Companies and organisations must properly investigate carbon offset investments

It may sound like the opening line to a corny joke, but Disney, the Pope, Fiji Water and Chevrolet share a common trait: they’ve all fallen foul of carbon offset standards and have been pulled up for it.

In one of the most spectacular falls from carbon-grace yet, Fiji Water recently had a lawsuit filed against it over exaggerated “carbon negative” water claims.

The company has claimed to offset 120% of its emissions, but when a California resident queried this, the company was shown to be basing its claim on the use of forward accounting: claiming credit for future emissions savings that have not and might not manifest themselves.

Fiji Water was accused of unfair competition and deceptive marketing “from which it had richly profited”. The class-action lawsuit is ongoing and the verdict will no doubt attract a great deal of publicity.

The case was also aired as part of UK television station Channel 4’s Dispatches series in June 2011, in which Conservation International (Fiji’s offset provider) was challenged over the progress of claimed reforestation projects. The firm admitted to having so far only planted less than two square miles of forest on behalf of the water company – a weak basis for carbon negativity.

God forsaken offsets

Even the Pope has been challenged on carbon claims … and found wanting. The Holy See had good intentions when it established its own Vatican Climate Forest, to be planted in Hungary, believing that the forest would enable them to become the world’s first carbon neutral state.

The Vatican’s trees were never in fact planted. The offset retailer offering them, KlimaFa, went bust, despite having received the land free of charge from the Hungarian government.

Consequently all claims of carbon neutrality by the state were completely false.

Father Benedettini told the Catholic News Service: “We understand KlimaFa is not doing well [financially], but the good name of the Vatican is at stake.” Aside from a reputational cost, there was also a financial one. The Vatican is considering legal action against the providers.

Mickey Mouse carbon credits

The Ecologist posted an article in April 2011 that accused Disney of using “controversial” carbon offsets.

The firm had invested $15.5m in offsets, including $3.5m on HFC-23 gas destruction, and $7m on reforestation and avoided deforestation – both of which are widely regarded as flawed.

Indeed, the EU has banned European industries from using HFC-23 project credits, whilst forestry projects continue to attract controversy due to the difficulties in measuring and verifying their effects on greenhouse gases.

Earlier, in 2010, car manufacturer Chevrolet announced it was offering carbon offsets with every car they sold. A year later, Bloomberg Business Week investigated and revealed a serious flaw in this seemingly impressive deal.

Despite claiming all of the reductions from a US domestic insulation scheme the company were only paid a tiny portion (3%) of the funds required, whilst the US government paid the bulk. Essentially this rendered Chevrolet’s offsets hot air as the vast majority of the project (and emissions savings) would have happened anyway.

Navigating the maze

So what can firms do to protect themselves against such mistakes – and accusations? Websites such as CORE (Carbon Offset Research and Education) provide a good summary of what to look out for, along with links to other guidance.

UK government guidelines on green advertising standards are issued by the Department for the Environment, Food and Rural Affairs (Defra). These guidelines are a valuable resource for firms looking to accurately (and thus safely) maximise the PR potential of their offsetting activity.

Understanding the subtleties of the market may require expert consultation – particularly in such a fast-moving area with new standards, verification bodies and projects arising every year.

Companies should investigate what they’re buying and communicate activities clearly. The market for credits of questionable value will continue to rise unless they do so. Firms that make the decent step to offset their unavoidable emissions need to wise up lest they share the fate those accused of “dodgy” offsetting to date.



Related Reads

comments powered by Disqus