Auden makes a connection here that too few CEOs and corporate communications teams understand, that "media, branding, and press, if not based on greenwashing, matters environmentally as much as it does financially." The first few "unicorn" leaders who boldly step out and are seen living change and aligning their personal values and business decisions will become THE media sources. Whenever anyone in the business or media space is asked "which companies are truly leading on climate" the only company that has come to mind for years is Patagonia. That’s not helpful. We need to see real action as the leadership social norm.
In my monitoring, identifying and amplifying of climate influence, it’s only when the CEOs and sustainability leaders themselves -distinct from corporate communications - are building social capital (engaging in productive discussion on social platforms) that they get on the media radar and have that climate action influence they seek.
To emphasize: When even a couple of these folks own the connection between their personal values and their business policies, they can shift leadership social norms, build more trust with all sorts of stakeholders and become THE people media want to interview and climate conferences must have on stage. The same old pledges and top 10 CEOs at ClimateWeek and COP from here on out just won’t do it. Watch Twitter and LinkedIn and see who engages actively and authentically there. These (still far too few) folks will become *the* representative voices of true, needle moving, climate action.
Great points reflected here. Two places I think warrant more attention (perhaps in future articles):
(1) The concept of carbon offsets does make sense and there are many examples where it works well. I think we need a way to recognize this and differentiate the good from the lazy, so as not to throw out the baby with the bathwater.
(2) The IRA is great, but companies and individuals need to use it and that requires time, expertise, and money brought to the table. I think we’re underestimating how much work is involved to reap the benefits, and therefore who will really take advantage.
Excellent points Auden about the need for companies to think differently about sustainability and prioritize flexing their political and cultural power to move the needle. Plus, as our research shows (carbonbankroll.com), many climate-conscious companies like Google, Microsoft, and Apple may not even know what their footprint is. For example, many are not even accounting for one of their largest sources of emissions - their cash and investments. In this case too, the point is clear: companies can do far more addressing climate change by leveraging their financial power to push banks to stop funding the climate crisis than they can by using their bankroll to buy offsets.
What’s notably about this piece is not the newness of the message - Auden and I have been delivering this message in a variety of forms and venues for well over a decade. What’s actually most notable is how little discussion and change has resulted, including with respect to corporate policy advocacy. What companies should be starting to internalize is that the only way to really bound the business risks of climate change is to mitigate climate change, and it’s very hard to translate even the best of intentions with regard to net-zero commitments and carbon offsets into material climate change mitigation. That requires policy.
While I agree that supporting the right policies is very important, along with not supporting the wrong ones, this article implies that what companies do themselves is distracting. Certainly the pursuit of net-zero via offsets is not getting us where we need to go. But lots of big and small companies are insetting (getting toward net-zero by adding up their own reduction of emissions or sequestration), and that’s how the power of business can head in the right direction. They need to eliminate fossil fuels from the business model, and insets are the right first steps.
So I’d argue that the title of this article, "False Promise," is clever but not accurate.
There is no substitute for reducing fossil fuel use directly by switching to electric vehicles, locating corporate offices in Leed-certified or pasive energy buildings, adopting other low- and no-carbon technologies, and using corporate power to get utilities to speed up a transformation to green energy.
The cap-and-trade (offset) system is an open invitation to creative accounting that let’s us pretend we are reducing carbon emissions when we aren’t. The myth of carbon-neutral biofuels is one such delusion.
Congratulations to Auden for writing such a cogent and persuasive article about this, which I plan to share with the Climate Action Academy email list. (I’m also EVP of Waterotor Energy Technologies, which is developing a technology that will convert a high percentage of the energy in slow-moving ocean currents and rivers into electricity and hydrogen.)
Part of my argument is that "insetting" or whatever you want to call it—essentially successful corporate carbon reduction—is simply business management. Becuase it’s voluntary, it is by no means a climate solution. Today, most business sustainability divisions do operational carbon reduction. They should be renamed "facilities management." And the goverment affairs department should be renamed "sustainability." Because the big change doesn’t happen by a few corporations voluntarily cutting their emissions. Thirty years into this experiment, I think we can say it’s not going to work. (Though much of the coversation is: we have to do it better! That’s absurd.)
