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Make a Difference: Carbon offsetting - Carbon counters

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Carbon offsetting has become such a fad that it makes it difficult for HR professionals to take it seriously. But it has its place, says Beck Dawson, as part of long-term environmental strategy.

Carbon dioxide is literally choking the planet to death. Despiteworldwide international pressure to reduce CO2 emissions, a recent shockfinding by scientists last year revealed they have actually been rising35% faster than expected since 2000. This is despite Britain pledging tocut its CO2 emissions by 60% from 1990 levels by 2050.

The role British business can play in shouldering some of theresponsibility is not being ignored by Government. The EU is responsiblefor 14% of global CO2, with the UK contributing to nearly half of it.The scale of the waste can be seen by the fact that if each workerturned off their PC each day, they would save enough energy to make21,000 cups of coffee a year. Offices are also too hot. Having abuilding just one degree cooler could reduce energy consumption by amassive 8% each year.

Yet, according to the Carbon Trust, only 1% of UK firms know theircarbon footprint. Should HR take the lead? Yes. Carbon offsetting -where measures to soak up an equal amount of carbon to that which isemitted - has been touted as a solution. But it is still surrounded bycontroversy. So what are the problems, and why should HR beinvolved?

SALARY SACRIFICE: HOW EMPLOYEES CAN DO THEIR BIT

Schemes that enable employees to contribute money towards helping theenvironment are starting to proliferate. By Glynn Davis

As employees' awareness of the need to 'do their bit' for sustainabilitycreeps rapidly up the agenda, schemes that enable them to do so arebecoming ever more involving and imaginative.

One recent scheme, run by car leasing and fleet management firm ALDAutomotive, involves drivers making monthly direct-debit donations tothe Woodland Trust, which then plants trees to offset the CO2 emissionsfrom the cars. This was originally only available to the company's fleetcustomers but has since been extended to include individual company cardrivers.

Another increasingly popular method for people to offset their carbonusage is through salary-sacrifice schemes. BSkyB was one of the earlyadopters. In May last year and as part of its broader environmentalinitiative, its 'Choose the Bigger Picture' was implemented foremployees, working with charity PURE. Workers make a monthlycontribution, based on their carbon footprint, which is automaticallycalculated when they complete an online questionnaire. The moneycollected from participants is then placed in an account held by PUREand assigned to environmental projects, as well as buying up sparecarbon credits.

The latest carbon-offsetting salary-sacrifice scheme, which is due to belaunched imminently with a major FTSE 100 organisation as its firstparticipant, is the Greengauge programme from Projectlink Motivation.Stephen Humphreys, managing director, says: "Many employees want to dosomething green and there are some practical things you can do butcarbon offsetting is tricky stuff as people see it as a cop-out. Sowe've come up with a programme that allows employers to achieve resultswithout it costing a lot of money."

Unlike many more complex schemes, he says Greengauge requires only thecompletion of a simple, one-click online questionnaire to determine aparticipant's average carbon footprint (based on calculations from TheCarbon Neutral Company). This is then converted into a monthly deductionfrom their salary - so for two adults plus one or two children themonthly payment to the scheme would be 22.50.

Another key differentiator, according to Humphreys, is that theGreengauge scheme shows where an individual's money is actually beingused to offset their CO2 emissions against- whether it is atree-planting programme in Bolivia or Botswana. "A lot of schemes don'tshow you where your money has gone," he claims.

Beyond individuals contributing to a variety of environmental projects,Humphreys says a large organisation that adopts the Greengauge schemecould have its own project - such as planting a whole forest - at a costof 1 million-plus. "We can give them a project of their choice,as long as they underwrite it, which they can then sell to theiremployees," he says.

He adds that very little of the monthly contributions goes towardsadministration charges, with companies charged a fixed fee for eachemployee who signs up to the scheme, which equates to less than 1.50 per month.

Organisations signing up to the scheme receive a launch pack with allcollateral co-branded with Greengauge and the company's name. These areused to promote the scheme to staff and include pay-slip inserts andposters.

As a web-based scheme, a key component of Greengauge is a site thatenables participants to monitor their specific projects, which Humphreyssays helps maintain their interest in the scheme.

Another potential generator of ongoing interest is access to an onlineinteractive 'Household Energy Efficiency Plan' that shows participantshow to select ways of reducing their household emissions (such asrecycling and filling the kettle with only the amount of water theyneed) and then monitors their progress and calculating the energy theyhave saved.

Although Humphreys says he is not yet able to announce the scheme'sfirst major participant, he reveals that discussions are at thedecision-making stage with eight major UK companies and that the schemewill launch shortly with a "huge company on board".

He is confident that this will be the first of a number of largebusinesses to sign up for the scheme: "With no marketing at alleverybody that we have shown it to has been interested," he adds.

And for companies that do sign up, he predicts they will enjoy a strongtake-up from their employees, with as many as 10% joining. That maysound modest but Humphreys says this would compare very favourably withother more established salary-sacrifice schemes.

HOW CARBON OFFSETTING WORKS

Carbon offsetting by companies and individuals is mostly voluntary. Itis generally arranged through third parties (such as Carbon Clear, CleanAir Cool Planet, Pure Trust or members of the Carbon Offset ProvidersCoalition) that organise audits and choose where to invest on thecompany's behalf to prevent or capture CO2 emissions. Projects are oftenin the developing world, although some provide local options. A carboncredit fee is paid to the provider and invested on their behalf to matchtheir emissions.

