The audit of our 2022 emissions has been completed by myclimate in Zurich, and we have invested in a series of projects to offset our carbon footprint. In previous years, that would have allowed us to describe ourselves as a carbon neutral company, something of which we have been rightly proud since we first achieved that status in early 2020. However, myclimate have made us aware of some important changes in the use of that terminology. As we have a strong aversion to ‘greenwashing’, where companies make claims about their status that are not backed up by their actions (known as ‘lying’ in simple terms), we wanted to explain the change here.
Under the Paris Agreement, an international treaty on climate change, signatory countries are required to set binding targets for reducing their greenhouse gas emissions and have committed to limiting global warming to as close to 1.5°C as possible. As many countries do not have the financial resources to implement the measures needed to reach this target, the agreement provides for the possibility of climate protection measures being financed by third parties, such as ourselves. In such cases, the government of the country in question has the right to decide whether to count the effect of any measures taken against their own reduction commitments, or allow the party that funded them to count the emissions reductions achieved in the project towards their own reduction target.
Let us use the example of a project that we funded last year, namely providing clean water to schoolchildren in Uganda using solar power. In the past, we would have counted the CO2 reduction from our part of that project against our carbon footprint. By funding a series of such projects that offset our full footprint, we were able to claim the status of ‘carbon neutral’. However, we can now only do that if the Ugandan government agrees that we can do so, and does not use that reduction in CO2 against its own targets. In order to do so, the project needs to be set up with what is known as a Corresponding Adjustment (CA), which avoids the possibility of any ‘double counting’ by making it clear that the CO2 reduction belongs to us. Unfortunately, no system has yet been developed for CAs in this space, so until someone fixes that problem, we are no longer able to use the term ‘carbon neutral’ as before, a clear example of good intentions running ahead of implementation.
All of this means that we have done exactly the same as we have done for our emissions since 2019, namely funded quality projects to offset them, but we are no longer able to claim the status of carbon neutral. Instead, myclimate grant companies that pay for carbon reduction projects in this way the status of ‘Engaged for Impact’, which you will see in our email footers in place of the previous carbon neutral designation. Hopefully, the infrastructure for CAs will be not too long in coming, as carbon neutral is a term with which many of us are familiar, and confusing it in this way is not hugely helpful, even if the goal of stopping double counting is laudable. However, that is out of our hands.
Obviously, the issue of CAs (or lack of them) applies to all companies funding projects in this way, not just us, so it is hard to see how any company will be able to claim that status of carbon neutral in the foreseeable future. However, we suspect that you will continue to see companies using the term, even if it is not actually accurate. All we would say to that is that be wary of people claiming to be things that they cannot be, and if you are choosing a company to deal with on the basis of their sustainability credentials, be aware that not everyone is as committed to doing this the right way as we are.