A corrolary to this argument is the funadmental unknowableness of carbon footprints. Early in my career, I realized we had missed an entire sector of the company while calculating our footprint. What if we had been intentionally trying to cheat? Nobody would know. Paul Moinister’s work (above) shows just one of many ways footprints are only as good as your boundaries. Did you get scope three in there? How deep? scope 4? Banking? Did you miss stuff? Are you offsets regulated or voluntary, cheap or expensive? To me, this is both ineffective strategy and also huge brand risk. It’s too easy to dismantle the claims of any corporate carbon plan…and so if that’s all you got, you’re going to get outed. But if your CEO has written an op ed for the Wall Street Journal supporting more climate action, you have a defensible position.
Excellent commentary from my colleague Auden Schendler. A sustainable business strategy without a robust public affairs strategy moving beyond sign-on letters is essential to making meaningful change. Having said that I’m struck by the continued use of net-zero and carbon neutrality interchangeably. Very different strategies. While neutrality is a flimsy term SBTI’s net-zero standard goes a long way toward addressing these challenges though like anything it’s not perfect.
This article sheds light on the fundamental flaws of forestry based offsets however I don’t think it would be fair to torpedo the potential for the offset market overall.
At the end of the day quibbling over which offsets meet a purity test and which don’t are a distraction from the real work that is necessary both in the halls of Congress and in the manufacturing plants, distribution centers and banks that power our economy.
Unfortunately, shame and potential harm to brand may not be enough. 35 years ago, the corporate world tried to address Ethics and Compliance issues with voluntary measures. Some companies led the way and contributed to the growth of an ethos of moral and legal responsibility. But the voluntary system was insufficient. Too many companies adopted the view of Callicles (https://en.wikipedia.org/wiki/Callicles) and Thrasymachus (https://en.wikipedia.org/wiki/Thrasymachus): Doing right voluntarily is for chumps. (It takes only a few, perhaps no more than 10%.)
So, now we have a web of laws that require compliance with responsibility laws and are enforced by the department of justice.
Something similar may be required to achieve net zero throughout the corporate world. The Ethics and Compliance experience teaches that voluntarists eventually insist on laws that apply to all.
Critiquing corporations for not having re-created capitalism has us chasing our tails. Many different strategies are simultaneously necessary, and not one that I can think of is sufficient.
In my own work, I find heartening creativity and commitment from sustainability professionals, many of whom move among companies, NGOs, and development organizations. These jobs attract wonderful people who are on a continuous learning curve that includes technical, strategic, and relationship skills.
We’re all constrained within the parameters of our jobs, but many early career people in this field push against those boundaries and support one another to cultivate a larger vision of an economy that is healthy for its social and natural context. Criticism is healthy. So is celebration.
If serving as exhibit ‘A’ here helps advance the discussion and get more people to buy into the idea that climate policy matters, push for it, and pray that it comes around soon enough, then we’re delighted to play that role. Even if it means the success of such policy proves us to have been idiotic. But as someone who watched from courtside seats while last decade’s promised climate policies shriveled overnight, I can’t understand the view that it’s all or nothing, this vs. that, policy vs. voluntary action. That for one effort to fly, all others must be shredded. Any single bet is a poor choice, and no single outcome will be enough, especially at this late stage in the climate fight. The good news is plenty of people that we work with seem ready and able to hold more than one goal in their heads at once.
I’d argue that corporates have an opportunity to play a more catalytic role in the climate fight beyond merely policy advocacy, by purchasing permanent carbon removals.
Policies like the IRA are crafted with ambitious intent driven by science. However, in the sausage making that is the US congress means some of the key parts which really matter can get left out. Scientific modeling that holds temperatures to 1.5degC include much more permanent carbon removals than we are on pace to deliver. This animation is striking: https://twitter.com/hausfath/status/1585672923154509825
Real policy advocacy, sound facility management/sustainability insetting, and protection of natural carbon sinks such as mangroves are all good to do. The voluntary carbon market (which studies have shown mostly only includes ineffectual credits: https://www.motherjones.com/politics/2022/10/why-ambitious-tree-planting-and-carbon-offset-projects-are-failing) was ~$2 Billion in 2021 while the profits of the Fortune 500 alone were $2 Trillion in 2021. All of those sound facility management practices are already included in the profits number and as you can see the carbon credit market is teeny compared to profits!
