Corporate Carbon Offset Buyers Go The Extra Mile In Fighting Climate Change

Automaker General Motors, financial institution Barclays and cosmetics company Natura Cosméticos couldn’t be more different companies. But they all have one thing in common: they are top voluntary buyers of carbon offsets and pursue these purchases as part of comprehensive carbon management strategies.

A new Ecosystem Marketplace report called The Bottom Line: Taking Stock of the Role of Offsets in Corporate Carbon Strategies dispels the myth that companies purchase carbon offsets to avoid taking responsibility for their contributions to climate change.

Rather, 14% percent of companies publically disclosing climate change information to the CDP’s (formerly the Carbon Disclosure Project) annual survey practice “offset-inclusive carbon management,” meaning that they are investing in hundreds of unique emissions reduction projects in addition to directly reducing their climate impact through energy efficiency, improved product design and other measures. Offset buyers tracked by CDP spent $41 billion in 2013 to make their buildings and processes more energy efficient, install low-carbon energy, switch to cleaner transportation, design more sustainable products, and engage customers and employees around behavior change.

This new report analyzed data from 1,882 corporate climate performance disclosures collected by CDP in 2013 and 2014.

The majority of companies (214) offset emissions voluntarily, compared to 56 CDP-reporting companies that purchased offsets to comply with regulations. Companies based in regions with regulatory carbon pricing programs were more likely to buy carbon offsets, even on a voluntary basis, than companies based in locations without a cap-and-trade system or carbon tax. The European Union, home of the EU Emissions Trading System (EU ETS), hosts the largest number of buyers – both compliance-driven and voluntary – since even companies in unregulated sectors are more familiar with market-based mechanisms for emissions reductions.

 

CDP disclosers voluntarily purchased 16.5 million tonnes in 2013. US-based automaker General Motors topped the list of voluntary buyers of carbon offsets, purchasing 4.6 million tonnes of offsets over the 2012-2013 timeframe.

U.K.-based Barclays was second on the list of top voluntary buyers with 2.1 million tonnes purchased, including from an avoided deforestation project in Kenya and renewable energy projects in India and China. In its CDP disclosure, the bank noted its anticipation that tropical cyclones will alter the credit profile of some of its clients.

California-based utility Pacific Gas & Electric and Brazil-based Natura Cosméticos tied for third place on the list of top voluntary buyers at about 1.4 million tonnes. Natura has reduced its relative greenhouse gas emissions (GHG) by 33.2% over the 2007 to 2013 time period and offset all the emissions it couldn’t avoid through the acquisition of carbon offsets from reforestation, energy efficiency, fuel substitution, waste treatment and REDD+.

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