What’s the Deal with Carbon Offsetting?

There’s a strong sustainability
bent to the travel policy at one U.K.-based industrial equipment manufacturer. The
travel manager has negotiated carbon offsetting into its preferred agreements
with Scandinavian Airlines and Lufthansa. But, “as a company, we are not
doing carbon offsetting; we have to make sure we can lower our carbon emissions
and footprint by changing our behavior,” said the buyer, referring to the practice
of measuring the carbon emissions produced by business travel and then contributing
to an environmental or social program (they are often integrated) that works to
‘compensate’ for the amount of carbon released into the environment.  

The company’s approach—to treat
carbon offsets as an accessory to a strategic carbon reduction program, rather
than as the main component—aligns with a growing understanding of how carbon
offsetting needs to function in the full scope of emissions reduction efforts. Corporations
committed to such efforts need to tidy up their business travel behaviors first
and reduce emissions at the source, according to sustainability consultant
Bernard Harrop. Only then should they look to offset the so-called ‘residual’
carbon still left. That could mean a committed effort to travel reductions, a
committed transition to train travel for short-haul routes, a committed
investment in sustainable aviation fuel with airline partners or other alliance
groups working on that innovation.

Yet the reality is that even with
these provisions, few travel programs will neutralize the carbon emissions
associated with business travel. According to Salesforce sustainability VP
Patrick Flynn, a layered approach is still required.

“With our climate strategy,
we follow the mitigation hierarchy: reduce emissions, mitigate them and last, offset,”
he said. “The interesting thing that plays out, even as you pull the
levers in order as hard as possible is that you end up making achievement from
the bottom [of that hierarchy] up.” Salesforce has been offsetting its business
travel and commuting emissions since 2019 but has recently moved toward a much
more robust sustainable business travel strategy. (Read the Salesforce
Progress Profile
in this issue.) One reason for this, said Flynn, is that
it has taken market innovation time to catch up to the relatively new demand
urgency for carbon reduction and mitigation solutions.

A burgeoning market for
sustainable airline fuel and nascent innovation in carbon sequestration technologies,
which remove carbon from the air, are two ways corporations are investing in
partnerships to help green up the travel industry, specifically, and the globe
more broadly. United’s recent Eco Skies Alliance, which will enable the airline
to purchase 3.4 million gallons of SAF this year, is just one example in which
the industry is working with corporate travel partners “to accelerate solutions for flying sustainably,”
said managing director for global environmental affairs and sustainability at
United Airlines Lauren Riley. United has committed to going 100 percent green
by 2050, without using carbon offsets. “I think we are the only airline worldwide
whose strategy does not rely on carbon offsets,” she added, “because
they enable the status quo.”

Offsets or Upsets?

Right now, however, Flynn said carbon offsets needn’t be an upset
for travel managers looking a building a comprehensive sustainability strategy
for a corporate travel program. The key, he said, was to choose verifiable, high-quality
offsetting programs that clearly do good work. While costs can vary
tremendously, quality offsets may be expensive enough to make the user think
twice about their budget before executing a trip that would trigger the additional
expense. Also, he said, it’s important to work toward a final state in which those
offsets would be fazed out over time as sustainability technologies and solutions
catch up to industry requirements.

“It’s reasonable to have pushback against carbon credits
because they are so varied in terms of their quality,” Flynn said, adding
that they any carbon credit solutions should be verified through The Gold Standard
or Verra’s Verified Carbon Standard. “That would be table stakes,” he
said, citing the need for permanence of the project or strategy, additionality (i.e.
the actions taken by the project are in addition to those that either naturally
occur or are required by law to occur) and they produce no leakage (referring
to the transfer of carbon use from one market to another by, for example,
placing a premium on a certain fuel type that will simply be sourced in another
market). He also emphasized that carbon offsetting programs can go farther than
serving as a bridge to future good. “They should also have social
co-benefits,” to the community where they are performed.

Harrop checked off projects with the latter in mind: These days,
the practice is more accountable. “Offset projects include fuel efficient
stoves in Africa, borehole projects in Uganda, ceramic water purifiers,
environmental activity that adds value to where it’s being done,” he said.

Given that these types of projects are
accessible, “it’s important to follow ‘and’ strategies now,” Flynn
said. “Carbon credits are no substitute for any of the other work
we need to do, but we need to take bold action today at the highest quality
possible and [also] set in motion the medium- and longer-term shifts.”

American Express Global Business
Travel VP global sustainability would agree. “We cannot offset our way out
of this problem, reductions need to be the priority,” she said. “But
travel is a driving force for economic prosperity and GDP growth, so it will
continue, and if you want to address the emissions associated with travel, the
only thing you can do is offset them for now.”

Travel managers should remain vigilant,
however, and realize why there is still room for debate, even as quality
improves for offsets and other alternatives begin to emerge. PredictX CEO
Keesup Choe what could be viewed as abusive use of carbon credits and lack of
understanding about how far off the “future” can be for delivering
results from certain carbon offsetting activities. “The misalignment
of time scales is tragic,” Choe said. “For the first 10 years, a solar
farm is a contributor, not a reducer because of the cement, which is one of the
biggest contributors to carbon.”

Another anomaly is the cost per tonne of
CO2, which ranges from $5 to $200. Because of what Choe describes as the murky
world of offsets, some companies take matters into their own hands: In a recent
webinar hosted by PredictX, panelist Hannah Arcaro, regional environmental
manager for EMEA at UBS said that the bank preferred to invest directly in
sustainability projects. 

If You Choose to Offset

Industry programs are becoming more
available for travel managers who need to offset a portion of their program’s
carbon emissions. American Express this year announced that it offset all its
2019 business travel emissions and would extend preferred offsetting terms with
Carbonfund.org and Carbon Footprint to its clients, calling each offsetting
project ‘verified and validated’ which reduce the onus on travel managers to do
that research.

Advantage and WIN Global Travel Network
have partnered with greentech company Thrust Carbon to provide clients with the
wherewithal to calculate the carbon produced from their trip (air, hotel, ancillaries).
The calculator uses detail in existing travel data environments such as
aircraft type, passenge /freight ratios; 17 vehicle categories for car
rental; regional and country specific standards in accommodation or serviced
apartments; public transport to assess emissions and will recommend options to

TripActions debuted a similar feature within
its app earlier this month—real-time emissions calculations based on a choice
of standards, combined with offsetting options that can be aligned with an
organization’s own charitable mission. Several other established and emerging providers
are moving in this direction as well. (Read
more here.) 

Like the travel manager partnering with
her preferred airlines to offset flight emissions after taking internal
measures to reduce by changing behaviors, there are ways to use carbon
offsetting tactics in the short term. Nearly 20 percent of travel managers tasked with travel sustainability are reaching for these solutions today, according to BTN’s Sustainable Business Travel survey. But responsible usage requires a larger innovation
strategy that will carry a travel program and the travel industry into a more
sustainable future.

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