Corporates can avoid future economic shocks and compliance costs climate action by purchasing permanent removals right now.
For an example, Shopify has has committed $32M (as of March 2022) to permanent removals purchasing. The Head of Shopify’s sustainability work explained the expense this way; if Shopify is going to be able to have customers in the future it’s worth spending millions today. This spend will help us get removals capacity to the level which scientists say we need to be available in 2050. https://www.shopify.com/blog/carbon-removal-market-update-2022
Corporate carbon neutrality is the concept that a corporation can balance its carbon emissions with an equivalent amount of carbon offsets or credits. It is often touted as an effective way of reducing a company’s environmental impact, but the reality is that it is a false promise. Carbon neutrality is often used as a marketing tool to make a company look environmentally friendly, but it does not lead to any real reductions in emissions. https://balancedearth.org/
Another issue with carbon neutrality is that it does not address the root cause of emissions. It does not encourage companies to reduce their emissions but merely allows them to pay for the privilege of continuing to emit. Companies may be able to achieve carbon neutrality and still emit the same amount of emissions as before, which does nothing to reduce their environmental impact.
COMMENTS
BY Andrew Jones
ON October 4, 2022 11:55 AM
Schendler nails it here - offsets are at best distracting and at worst counter-productive.
BY Andrea Learned
ON October 5, 2022 08:32 AM
Auden makes a connection here that too few CEOs and corporate communications teams understand, that "media, branding, and press, if not based on greenwashing, matters environmentally as much as it does financially." The first few "unicorn" leaders who boldly step out and are seen living change and aligning their personal values and business decisions will become THE media sources. Whenever anyone in the business or media space is asked "which companies are truly leading on climate" the only company that has come to mind for years is Patagonia. That’s not helpful. We need to see real action as the leadership social norm.
In my monitoring, identifying and amplifying of climate influence, it’s only when the CEOs and sustainability leaders themselves -distinct from corporate communications - are building social capital (engaging in productive discussion on social platforms) that they get on the media radar and have that climate action influence they seek.
To emphasize: When even a couple of these folks own the connection between their personal values and their business policies, they can shift leadership social norms, build more trust with all sorts of stakeholders and become THE people media want to interview and climate conferences must have on stage. The same old pledges and top 10 CEOs at ClimateWeek and COP from here on out just won’t do it. Watch Twitter and LinkedIn and see who engages actively and authentically there. These (still far too few) folks will become *the* representative voices of true, needle moving, climate action.
BY Colleen Webster
ON October 5, 2022 11:06 AM
Great points reflected here. Two places I think warrant more attention (perhaps in future articles):
(1) The concept of carbon offsets does make sense and there are many examples where it works well. I think we need a way to recognize this and differentiate the good from the lazy, so as not to throw out the baby with the bathwater.
(2) The IRA is great, but companies and individuals need to use it and that requires time, expertise, and money brought to the table. I think we’re underestimating how much work is involved to reap the benefits, and therefore who will really take advantage.
BY Brian Lanahan
ON October 5, 2022 02:30 PM
Thanks for giving voice to what so many of us in this field know in our bones but haven’t had words for. Bravo!
BY Paul Moinester
ON October 5, 2022 03:27 PM
Excellent points Auden about the need for companies to think differently about sustainability and prioritize flexing their political and cultural power to move the needle. Plus, as our research shows (carbonbankroll.com), many climate-conscious companies like Google, Microsoft, and Apple may not even know what their footprint is. For example, many are not even accounting for one of their largest sources of emissions - their cash and investments. In this case too, the point is clear: companies can do far more addressing climate change by leveraging their financial power to push banks to stop funding the climate crisis than they can by using their bankroll to buy offsets.
BY Mark Trexler
ON October 6, 2022 10:22 AM
What’s notably about this piece is not the newness of the message - Auden and I have been delivering this message in a variety of forms and venues for well over a decade. What’s actually most notable is how little discussion and change has resulted, including with respect to corporate policy advocacy. What companies should be starting to internalize is that the only way to really bound the business risks of climate change is to mitigate climate change, and it’s very hard to translate even the best of intentions with regard to net-zero commitments and carbon offsets into material climate change mitigation. That requires policy.
