|
WHAT ARE CARBON OFFSETS?
A carbon offset is an investment in a project or activity that reduces greenhouse gas (GHG) emissions or sequesters carbon from the atmosphere that is used to compensate for GHG emissions from your own activities.
Businesses may seek to offset the emissions of:
 | their business as a whole; |
| specific activities such as air travel; or |
| Lifecycle emissions associated with a business product or service. |
Businesses can then purchase 'credits' from emission reduction or carbon sequestration activities occurring at another location to offset their calculated emissions. Carbon offset products most typically involve projects which invest in:
| forestry activities |
| energy efficiency projects |
| the avoidance of methane emissions |
Offsets are usually measured in tonnes of carbon dioxide equivalents, and can be sourced from a variety of projects that reduce or sequester emissions of one or more of the six key greenhouse gases:
WHAT ARE THE BUSINESS BENEFITS OF CARBON OFFSETS?
Companies are exploring carbon offsets in response to regulatory requirements as well as voluntary commitments.
On the regulatory side, offsets help companies cost-effectively achieve GHG reduction targets such as those which are required in the European Union Emissions Trading Scheme.
Australian companies may also have reduction targets in the future as part of an Australian Emissions Trading Scheme.
Offsets may be purchased voluntarily for a range of reasons, including:
| Meeting business goals to reduce greenhouse footprint as part of a carbon management strategy. |
| Preparing for an emissions trading scheme or other regulatory mechanisms, including gaining market experience. |
| Enhancing brands and/or differentiating products and/or services in the market |
| Attracting investors particularly in light of increasing awareness of risks associated with GHG emissions in carbon constrained future. |
| Engaging employees on environment issues. |
| 
>