Masthead graphic based on a painting by Gudrun Thriemer.

Wednesday, July 02, 2008

B. Burtis; I. Watt; "Getting to zero: defining corporate carbon neutrality," Forum for the future, 2008.

[The issues discussed here go far beyond questions associated with hockey or the use of nuclear power. However, it would be appropriate to recall Stephen Harper's claim that nuclear energy is "emission free." This testimonial is one kind of frivolous claim to being inherently "carbon neutal" that gives rise to the first question below. A hockey teams whose primary or even sole emission reduction strategy is to use some of the big bucks to buy carbon credits and thus "offset" frequent flyer miles and refrigeration plants fueled by natural gas would be an example of the kind of delusion that gives rise to the second question. -jlt]

Two key questions frame the debate about neutrality. Firstly, which emissions should an organization accept responsibility for (the “boundary” question)? Should the organization focus simply on the direct emissions caused by its operations? Or is it also responsible for neutralizing some or all of the emissions that arise in its supply chain or from the use of its products?

Secondly, what strategy should an organization use to achieve neutrality? How far must a company go in actually reducing its emissions baseline? And to what extent can neutrality be achieved through the purchase of carbon offsets or “green” energy?


The Executive Summary gives this glimpse of an answer to the boundary question:
The process for achieving neutrality should begin with an inventory of the company’s entire carbon footprint (or a full life-cycle analysis of a particular product) and the setting of a clear boundary. The company should then embrace a neutralization strategy that prioritizes the avoidance of emissions, their reduction through energy efficiency, the replacement of high-carbon energy sources with low- or zero-carbon alternatives, and then the use of high-quality carbon offsets. Every claim must be backed up by easily accessible, clearly communicated information regarding the company’s full carbon footprint; the boundaries it has applied; and the strategy that has been embraced to achieve neutrality.

A more detailed discussion of implementation leads to the report's eight recommendations. Since these are likely to find immediate practical use sooner among citizen's groups than among the industries they are meant to influence, I have reproduced the full list from the Executive Summary here:

1) Embrace a stretching boundary

The key tension surrounding any claim of neutrality remains reconciling the absolute nature of the claim – implying zero net impact – with a practical boundary-setting process. In the spirit of the term, we recommend that companies accept that claiming neutrality implies some responsibility to consider and address broader value-chain emissions. This is not to suggest that companies accept legal responsibility for the direct emissions of others, but rather that indirect emissions be explicitly considered as part of the neutrality process.

2) Demonstrate a broad understanding of your entire carbon footprint prior to making any claim of neutrality – and ensure that your claim covers a relatively significant set of emissions

A transparent understanding of the company’s full carbon footprint is essential as a prerequisite for any claim of neutrality, regardless of what boundary is set. This does not mean that companies should chase every gram of carbon in their value-chain, but rather that they are able to broadly disclose and discuss where their biggest indirect emissions lie.

Questions remain about the appropriateness of a company making a limited claim of neutrality (i.e., regarding its “manufacturing operations”) when the associated emissions are relatively trivial compared to other emissions in its value-chain. If companies claim neutrality for relatively insignificant sets of emissions, the concept risks losing its legitimacy.

3) Exhibit caution in making blanket corporate-wide claims of neutrality

Any claim of neutrality brings with it some risk, but unqualified claims are riskier than others. Unless the company in question can clearly demonstrate a full understanding and subsequent “neutralization” of its entire climate footprint, blanket claims are likely to mislead and should not be made.

4) Consider whether a claim of neutrality will resonate with your stakeholders

Some companies will always find it difficult to convince stakeholders of the sincerity of any neutrality claim – either because the use of their product or service leads to emissions that dwarf their direct emissions, or because they are seen as fundamentally unsustainable. For those companies, we recommend that they avoid the use of the language of carbon neutrality, and instead seek to show climate change leadership in other ways.

5) Use the carbon management hierarchy to inform your neutralization strategy

The strategy used to achieve neutrality should be informed by a hierarchy that prioritizes the avoidance of emissions, their reduction through energy efficiency, the replacement of high-carbon energy sources with low- or zero-carbon alternatives, and then the use of high-quality carbon offsets.

Offsetting will play an important role in any neutrality strategy, but a claim of
neutrality will ultimately be judged on the company in question being able to demonstrate a declining emissions baseline.

6) Be completely transparent

Given the complexity of the issues and assumptions surrounding any claim of neutrality, absolute transparency regarding all aspects of the claim is essential. Every claim should be backed up by easily accessible information regarding the company’s full carbon footprint; the boundaries it has applied; and the strategy that has been embraced to achieve neutrality.

7) Exhibit and sustain broad leadership on climate change

While it would be technically feasible for a company to achieve neutrality through a strategy of 100 percent offsetting, this would not represent the spirit of leadership embedded in the term. True climate leadership is indicated by companies rethinking their business strategy; engaging deeply with their suppliers, customers and peers; and developing products and services that will thrive in, and help bring about, a low-carbon economy.

While linking such actions directly to a claim of neutrality remains problematic, any company that wishes to position itself as a leader on climate change needs to embrace them.

8) Treat neutrality as a long-term commitment – and an ongoing, dynamic challenge

As stakeholder interest in full life-cycle emissions grows – and methodologies for measuring and allocating responsibility for such emissions develop – we can expect the rules of the game for claims of neutrality to change. Companies should embrace this challenge and use any commitment, or aspiration, to neutrality to drive ongoing change. A commitment to neutrality must therefore be a long-term commitment.

Getting to Zero is published by the UK Forum for the future and the US Clean Air - Cool Planet. The whole document (pdf, 52pp) is available here =>
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