BY Hal Hamilton
ON October 6, 2022 10:52 AM
While I agree that supporting the right policies is very important, along with not supporting the wrong ones, this article implies that what companies do themselves is distracting. Certainly the pursuit of net-zero via offsets is not getting us where we need to go. But lots of big and small companies are insetting (getting toward net-zero by adding up their own reduction of emissions or sequestration), and that’s how the power of business can head in the right direction. They need to eliminate fossil fuels from the business model, and insets are the right first steps.
So I’d argue that the title of this article, "False Promise," is clever but not accurate.
BY Dr. Michael Palmer
ON October 7, 2022 04:17 AM
There is no substitute for reducing fossil fuel use directly by switching to electric vehicles, locating corporate offices in Leed-certified or pasive energy buildings, adopting other low- and no-carbon technologies, and using corporate power to get utilities to speed up a transformation to green energy.
The cap-and-trade (offset) system is an open invitation to creative accounting that let’s us pretend we are reducing carbon emissions when we aren’t. The myth of carbon-neutral biofuels is one such delusion.
Congratulations to Auden for writing such a cogent and persuasive article about this, which I plan to share with the Climate Action Academy email list. (I’m also EVP of Waterotor Energy Technologies, which is developing a technology that will convert a high percentage of the energy in slow-moving ocean currents and rivers into electricity and hydrogen.)
BY Auden Schendler
ON October 7, 2022 09:33 AM
Part of my argument is that "insetting" or whatever you want to call it—essentially successful corporate carbon reduction—is simply business management. Becuase it’s voluntary, it is by no means a climate solution. Today, most business sustainability divisions do operational carbon reduction. They should be renamed "facilities management." And the goverment affairs department should be renamed "sustainability." Because the big change doesn’t happen by a few corporations voluntarily cutting their emissions. Thirty years into this experiment, I think we can say it’s not going to work. (Though much of the coversation is: we have to do it better! That’s absurd.)
A corrolary to this argument is the funadmental unknowableness of carbon footprints. Early in my career, I realized we had missed an entire sector of the company while calculating our footprint. What if we had been intentionally trying to cheat? Nobody would know. Paul Moinister’s work (above) shows just one of many ways footprints are only as good as your boundaries. Did you get scope three in there? How deep? scope 4? Banking? Did you miss stuff? Are you offsets regulated or voluntary, cheap or expensive? To me, this is both ineffective strategy and also huge brand risk. It’s too easy to dismantle the claims of any corporate carbon plan…and so if that’s all you got, you’re going to get outed. But if your CEO has written an op ed for the Wall Street Journal supporting more climate action, you have a defensible position.
BY Matthew Hamilton
ON October 9, 2022 06:12 PM
Excellent commentary from my colleague Auden Schendler. A sustainable business strategy without a robust public affairs strategy moving beyond sign-on letters is essential to making meaningful change. Having said that I’m struck by the continued use of net-zero and carbon neutrality interchangeably. Very different strategies. While neutrality is a flimsy term SBTI’s net-zero standard goes a long way toward addressing these challenges though like anything it’s not perfect.
This article sheds light on the fundamental flaws of forestry based offsets however I don’t think it would be fair to torpedo the potential for the offset market overall.
At the end of the day quibbling over which offsets meet a purity test and which don’t are a distraction from the real work that is necessary both in the halls of Congress and in the manufacturing plants, distribution centers and banks that power our economy.
BY Dr. Michael Palmer
ON October 12, 2022 07:08 AM
Unfortunately, shame and potential harm to brand may not be enough. 35 years ago, the corporate world tried to address Ethics and Compliance issues with voluntary measures. Some companies led the way and contributed to the growth of an ethos of moral and legal responsibility. But the voluntary system was insufficient. Too many companies adopted the view of Callicles (https://en.wikipedia.org/wiki/Callicles) and Thrasymachus (https://en.wikipedia.org/wiki/Thrasymachus): Doing right voluntarily is for chumps. (It takes only a few, perhaps no more than 10%.)
