By Reed Shapiro
I write this article with a few thoughts in mind:
- * It seems we’ve got about a decade to stave off irreversible radical change to our climate by the time I die (provided I live to retirement);
- * Report after report shows we’re not cutting that gap fast enough;
- * The way corporate money gets spent at large is often guesswork and at times farcical;
- * These expenditures leave significant amounts of both economic and material waste;
- * That waste does nothing but either go to waste, indulgence, or downright loss on the balance sheet;
- * Couldn’t some of that fat get trimmed and put to better use?
Real Action Falls into the Budget Abyss
“Our company just isn’t going to spend money on that,”
Is something I’ve heard more than a few times when trying to incite investment into emissions reduction projects. At face value, it’s an understandable quip with carbon offsets. Why would a company pay someone else to reduce emissions externally, when doing so internally can help reduce costs and increase profitability?
Fair enough—if it actually happens.
However, when reports, like this one come out, detailing that no company making 2020 zero-deforestation commitments between the mid 2000’s to 2010’s is anywhere close to hitting the mark, one begins to wonder if this is really a legitimate qualm with offsetting, or a simple distraction or cop-out. If you can put your hands and hard work (as opposed to just your money) where your mouth is and actually move the dial in a meaningful way at home, more power to you. But as deforestation accelerates around the world (as shown in the trendline below), one is left wondering did that money really went, and what good was really done.
The idea that it isn’t economically feasible to pursue more than one initiative to reduce emissions at a time is a false choice. Offsets often lose out in the battle for priority investments (renewable energy, planting trees, energy efficiency, etc.) at companies. Yet after working with partners and clients through this issue over the years, this mislead, or simply underinformed or uninspired point of view has, and can continue to be overcome.
The well-known truth is that within major corporate budgets, there lies a lot of fat and ill-incentive. Perform well one year, budget for overperformance again the next year, get fired for budgeting too much against actual costs. A case in this article illustrates well how simple assumptions can leave companies undersupplied when a rush of business comes in, or with total excess of inventory, personnel, or expense in general. Companies cannot stomach not having enough (of whatever it is they sell), so excess is the default, often leading to no further benefit.
So, a lingering majority of businesses are not spending money on offsets. At the same time, a considerable amount of cash excesses is lost to dynamics driving artificial inflation of budgeted fixed costs, and wasteful discretionary spending. All the while, firms skipping out on pledged commitments.
Stopping the Freefall Towards More Waste
The good news is that these companies employ humans, and there is a growing number of humans who are concerned about our future with regard to staving off the worst of a changing climate. Not only are many people concerned with what’s to come, a growing number are taking matters into their own hands. Over the past few years both at Carbon Credit Capital and throughout the Bard MBA in Sustainability, I’ve gotten a chance to meet with and consult for major global brands ranging from apparel, to food and beverage, to financial services. One theme has been clear: employees are looking for ways to reduce their collective impacts at work, beyond traditional volunteerism. Some of these acquaintances have, upon learning about carbon offsets, indeed purchased some for themselves for personal trips, or for their annual commutes.
These have been small drops in the bucket—just about a millionth of a percent of total global emissions. However, they have highlighted a real reality: people are taking part of either their hard-earned salaries or diverting their discretionary budgets towards reducing emissions on their own time and dime.
What Does Vigilante Offsetting Really Do if it’s so Minuscule? Add it Up
How much impact could something like this possibly have at the end of the day? Two governing bodies who have set some of the highest qualification standards for generating carbon credits have done research to show the economic value provided to local project stakeholders, and in what ways the purchase positively affects their lives.
For anywhere from around $5 to $15 invested in one credit from a well-selected project can deliver up to $465 of socio-economic benefit for the towns, families, cities, regions in which the project is undertaken—a multiple of 30-90X. Get just 10,000 people working with any sort of budgetary discretion in companies around the world to skip on business class, or pick the strip over the filet—literally curb expenses by a taxi cab fare— and purchase a credit in this price range , you generate anywhere from $200,000, to $4.65 million dollars. Those dollars go, as detailed below, to better educations, job opportunities, livelihoods, and overall economic and social development in the areas of the world that hang in the balance of climate disruption, and from which the global financial system extracts significant portions of its value.
So, whether you’ve never heard of carbon credits, or whether you’re an IT manager or a mechanical engineer—anyone who would never touch offsets because they’re not a sustainability procurement professional at a major corporation—this one’s for you. If you are a member of the 72% of Americans concerned about what’s to come in the next decade and beyond, and you occupy a position of relative power over expenses, and your workplace is not adequately addressing your concerns, you are not hostage.
Use your power to drive these positive outcomes where it doesn’t jeopardize the success of your business units. If enough employees at various companies with high staff counts take this fairly passive action, potentially significant chunks of that firms total emissions can get mitigated on an annual basis. The “we don’t have the money,” or “our focus has to be elsewhere” arguments get put to rest. The dial actually gets moved, albeit slowly, but steadily. And the glutenous fat trimmed from corporate expenditures can germinate, not cardiovascular disease, but legitimate, verifiable, repeatable positive impact on the world around us that needs it so.