Carbon credits play a crucial role in the fight against climate change by enabling companies and individuals to contribute to carbon removal and avoidance projects. Knowing how to select and promote reliable climate contribution projects is necessary to maximise their positive impact. For a detailed overview of climate contributions, visit this page.
To better understand the importance and impact of climate contributions, it is also essential to know how to communicate effectively about your initiatives. Before providing guidelines on how to communicate the climate contribution effectively, it is necessary to use the right terminology to avoid problems of greenwashing. To do this, visit our article on the carbon glossary.
1. Understanding carbon neutrality
The concept of carbon neutrality is commonly used in corporate communications, but often incorrectly. As per the IPCC's definition, carbon neutrality is scientifically valid when it corresponds to a global equilibrium between anthropic emissions and anthropic absorption. As a result, an organization, a product, or a service cannot be carbon neutral, but it can contribute to global carbon neutrality.
According to the IPCC, the objective of carbon neutrality is twofold: (1) reducing the total amount of GHG emissions at the global level and (2) increasing our planet's absorption capacity.
Then, these two climate actions lead to an increase of avoided and absorbed emissions:
- Avoided emissions are emissions that did not occur in reality. They arise either when an organization changes some processes in its value chain or when it contributes to projects, allowing future emissions to be avoided.
- Absorbed emissions arise when our planet's GHG absorption capacity increases (e.g., with carbon sink projects)1.
Find out more about the differences between carbon neutrality and Net Zero.
2. Emission reduction and climate contributions
To support the twofold objective of global carbon neutrality, the IPCC states that it is important for an organization to reduce its emissions in the value chain and contribute to projects that avoid or absorb emissions (climate contribution).
Climate contribution refers to the voluntary financial contribution to carbon avoidance and removal projects by purchasing carbon credits. As the IPCC stresses the importance of both reducing the total amount of GHG emissions and increasing the global GHG absorption capacity, climate contribution should be complementary to an ambitious corporate emissions reduction strategy. It should not be a strategy in and of itself.
Climate contribution could be confused with carbon offsetting, although there is a significant difference between these two terms.
The term carbon offsetting often has a negative connotation that may suggest that an organization can compensate for the part of emissions that it did not manage to reduce. This may imply that the final goal is to balance the emissions generated by an organization and those compensated through the support of carbon removal and avoidance projects.
Carbon offsetting could suggest that an organization could cancel out its activities' GHG emissions by purchasing carbon credits, even without making significant reduction efforts within its value chain.
In contrast, the term climate contribution is more in line with the IPCC's twofold objective of global carbon neutrality because it does not refer to emission compensation but rather to the voluntary contribution to carbon removal and avoidance projects aiming to support the goal of global carbon neutrality.
The more an organization reduces its emissions and contributes to carbon removal and avoidance projects, the more it supports the achievement of carbon neutrality. Climate contribution is part of a global movement and not an individual achievement. At ClimateSeed, we promote moving away from "carbon offsetting" and towards "climate contribution."
While climate contribution signals a genuine commitment to supporting IPCC's objective when combined with a clear reduction strategy, carbon offsetting is often at risk of being associated with greenwashing. As a result, organizations must be very cautious regarding their climate contribution strategy and how they communicate about it.
Interested in a deeper dive into the reasoning behind why we have transitioned terminology? Check out our webinar: From Carbon Offsetting to Climate Contribution.
The following section lists our key guidelines for effectively communicating climate contribution.
3. 3 steps to effective communication on climate contributions
Step 1: Disclose your GHG Emissions Assessment
A GHG emissions assessment (or inventory) lists an organization's emission sources and their associated quantity of GHG emissions. Why is it important to disclose it?
- To be transparent: Making this report public ensures your organization is transparent concerning its GHG emitting activities, signals your commitment to sustainability to your stakeholders, and encourages other companies to do the same.
- To quantify your reduction strategy: To elaborate a robust decarbonization plan, it is necessary to rigorously and quantitatively assess your current GHG emissions (ideally all direct and indirect GHG emissions - Scope 1, 2, and 3 if you follow the GHG Protocol). Your reduction goals should be set in line with the Paris Agreement after carefully analyzing this assessment's results.
- To determine your level of climate contribution: Before contributing to carbon removal or avoidance projects, it is necessary to quantify your GHG emissions and reduction strategy. Only after analyzing these results and setting up the emission reduction strategy, actions, timeline, and budget should your organization determine the number of carbon credits it wishes to purchase.