So, now we have a web of laws that require compliance with responsibility laws and are enforced by the department of justice.
Something similar may be required to achieve net zero throughout the corporate world. The Ethics and Compliance experience teaches that voluntarists eventually insist on laws that apply to all.
BY Hal Hamilton
ON October 12, 2022 07:10 AM
Critiquing corporations for not having re-created capitalism has us chasing our tails. Many different strategies are simultaneously necessary, and not one that I can think of is sufficient.
In my own work, I find heartening creativity and commitment from sustainability professionals, many of whom move among companies, NGOs, and development organizations. These jobs attract wonderful people who are on a continuous learning curve that includes technical, strategic, and relationship skills.
We’re all constrained within the parameters of our jobs, but many early career people in this field push against those boundaries and support one another to cultivate a larger vision of an economy that is healthy for its social and natural context. Criticism is healthy. So is celebration.
BY Austin Whitman
ON October 17, 2022 07:33 PM
If serving as exhibit ‘A’ here helps advance the discussion and get more people to buy into the idea that climate policy matters, push for it, and pray that it comes around soon enough, then we’re delighted to play that role. Even if it means the success of such policy proves us to have been idiotic. But as someone who watched from courtside seats while last decade’s promised climate policies shriveled overnight, I can’t understand the view that it’s all or nothing, this vs. that, policy vs. voluntary action. That for one effort to fly, all others must be shredded. Any single bet is a poor choice, and no single outcome will be enough, especially at this late stage in the climate fight. The good news is plenty of people that we work with seem ready and able to hold more than one goal in their heads at once.
- Austin Whitman, CEO, Climate Neutral
BY Harris Cohn
ON November 2, 2022 05:46 PM
Lots of wholesome debate here!
I’d argue that corporates have an opportunity to play a more catalytic role in the climate fight beyond merely policy advocacy, by purchasing permanent carbon removals.
Policies like the IRA are crafted with ambitious intent driven by science. However, in the sausage making that is the US congress means some of the key parts which really matter can get left out. Scientific modeling that holds temperatures to 1.5degC include much more permanent carbon removals than we are on pace to deliver. This animation is striking: https://twitter.com/hausfath/status/1585672923154509825
Real policy advocacy, sound facility management/sustainability insetting, and protection of natural carbon sinks such as mangroves are all good to do. The voluntary carbon market (which studies have shown mostly only includes ineffectual credits: https://www.motherjones.com/politics/2022/10/why-ambitious-tree-planting-and-carbon-offset-projects-are-failing) was ~$2 Billion in 2021 while the profits of the Fortune 500 alone were $2 Trillion in 2021. All of those sound facility management practices are already included in the profits number and as you can see the carbon credit market is teeny compared to profits!
Corporates can avoid future economic shocks and compliance costs climate action by purchasing permanent removals right now.
For an example, Shopify has has committed $32M (as of March 2022) to permanent removals purchasing. The Head of Shopify’s sustainability work explained the expense this way; if Shopify is going to be able to have customers in the future it’s worth spending millions today. This spend will help us get removals capacity to the level which scientists say we need to be available in 2050. https://www.shopify.com/blog/carbon-removal-market-update-2022
Grateful this discussion is even happening,
-Harris Cohn, Charm Industrial
BY Sam Wikki
ON December 7, 2022 10:52 PM
Such an amazing discussion here!
Corporate carbon neutrality is the concept that a corporation can balance its carbon emissions with an equivalent amount of carbon offsets or credits. It is often touted as an effective way of reducing a company’s environmental impact, but the reality is that it is a false promise. Carbon neutrality is often used as a marketing tool to make a company look environmentally friendly, but it does not lead to any real reductions in emissions. https://balancedearth.org/
Another issue with carbon neutrality is that it does not address the root cause of emissions. It does not encourage companies to reduce their emissions but merely allows them to pay for the privilege of continuing to emit. Companies may be able to achieve carbon neutrality and still emit the same amount of emissions as before, which does nothing to reduce their environmental impact.
BY Vivid Kreations
ON June 11, 2025 02:22 AM
This article brilliantly exposes carbon neutrality’s flaws. It strongly advocates for real, systemic action over misleading offsets. A crucial read!