Comment: Corporations’ climate pledges may be empty promises

By Mark Gongloff / Bloomberg Opinion

Some of the world’s biggest companies have made ambitious promises about cutting carbon emissions. But they might be placing too much faith in a carbon-negation technique that has turned out to be about as reliable as financing your retirement with Bed Bath & Beyond coupons.

The climate pledges of two dozen companies leading the corporate quest to curb carbon emissions are mostly vague, insufficient or both, according to a new report by watchdog groups Carbon Market Watch and NewClimate Institute. Together they have vowed to collectively slash 2.2 billion tons of greenhouse-gas emissions by 2050, or about 4 percent of the world’s total. That may not sound like much, but if we hope to cut total emissions in half by 2030 and to zero by 2050 — as we must do in order to limit global warming to 1.5C — then every little bit will help.

Unfortunately, that promised 2.2 billion dwindles to about 890 million once you adjust for questionable climate mitigation strategies, according to the report. Perhaps the most notable is the reliance by many companies on “carbon offsets.” These are essentially credits for financing efforts to take carbon out of the atmosphere; most often, by planting trees. The report estimates that between 23 percent and 45 percent of promised emissions savings are due to such offsets.

If offsets sound too good to be true, that’s because they often are, a recent examination of the system showed. Last month, a report by the Guardian, Die Zeit and SourceMaterial, an investigative journalism nonprofit, claimed that 94 percent of the rainforest-protection offsets certified by Verra, the global offset gatekeeper, did nothing to help the environment. Verra vehemently objected to the report, but it added to a growing sense that offsets are no longer the gold standard for corporate responsibility.

“The offset market is broken,” Barbara Haya, director of the Berkeley Carbon Trading Project, told the Guardian.

Just a few years ago, offsets were about to boom, with everybody from JPMorgan Chase to Salesforce Chief Executive Officer Marc Benioff jumping into the forestry game. But environmentalists and other critics quickly found flaws in the model.

It became clear that the offset system as currently designed lets companies claim credits without meaningfully reducing the amount of carbon in the atmosphere. For one, offset initiatives sometimes piggyback on projects that would have happened anyway, meaning they aren’t adding to the world’s carbon-removal efforts. Multiple companies can sometimes claim credit for the same offset. Worse, these efforts can “leak,” absorbing carbon in one place while releasing it somewhere else.

And a big problem with using trees and other landscaping approaches to offset emissions — as three-quarters of the companies in the watchdog report do — is that there simply isn’t enough land on the planet for everybody to absolve their carbon sins this way. The watchdog-group report suggests we would need two to four Earths to accommodate every company trying to do this. On the one Earth currently available, much of the best land for forestry is already occupied by cities, farms … or forests.

What’s more, trees aren’t reliable carbon sinks. They are great, of course. As my colleague Lara Williams has written, they help cool cities during heat waves, while absorbing pollution and improving public health. And love for them is bipartisan; even Donald Trump said he wanted to plant a trillion of them.

But trees are also vulnerable to being killed by disease, insects, drought and fire, which releases their stored carbon right back into the atmosphere. Global warming is making all those dangers more likely. That’s why many climate scientists argue we have to curb emissions before we start planting a trillion trees.

Corporations have been slow to acknowledge these problems; understandable, given how much easier and cheaper it is to claim an offset than it is to actually change behavior. Some have stopped using the word “offsetting” and simply replaced it with even hazier terminology such as “insetting,” which sometimes amounts to taking credit for emissions reductions within a company or its supply chain that might have occurred regardless of the climate benefits.

Some companies are trying to do better. EasyJet, for example, told the Guardian it had stopped using offsets and was shifting its focus to researching carbon-neutral aircraft. This is sometimes called the “climate contribution” model, in which companies finance environmental work without claiming it cancels out their own emissions.

Companies and governments could step up and build a more credible offset market with higher standards, as Anne Finucane has argued. But instead of waiting for that to happen, more companies should go the EasyJet route, while also being more transparent and aggressive about their emission-reduction efforts. As dangerous as unreliable accounting is for business and finance, it’s even worse for the planet.

Mark Gongloff is a Bloomberg Opinion editor and columnist covering climate change. A former managing editor of Fortune.com, he ran the HuffPost’s business and technology coverage and was a reporter and editor for the Wall Street Journal.