What's the Deal with Carbon Offsetting?

There's a strong sustainability bent to the travel policy at one U.K.-based industrial equipment manufacturer. The travel manager has negotiated carbon offsetting into its preferred agreements with Scandinavian Airlines and Lufthansa. But, "as a company, we are not doing carbon offsetting; we have to make sure we can lower our carbon emissions and footprint by changing our behavior," said the buyer, referring to the practice of measuring the carbon emissions produced by business travel and then contributing to an environmental or social program (they are often integrated) that works to 'compensate' for the amount of carbon released into the environment.  

The company's approach—to treat carbon offsets as an accessory to a strategic carbon reduction program, rather than as the main component—aligns with a growing understanding of how carbon offsetting needs to function in the full scope of emissions reduction efforts. Corporations committed to such efforts need to tidy up their business travel behaviors first and reduce emissions at the source, according to sustainability consultant Bernard Harrop. Only then should they look to offset the so-called 'residual' carbon still left. That could mean a committed effort to travel reductions, a committed transition to train travel for short-haul routes, a committed investment in sustainable aviation fuel with airline partners or other alliance groups working on that innovation.

Yet the reality is that even with these provisions, few travel programs will neutralize the carbon emissions associated with business travel. According to Salesforce sustainability VP Patrick Flynn, a layered approach is still required.

"With our climate strategy, we follow the mitigation hierarchy: reduce emissions, mitigate them and last, offset," he said. "The interesting thing that plays out—even as you pull the levers in order as hard as possible—is that you end up making achievement from the bottom [of that hierarchy] up." Salesforce has been offsetting its business travel and commuting emissions since 2019 but has recently moved toward a much more robust sustainable business travel strategy. (Read the Salesforce Progress Profile in this issue.) One reason for this, said Flynn, is that it has taken market innovation time to catch up to the relatively new demand urgency for carbon reduction and mitigation solutions.

A burgeoning market for sustainable airline fuel and nascent innovation in carbon sequestration technologies, which remove carbon from the air, are two ways corporations are investing in partnerships to help green up the travel industry, specifically, and the globe more broadly. United's recent Eco Skies Alliance, which will enable the airline to purchase 3.4 million gallons of SAF this year, is just one example in which the industry is working with corporate travel partners "to accelerate solutions for flying sustainably," said managing director for global environmental affairs and sustainability at United Airlines Lauren Riley. United has committed to going 100 percent green by 2050, without using carbon offsets. "I think we are the only airline worldwide whose strategy does not rely on carbon offsets," she added, "because they enable the status quo."

Offsets or Upsets?

Right now, however, Flynn said carbon offsets needn't be an upset for travel managers looking to build a comprehensive sustainability strategy for a corporate travel program. The key, he said, was to choose verifiable, high-quality offsetting programs that clearly do good work. While costs can vary tremendously, quality offsets may be expensive enough to make the user think twice about their budget before executing a trip that would trigger the additional expense. Also, he said, it's important to work toward a final state in which those offsets would be phased out over time as sustainability technologies and solutions catch up to industry requirements.

"It's reasonable to have pushback against carbon credits because they are so varied in terms of their quality," Flynn said, adding that any carbon credit solution should be verified through The Gold Standard or Verra's Verified Carbon Standard. "That would be table stakes," he said, citing the need for permanence of the project, additionality (i.e. the actions taken by the project are in addition to those that either naturally occur or are required by law to occur) and they produce no leakage (referring to the transfer of carbon use from one market to another by, for example, placing a premium on a certain fuel type that will simply be sourced in another market). He also emphasized that carbon offsetting programs can go farther than serving as a bridge to future good. "They should also have social co-benefits," to the community where they are performed—and those benefits happen now.

Harrop checked off projects with the latter in mind: "Offset projects include fuel efficient stoves in Africa, borehole projects in Uganda, ceramic water purifiers, environmental activity that adds value to where it's being done," he said.

Given that these types of projects are accessible, "it's important to follow 'and' strategies now," Flynn said. "Carbon credits are no substitute for any of the other work we need to do, but we need to take bold action today at the highest quality possible and [also] set in motion the medium- and longer-term shifts."

American Express Global Business Travel VP global sustainability Nora Lovell Marchant would agree. "We cannot offset our way out of this problem, reductions need to be the priority," she said. "But travel is a driving force for economic prosperity and GDP growth, so it will continue, and if you want to address the emissions associated with travel, the only thing you can do is offset them for now."

Travel managers should remain vigilant, however, and realize why there is still room for debate, even as quality improves for offsets and other alternatives begin to emerge. PredictX CEO Keesup Choe referred to what could be viewed as abusive use of carbon credits and lack of understanding about how far off the "future" can be for delivering results from certain carbon offsetting activities. "The misalignment of time scales is tragic," Choe said. "For the first 10 years, a solar farm is a contributor, not a reducer because of the cement, which is one of the biggest contributors to carbon [emissions]."

Because of what Choe describes as the murky world of offsets, some companies take matters into their own hands: In a recent webinar hosted by PredictX, panelist Hannah Arcaro, regional environmental manager for EMEA at UBS said that the bank preferred to invest directly in sustainability projects. 

If You Choose to Offset

Industry programs are becoming more available for travel managers who need to offset a portion of their program's carbon emissions. Amex GBT this year announced that it offset all its 2019 business travel emissions and would extend preferred offsetting terms with Carbonfund.org and Carbon Footprint to its clients, calling each offsetting project 'verified and validated' which reduces some of the onus on travel managers to do that research.

Advantage and WIN Global Travel Network have partnered with greentech company Thrust Carbon to provide clients with the wherewithal to calculate the carbon produced from their trip (air, hotel, ancillaries). The calculator uses detail in existing travel data environments such as aircraft type, passenger /freight ratios; 17 vehicle categories for car rental; regional and country specific standards in accommodation or serviced apartments; public transport to assess emissions and will recommend options to offset.

TripActions debuted a similar feature within its app earlier this month—real-time emissions calculations based on a choice of standards, combined with offsetting options that can be aligned with an organization's own charitable mission. Several other established and emerging providers are moving emissions data integrations in this direction as well. (Read more here.) 

Like the travel manager partnering with her preferred airlines to offset flight emissions after taking internal measures to reduce by changing behaviors, there are ways to use carbon offsetting tactics in the short term. Nearly 31 percent of travel managers tasked with travel sustainability are reaching for these solutions today, according to BTN's Sustainable Business Travel survey. But responsible usage requires a larger innovation strategy that will carry a travel program and the travel industry into a more sustainable future.