Tuesday, January 17, 2023
Already 813 of the 2,000 largest publicly-traded companies in the world by revenue have, according to
Following the SBTi’s standard, companies need to first reduce 90-95% of their value chain emissions and neutralize the residual emissions with carbon removals and only then make the net zero claim.
Thus the mitigation hierarchy is very clear. Prioritize deep decarbonization for all emission scopes and only when that has been done, can remaining emissions be counterbalanced with carbon removals.
We shouldn’t wait until 2050 to take responsibility for our emissions, as we already possess the means to do it today.
Compensate firmly believes that focusing solely on emission reductions for the next few decades is not enough at this stage of the climate crisis. If we are allowed to add more CO₂ into the atmosphere, the least we should do is take responsibility for those emissions. There is already too much CO₂ in the atmosphere. ‘Safe’ CO₂ levels were surpassed in 1987 and humanity has since accumulated a carbon debt of 2500 gigatons. We shouldn’t wait until 2050 to take responsibility for our emissions, as we already possess the means to do it today. The SBTi net-zero standard also states that “beyond value chain mitigation” is an essential part of a company’s pathway to net zero. In practice, this can translate into purchasing carbon credits on the voluntary market.
Align your offsetting strategy with the Oxford Principles
For companies committed to reaching net zero, it makes sense to start preparing for the eventual neutralizing of their residual emissions, by already offsetting unavoidable emissions today. The best way to do this is by aligning your offsetting strategy with
shift offsetting towards carbon removal, where offsets directly remove carbon from the atmosphere;
shift offsetting towards long-lived storage, which removes carbon from the atmosphere permanently or almost permanently; and
support for the development of a market for net zero aligned offsets.
The key is to not substitute necessary emissions reductions with offsetting. Emission reductions need to be locked into a pathway that is aligned with climate science and the 1.5-degree goal. Offsetting is always supplementary to these measures, not a substitute for them.
Carbon removal projects absorb additional CO₂ back from the atmosphere. These include nature-based projects where carbon is sequestered and stored in biomass like trees, seagrasses, or soil. There are also engineered methods to remove carbon such as direct air capture and storage.
Even if removal credits are preferred, companies have to rely on what the voluntary carbon market has to offer at the present. Avoided emissions projects with short-lived storage make up the vast majority of carbon credits available on the current market. Removals are less than ten percent of the market today. Companies must operate in this reality.
However, Compensate fully agrees with the Oxford Principles and strongly recommends companies develop their compensation approach accordingly.
By committing to the Oxford principles, companies will send a clear message to the voluntary carbon market. Removals are what companies want and the climate needs.
Compensate’s own portfolio of carbon projects follows the Oxford Principles and typically has only 1 or 2 avoided emissions projects combined with 8-10 removal projects. Increasing the share of both avoided emissions and removal projects with long-lived storage is also a priority in developing Compensate’s dynamic portfolio of carbon projects.
By committing to the Oxford principles, companies will send a clear message to the voluntary carbon market. Removals are what companies want and the climate needs. This signal will in turn lead to an increasing supply of removal credits that will eventually help companies neutralize residual emissions at the point when they reach their net zero target year.