After publicly disclosing your GHG emissions assessment, your corporate communication should be focused on the complementarity between your climate contribution and your emission reduction efforts.
Step 2: Complement your climate contribution with a solid emissions reduction strategy
Your strategy has to be twofold. It should combine emission reduction within your organization's value chain while supporting carbon removal and avoidance projects. This complementarity contributes to achieving carbon neutrality on a global scale. Financially contributing to these projects is thus a necessary (although not the last) step in your decarbonization strategy.
To make your communication more transparent and convincing, you should:
- Use Science-based Targets: Your emissions reduction goals can be defined according to the Science-Based Target initiative recommendations and should be disclosed along with clear timeline commitments.
- Adapt your strategy to your sector: Ensure you consider your industry's existing abatement opportunities or your research and development investments to develop a more reliable reduction strategy in line with climate science.
- Separate your results by scope or category: Scopes 1, 2, and 3 should be distinguishable, and sub-goals for each scope should be defined (i.e., in case you follow the GHG Protocol).
- Demonstrate you seek continuous improvement: Assess your results, achievements, and failures to define your next steps. The latter should always be very carefully determined with quantified milestones (e.g., year-over-year goals).
After highlighting your GHG assessment and decarbonization strategy, your communication should list and detail your climate contribution.
Step 3: Hold your organization accountable when communicating about climate contribution
The last thing your organization needs is to communicate on a climate contribution only to find out later that said the project had little to no beneficial impact on our planet. To prevent this issue, it is necessary to communicate on carefully selected projects with a verified beneficial environmental impact. How can your organization do this?
Find out how to select climate contribution projects.
- Favor certified projects: International and national certifications ensure that projects have a verified positive impact on the environment and guarantee the quality of the purchased carbon credits. Furthermore, projects with co-benefits for local communities should be preferred as their positive impact on sustainability is more significant. Co-benefits can be as important as the environmental impact itself. To select projects with important co-benefits, opt for an SDG-based approach as it shows which SDGs are targeted by a specific project.
- Assess each project carrier's background: To identify the final beneficial owners behind each project and prevent illegal practices (e.g., money laundering, terrorist financing...).
- Fair and transparent pricing: To ensure carbon credits purchase supports projects maintenance, development, and local communities.
- Avoid the secondary market: Carbon Credits should be used to contribute to carbon removal and avoidance projects. Indeed, they should be bought and retired from the market to finalize the contribution process. In addition, they should not be resold to avoid speculation.
Communicating about climate contribution requires accuracy, precision, and honesty. The more we reduce our emissions and contribute to carbon removal and avoidance projects, the bigger impact we can have against climate change. To increase the legitimacy and credibility of your climate action, you should:
- Explain the choice of using climate contribution in complement of a comprehensive decarbonization strategy: i.e., one that combines both a reduction strategy in line with the Paris Agreement and a contribution to carbon avoidance and removal projects.
- Disclose information about any intermediaries (such as ClimateSeed) and the projects your organization contributed to: You should provide a detailed description of the project(s), mention their certification standard (e.g., VCS, Gold Standards, Plan Vivo…), highlight their environmental and social impacts, and mention the SDGs they target without listing them. The impacts (i.e., SDG and co-benefits) should be described in detail with quantitative and qualitative KPIs. The lack of transparency in the voluntary carbon market is also due to inaccurate communication. As a result, communicating about the projects demonstrates a more genuine commitment, prevents greenwashing criticisms, and is proof of a better understanding of the project.
- Define the relevant perimeter for your climate contribution (i.e. if it goes beyond your direct and indirect emissions): the contribution can correspond to the emissions of a certain scope, a product, or an event. Saying that an organization has a neutral impact is misleading and should be replaced with quantifiable information about avoided or sequestrated tCO2e. The norm ISO 14021, which focuses on self-declared environmental claims, requires statements to be quantified to avoid confusion about the impact. The Net Zero Initiative (NZI) also provides guidelines to disclose your decarbonization process and climate contribution.
- Define long-term goals and your next steps: Prepare a detailed timeline to improve your current strategy.
Finally, it would be best if you always kept in mind that global carbon neutrality is a goal that can only be achieved through global collaboration. Therefore, comparing your organization to others should not be used as an argument.
ClimateSeed can accompany the assessment of your GHG emissions, decarbonization strategy, climate contribution, reporting, and communication with stakeholders. Contact us to have more information.
Sources:
(1): IPCC Report: https://www.ipcc.ch/reports/
