How this helps your business
Keep having an impact even when you can’t reduce emissions any further: There are some emissions sources that you simply don’t have direct control over, like those caused by your suppliers. If you have done everything you can, but these emissions are still holding up your decarbonising progress, offsetting might help.
Brand and reputation. Supporting projects which help restore the environment is a big win for your brand, particularly if they are local.
Is this right for you?
Offsets can be useful for businesses which:
Have already done all they can to reduce emissions they directly control, but don’t want to stop there.
Want to have a positive impact beyond the scope of business operations.
Wish to manage risk of greenwashing claims
Are seeking alignment with B Corp or SBTi requirements, staff and customer trust.
Less impact if:
You haven’t already done all you can to reduce your emissions before considering offsetting.
How to approach offsetting
Offsetting is easy: you simply pay for offsets for however much carbon dioxide you want to balance. Or so the offsetting industry would have you believe, and there are any number of companies online which will sell you offsets. But the quality of offsets varies from effective to actively harmful to the environment. Telling the difference between good and bad offset projects is difficult, time-consuming, and unreliable. Both offset providers and verification agencies have been beset by scandal in recent years, undermining confidence in the whole process and reducing funding for both good projects and bad.
What do I need to do?
Our advice is simple: don’t rely on carbon offsetting.
✅Focus first on reducing your emissions as much as you reasonably can. After that, if you want to contribute to environmental or social impact, choose a project or charity that aligns with your values as a business and support it because you believe in the positive change it delivers, not because it cancels out your carbon footprint. It might be an offsetting project that generates credits, or a local community project, a conservation group, an environmental charity, or any organisation working in a way that resonates with your business and your people.
✅Find something that feels meaningful, get to know the people behind it, and support them in a sustained and thoughtful way. You’ll create genuine positive impact, without focusing on claiming that it reduces or neutralises your own emissions.If you do choose a formal offsetting project , the table below shows you what to look out for. Most offset websites give you some information about the projects they support.
To be effective, offsets must fulfil the following criteria:
Criteria | Description |
Additionality | Additionality means offsetting activity wouldn’t have happened without the incentive provided by selling carbon credits. An example of where this is not the case is those schemes where credits have been sold to protect forests from logging, where logging would have been illegal anyway because the forest was in a National Park. |
Permanence | Will the carbon stay stored for a meaningfully long time (e.g. 1,000 years)? Some offset projects don’t manage this. For example, large areas of forests in the US that were used as carbon offsets have later burned down in wildfires. When that happens, all the carbon they were supposed to store goes straight back into the atmosphere. |
Leakage | Leakage refers to a carbon offset project that may inadvertently result in greater emissions elsewhere. Examples include:
|
Double-counting | Double-counting is when two separate entities are sold the same carbon credit. Buying carbon credits that are verified by an independent third-party verifier should prevent this. |
Actuality | Actuality means the carbon‑saving activity has already happened: it’s not something that might happen in the future. If your business emits a tonne of CO₂ this year, you can’t “make it disappear” by buying an offset that will only deliver its carbon benefit many years from now.
This is a common issue with tree‑planting and some biochar projects. The credits are often sold before the trees have grown or the carbon has actually been locked away. So the emissions are immediate, but the supposed “offset” happens much later, which means it doesn’t genuinely balance anything out. |
Common Mistakes to Avoid
❌ Offsetting opportunities that tick all the boxes so they actually work are expensive. If you have any opportunities to reduce your emissions directly, it’s usually cost-effective to do so, before you start thinking about offsetting.
❌ If you are following the Science Based Target framework, you can only use offsets once you have reduced your own emissions by at least 90% from your baseline year. You can’t use offsets to reduce your own emissions.
❌ Don’t think that you can trust offsetting providers or verification agencies. Projects that qualify for these and other standards do not necessarily fulfil the requirements for effective offsetting.
Cost and Effort
Supporting a good cause aligned to your values:
Cost:
Up to you.
Effort:
None. It’s a pleasure. It might take you an hour or so to identify a good local initiative.
Formal carbon offsetting:
Cost:
Depends on how much you want to offset, but budget for at least £200/tonne. (Be sure to compare this to how much it would cost you to reduce your own emissions instead.)
Effort:
Considerable research is required to establish offset projects that are reliable.
Conclusion
Carbon offsets are not the panacea they may seem to be (and they are advertised to be). If you want to buy effective offsets, you’re generally better off investing in reducing your own emissions. If you want to do something beyond that, by all means support a good cause, but be aware it doesn’t reduce your own climate impact.
Find out more in Sage University's Reducing Carbon Emissions courses: