and sustainability attributes, and (3) they must have widespread support from environmental NGOs. Gold Standard screening aims to prevent CERs from being awarded to business-as-usual schemes. In addition, Gold Standard certification puts an emphasis on the health of local communities, by including safeguarding principles which aim to prevent social or environmental exploitation from occurring as a result of offsetting schemes.
The Gold Standard is not the only independent standard on the market, but it has the most widespread backing from a wide variety of NGOs. However, the question remains: is the Gold Standard good enough?
About the author:
Helena Maratheftis writes regular content for Converge. She is a creative with an academic background in biology (BA) and the environmental sciences (MSc). Her special interest lies in science communication.
Converge, an AI-based construction technology company, has raised over GBP 15 million to digitise, optimise, and decarbonise construction materials and processes responsible for 11% of global CO2 emissions. The round was led by mission-aligned investor OGCI Climate Investments (OGCI CI), a specialist decarbonization investor, with the participation of TO Ventures, and existing investors.
In this final chapter of our series, let’s take a look at how Converge fits into the sustainability picture, helping your company to move beyond offsetting and towards a greener future.