First published on Triple Pundit
At ClimateCare we help businesses manage their impacts on people and the environment. For many, climate change and their carbon footprint remains the most material environmental risk. Reducing carbon emissions and offsetting what remains is the only way to take full responsibility for your carbon impacts, but how can you make a strong business case for action and demonstrate a business return from this activity?
- Set an internal price for carbon
Putting an internal price on carbon is a growing trend amongst businesses and is a useful tool in recognising the financial risk posed to a business by climate change. The number of organisations with a price on carbon has tripled in the last year with many more planning to implement this in the next 2 years[i].
Companies implementing internal carbon pricing find it brings financial process and rigour to CSR decision making, bringing it in line with the process in other business areas. This encourages the business to consider the cost, speed and scale of different CSR activities, rather than allocating spend based on more subjective measures. And with the cost of carbon on the balance sheet, the CSR department has more opportunity to demonstrate a strong business case for action and establishes a benchmark against which to report ROI.
The median carbon price set by organisations reporting to the CDP in 2015 was $18/tonne. This is many times the price of carbon credits from even the most expensive Gold Standard projects, making offsetting carbon emissions a very cost effective strategy to fund immediate carbon reductions.
- Capture the social and environmental impact
But that’s not the end of the story. Not only is offsetting cost effective as a carbon reduction mechanism, but it delivers significant value beyond that, for the environment, society at large and the business concerned.
- Select projects to drive specific outcomes and report this impact against your broader CSR strategy
The type of project you choose to support can help you drive specific outcomes.
For example, choosing to offset through a Gold Standard efficient cookstove project can generate as much as $55 of health impacts, $93 livelihood impacts and $3 of employment outcomes for every tonne offset, while a tonne of carbon offset through a Gold Standard safe water project can deliver $117 of health impacts[iii]
- Select projects that resonate with your business
Choose to support projects in your supply chain, the markets where you operate, or that link to your products or services in some way. Work with your communications teams to maximise opportunity to communicate this to staff, customers and broader stakeholders – maximising the positive sentiment generated from the activity.
- Capture the value to your business
On top of value to the climate, environment and society at large, businesses who offset their emissions are also able to measure direct business benefits. Our own experience at ClimateCare is that clients are able to record measurable increases in staff engagement, higher brand reputation scores and increased sales for example.
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[i] Ecosystems Marketplace: Buying in: Taking stock of the role of offsets in corporate carbon strategies
[iii] Gold Standard Foundation: The Real Value of Robust Climate Action