Moving from a Compensation to Contribution Mindset

We know, offsetting, carbon credits, decarbonization, net zero and all the other moving parts around how companies and individuals can play a role in tackling human-caused climate change gets very complicated, very quickly.

Leaving the role that we all play as individuals - as initiators, catalysts, mind-changers - to one side for this post, we want to explore how there's a mindset shift needed in the way we collectively approach offsetting and carbon credits.

Before we do, it's helpful to take a step back and reconfirm some key terminology that often gets conflated and confused.

- Carbon Credits - these are virtual assets, in the form of certificates for tonnes of carbon dioxide, produced by projects intended to either reduce, prevent or removal the release of more greenhouse gases into the atmosphere.

As we often talk about, there are a wide array of the types and efficacy for the projects that produce carbon credits. Both from their approach, as well as their effectiveness at reducing or removing planet-heating CO2 from the atmosphere (there's a link to more on this at the botton of this article).

- Offsetting - this is the activity of a company or individual of using carbon credits, of whatever type, to compensate for a new carbon dioxide emission being released into the atmosphere.

For companies, this will be as part of your decarbonization, climate, net zero or sustainability program; while for individuals, this is usually for a thing they've done or purchased. The idea has always been to compensate tonne-for-tonne for the CO2 being released by the activity.

Unfortunately, in reality this has not been happening, and with certain types of carbon credit - particuarly avoidance credits - it's often not possible to say any carbon has been reduced or removed at all. This compensation tonne-for-tonne approach and mindset is a flawed one that we will need to evolve on from quickly. If carbon credits that do actually remove carbon in a real and measurable way are going to play the very crucial role the science shows us we need, we have to.

Navigating the Science-Backed Path: Companies, Carbon Credits, and the Journey from Compensation to Contribution

In the varied and vibrant tapestry of corporate strategies to tackle climate change, the threads of carbon credits and offsetting weave a complex pattern. Understanding this maze is not just about ticking boxes; it's about genuine transformation. Companies are increasingly recognizing that merely compensating for emissions (often in the cheapest way possible) is a baseline, not a finish line. That quality matters, has always mattered.

In fact, the real race is about contributing meaningfully to either reducing new emissions or removing carbon from the atmosphere. Removing is especially critical for emissions that cannot be reduced or decarbonized, either now or down the line. Let’s delve into this idea of compensation versus contribution in the corporate world a little deeper.

Compensation: The First Step, Not the Destination

Imagine you're at a grand feast, and you accidentally spill some food. Compensation is like cleaning up your mess. It's essential, yes, but it doesn’t address the core issue: how much you're taking from the platter in the first place. In the corporate context, carbon credits and offsetting traditionally served as a mop to clean the spill, a way for companies to 'compensate' for their greenhouse gas emissions by investing in projects that were supposed to reduce carbon elsewhere.

However, this approach, akin to a band-aid solution, has its pitfalls. It's often criticized for giving companies a 'license to pollute', allowing them to carry on with business as usual, as long as they pay to offset their emissions. It also assumes that there is equivalence between the emissions being compensated for and the projects used to try to balance the carbon books - and that has rarely been true so far. While it's a start, compensation alone is akin to treading water – it keeps you afloat but doesn't move you forward.

As our understanding of climate change deepens, it's clear that the goalpost has shifted. It's no longer just about making amends; it's about making a difference, grounded in the science. It's critically important to be able to justifiably measure the difference you're making, that there is equivalence - meaning that it's like-for-like as much as possible - between the carbon pollution you're emitting and the way you're trying to compensate for it.

Contribution: Stepping Up the Game

Enter 'contribution' – a more evolved and impactful approach, grounded in making measurable progress. This isn't just about cleaning up the mess. It's about not making the mess in the first place, and if you do, you go a step further to restore the balance. When companies adopt the contribution mindset, they go beyond offsetting their emissions. They invest in initiatives that categorically reduce current emissions, actively remove carbon from the atmosphere, consider their historical emissions, as well as their "beyond carbon" responsibilities, all to drive a net positive impact.

This paradigm shift from compensation to contribution is not just about doing good; it's about being good. It's a commitment to deep, structural changes in business operations, pushing for renewable energy, energy efficiency, reinventing processes and supply chains as well as innovative technologies to transform and rebalance the operations of a business to be resilient and more competitive, ready for the decarbonized future that is very much on its way. It's about taking responsibility not just for the company's direct actions but also for the wider community and the planet.

It is no longer viable - and will increasingly become less so - to consider sustainability, net zero and corporate responsibility as separate to core business operations. In a rapidly changing climate, as we are both seeing with our own eyes and through the science, it is now core to building and growing stable and defensible companies for the long term.

The two key themes for companies that will be successful this century are how they will recreate themselves in light of the threats (and opportunities) of both an increasingly unstable climate as well as ever more capable AI and automation.

And for those who need a stick, rather than a carrot, where climate issues are concerned: there isn't going to be less reporting and accountability required in the near future and beyond, only more. Getting good at it, and earlier than your rivals, is a competitive edge.

In reality, unlike the compensation mindset of tonne-for-tonne offsetting, thinking about the contribution you're making means making the carbon credit you're using to offset like-for-like. That it does what we need it to do matters more than the theoretical total tonnes. Does it really contribute to solving our main challenge of reducing atmospheric CO2 in a measurable and permament way?

This is true both for company programs as well as for what we do as individuals.

The Portfolio Approach: A Symphony of Solutions

Embracing a portfolio approach to carbon management is like conducting a symphony – it's about harmonizing various instruments to create a masterpiece. Recognizing that there's no one-size-fits-all solution to climate change, companies are diversifying their strategies. Combined with decarbonizing their operations, they're investing in a range of carbon removal solutions, from reforestation and Enhanced Rock Weathering to Direct Air Capture and storage technologies, plus more. This not only mitigates risks but also maximizes impact, ensuring that their contributions are robust, scientifically validated, and socially beneficial.

But why stop at mitigation? Progressive companies are viewing their climate actions as a catalyst for innovation and competitiveness. They're not just neutralizing their impact; they're harnessing the power of sustainability to drive business growth, brand value, and stakeholder engagement. In this light, carbon removal becomes not just a moral imperative but a strategic asset. It goes beyond claims and narratives to clear competitive operational advantage.

From Words to Action: The Zopeful Way

In the spirit of what Zopeful is all about, it's clear that talking the talk is not enough – it's overdue time to walk the walk. Companies are being called upon to translate their climate pledges into concrete actions that are scientifically defensible. This involves rigorous tracking, transparent reporting, and continuous improvement in their net zero programs, decarbonization efforts and carbon removal portfolios. It's about setting ambitious targets, not as a distant dream, but as a present-day and ongoing commitment.

But let's remember, while companies play a pivotal role, this journey is a collective endeavor. It's also about each one of us, as consumers, employees, and citizens, supporting, advocating, and driving change.

Together, in this shared voyage from compensation to contribution, we can turn the tide, one tonne, one carbon credit, one offset, one innovative solution at a time. Because when it comes to our planet, we're not just stakeholders; we're caretakers. And in this grand feast of life, it's not just about enjoying the platter but replenishing it for generations to come.

Soooo, we'll wrap up with a simple question: what contribution would you like to make to this incredible and inspiring opportunity we have to rebalance our relationships with the planet and everything else that lives here?

Have hope, make progress 💚
Team Zopeful

Further reading:
1. Transitioning Company Offsets to Carbon Removal
2. Avoidance vs Removal Carbon Credits
3. Building Climate Companies - 3-day introductory course
4. Why is it crucial to invest in carbon removal now? 

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