Most offset projects originally involved tree planting and globalreforestation projects although these have come under intense scrutinyfrom critics for taking too long to show results. Many tree species onlycapture carbon once they reach maturity, sometimes taking decades tomeet their carbon target. Planting inappropriate tree species canactually lead to carbon release from soil erosion and biodiversity loss.Alternatives to tree planting include renewable energy projects, energyefficiency schemes and methane capture from landfill sites.Unfortunately, projects vary greatly in their effectiveness andsustainability, so choosing the appropriate scheme is important.

CHOOSING A CARBON OFFSETTING SCHEME

Carbon offsetting has been unregulated in the UK, leading to claims ofwhat Jonathan Shopley, CEO of the Carbon Neutral Company, calls 'carboncowboys'. But now the Department of Environment, Food and Rural Affairs(DEFRA) provides guidance on choosing an offsetting scheme. Itrecommends two standards: the Voluntary Gold Standard, a Swiss-basednon-profit foundation, and the DEFRA Code of Best Practice, soon to belaunched in the UK. Both set standards for delivering real carbonreduction solutions by emission reduction credits, validatingcalculations of emissions, providing clear information on projects andtransparent pricing. In the longer term, regulation is likely to belinked to international emissions trading, often known as 'carbontrading'. It is worth asking pointed questions of suppliers to determinetheir quality.

CARBON OFFSETTING VS CARBON REDUCTION

While companies have been tempted by the ease of carbon offsetting, theview of organisations such as the Carbon Trust is that businesses mustreduce CO2 emissions directly. In September last year it announced ithad signed nine partners (including Coca-Cola, Halifax, and CadburySchweppes) to begin drafting a carbon footprint standard. In themeantime HR should be supporting energy efficiency pilots targetingheating, electrical appliances and manufacturing processes. Buyingcertified green electricity from renewable sources will immediatelyeliminate carbon emissions from your energy use. HR can also make dentsin emissions and air pollution by carefully considering staff transport,including the management of fleet vehicles and options for reducingstaff travel, such as video-conferencing and home-working. Only whenthese and other steps are taken to reduce emissions (such as replacingpetrol cars with diesel or LPG or hybrids), should offsetting be used.Ideally, carbon offsetting should be the answer to account for the restof your carbon footprint. Alternatively it can be used for specificareas of a business. For example, airlines are increasingly offeringcarbon offsetting for individual flights as well as company bookings.Some travel suppliers now offer these options as a matter of course,although you will have to trust them to make the decision on whichcarbon projects to invest in.

GETTING EMPLOYEES INVOLVED

Companies are also increasingly offering employees the chance to getdirectly involved in offsetting linked to their carbon emissions at workor even at home. Carbon offset plans are offered to individuals usingcompany cars based on annual or monthly mileage, paid either by thecompany, or the individual involved. BSkyB was one of the first to offeremployees a salary- sacrifice scheme (see Human Resources, September2007). This has made it easy for staff to reduce their environmentalimpact, and the scheme enables BSkyB to use the benefit as both arecruitment and retention tool. Clients of the new Greenguage scheme(see box,p35) will be hoping it delivers in these areas. It allows for asimple calculation of carbon emissions that is then converted into a sumrequired to offset these emissions.

Sometimes it is possible to link to projects where staff can be moredirectly involved - for example, by visits to renewable energy farmsboth for educational and recreational purposes. Local schemes, inparticular, have the benefit of directly reducing UK carbon emissionsand pollution, and being accessible for team-building or other companyactivities. This is a vital entry point for HR and CSR directors. TheHannover Consultancy has been investigating ways of engaging employeesin the issues by launching an internal carbon trading scheme. Based onthe market idea of a carbon quota, employees are set an annual personalcarbon emissions budget. Those that emit less than the target receive acash bonus, while those that exceed it pay an offset fee. This schemeencourages real carbon saving as well as providing a competitiveenvironment in which to learn about low carbon options and to limitemissions and could be the next stage for your business.

DOES IT REALLY 'MAKE A DIFFERENCE'?

Is carbon offsetting simply a guilt-free way of buying our way out oftrouble or taking any real responsibility? Carbon offsetting iscertainly much better than doing nothing at all, despite the cynicismwith which some schemes have been greeted. Some of this has been to dowith the way they are communicated. Get the communications right andemployees become powerful ambassadors. But get it wrong, and accusationsof 'greenwashing' will fly. Carbon offsetting is certainly appropriateas part of a long-term environmental strategy along with steps todirectly reduce carbon footprints.

Beck Dawson is sustainability director at business communications andsustainability specialists The Hannover Consultancy

WHAT TO ASK SCHEME SUPPLIERS

- How do they choose which projects to invest in?

- Do they manage the projects themselves or do they pay another party tooperate them?

- How can they be sure that the carbon emissions savings they claimactually happen?

- What happens if they fall short of the targets?

- Would the carbon savings have occurred anyway without the additionalinvestment?

- Is it possible to visit the schemes you invest in?

- Is the scheme not-for-profit or profit-making?

- Are the projects in the UK or offshore?