Feb 14, 2024

How to commit your company to a carbon contribution strategy?

Committing your company to a carbon contribution strategy is essential. But you need to know how to go about it. Here are our top 10 tips:

Louise Frederikke Kofoed-Dam
Louise Frederikke Kofoed-DamCommunication & PR Manager
How to commit your company to a carbon contribution strategy?

While businesses can play a key role in mitigating climate change by reducing emissions and sequestering carbon, they need to know how to avoid the pitfalls of greenwashing and make their strategy successful in every respect. Here are ten key points for a high-quality carbon contribution.

How do you measure and monitor your company's greenhouse gas emissions?

Implementing a strategy for measuring and monitoring GHG emissions is crucial for any company wishing to reduce its carbon footprint. Measuring and monitoring your company's greenhouse gas (GHG) emissions is essential in understanding your environmental impact and implementing effective strategies. For example, the most widely recognised approach in France is the Bilan Carbone. Measuring and monitoring your emissions should be the first step for any company. 

What actions can you take to reduce your company's emissions?

Secondly, it is essential to implement concrete actions to reduce GHG emissions. The Net Zero Initiative approach provides a framework to guide these efforts. Integrating the reduction of emissions alongside the contribution to carbon sinks is crucial, thus ensuring a sustainable and responsible approach.

When should you start contributing, and how much?

Once the GHG measurement and reduction approach has been implemented, it is essential to contribute to carbon sinks. Companies need to act now because the effects of global warming are already underway. SBTi believes that companies should acquire carbon credits to contribute 10% of their incompressible emissions. This will lead to a 90% reduction in their emissions by 2050. It is also interesting to consider that the contribution to carbon sinks must be made in an exercise of responsibility. Funding up to one percent of turnover would seem to be the best way of committing companies to make an honest contribution and meet the current challenge.

Is it better to favour avoidance or sequestration projects?

Since carbon credits can be of two types, emission avoidance projects or CO2 capture projects, the choice to support an avoidance or capture project should not be exclusive. We can compare the stock of CO2 emissions in the atmosphere to a bathtub that overflows: not only is it vital to reduce the flow from the tap as much as possible (avoiding emissions) than draining water (capturing carbon). Companies must adopt a two-pronged strategy to respond effectively to the climate crisis.

Is it better to favour nature- or tech-based projects?

Although it is beneficial to integrate the two types of projects, Solutions based on the Nature (NBS) offer definite multi-dimensional advantages over solutions based on technological (tech-based) solutions, particularly in the fight against the erosion of biodiversity and the improvement of ecosystem resilience. Therefore, companies should prefer these solutions, even if the use of appropriate technologies can supplement them.

On which locations and to which ecosystems should companies be contributing?

For a company wishing to finance Nature-based Solutions, selecting the ecosystems where restoration and conservation projects will be implemented is a major step. Complex and diverse ecosystems, such as forests, offer the best opportunities for substantial environmental benefits. They play a crucial role in the sequestration of carbon emissions, preserving biodiversity and maintaining the ecological balance. In addition, local initiatives should be supported, particularly at the European level, to ensure that project monitoring is more accurate and better understood by the company's stakeholders.

Should ex-ante or ex-post carbon credits be prioritised?

The question of whether to favour ex-ante or ex-post carbon credits depends largely on the type of project involved and its specific objectives. Although both types of credits are important, it is essential to understand their role and impact in carbon projects.

Therefore, the choice between ex-ante and ex-post carbon credits should not be based on a question of preference but on a strategic decision aligned with the company's environmental objectives. The sale of credits ex-ante and their gradual conversion to ex-post illustrates a balanced approach that supports the implementation and validation of carbon sequestration projects in the natural environment.

Should the focus be on a particular label, certification or type of player?

Labels and certifications guarantee the credibility, transparency, and efficiency of projects and play a crucial role in building stakeholder confidence. However, they do not do everything. Above all, it's crucial to ask questions about the project and the player you're dealing with and keep intermediaries to a minimum to be sure you're financing a real project.

How should the quality of funded projects (co-benefits, resilience) be assessed??

Labels and certifications guarantee project credibility, transparency and efficiency and play a crucial role in building stakeholder confidence. However, they do not do everything. Above all, it's crucial to ask questions about the project and the player you're dealing with and to keep intermediaries to a minimum to be sure you're financing a real project.

How should a carbon contribution budget link to the definition of an internal carbon price?

Assessing the quality of environmental projects funded is essential to ensure their effectiveness and long-term positive impact. The evaluation criteria must include not only the reduction of carbon emissions but also the co-benefits and sustainability of the project. Judging the quality of funded projects requires a holistic approach that goes beyond simply reducing carbon emissions. It is important to consider environmental and social co-benefits and the project's resilience to future climate challenges to ensure a lasting positive impact.

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