Carbon offsets could play a key role in net zero but companies lack trust in reporting and validation methods.
Carbon offsets are being shunned by chief sustainability officers (CSO’s )with 41 per cent rejecting their use due to trust issues and an additional 43 per cent seeking assurance from rating agencies for validation.
That’s according to a new report, ‘Carbon Offsetting in 2023’ by AiDash, that found a lack of uniformity in carbon credit certification methods is raising doubts on accuracy and comparability of sustainability measurement. CSOs are held back by data incompatibilities with 89 per cent using KPI metrics to track progress but the top three challenges to meeting net zero are all data-led.
The majority of businesses will struggle to meet net-zero goals without the use of carbon credits, but a lack of trust in the tool is stalling uptake and pushing corporate net-zero plans off track. This is one of the striking findings from a global survey of over 500 senior sustainability officers that shows sustainability and carbon management are now mainstream concerns, with 97 per cent of businesses including them in investment decisions.
79 per cent of CSO’s are already accountable to their boards or the public, 98 per cent are doing more than legally required to reduce emissions and 56 per cent of businesses are committed to net-zero targets on or before 2030.
However, over half of businesses (56 per cent) do not have operational control over the majority of their greenhouse gas (GHG) emissions and nearly half (43 per cent) use carbon offsets for hard-to-reduce GHG emissions alongside direct measures. As a result, many businesses cannot meet net-zero targets without the use of carbon credits.
Despite this critical need, the survey revealed a major lack of trust in carbon offsetting, with 41 per cent of CSO’s stating they do not use carbon credits as they do not adequately trust them. This comes at a time when many carbon offsetting projects are being shown to be inconsistently measured, inadequately monitored, and frequently failing to prove they are based on additional carbon captured.
Another revelation is inconsistency in validation methods for carbon credits. Four per cent do not validate credits at all, 35 per cent only buy from government or voluntary certified schemes, 43 per cent are exploring working with credit rating agencies, 35 per cent undertake their own validation or third-party due diligence and 41 per cent use a combination of these methods. This lack of uniformity raises doubts surrounding the accuracy and comparability of corporate sustainability measurements.
“Rather than waiting for governments to agree to regional or global frameworks, businesses are forging forward independently, making ambitious environmental commitments,” said Abhishek Vinod Singh, CEO, AiDash a provider of vegetation management, satellite and AI-powered operations, maintenance, and sustainability solutions.
“The intent and action is there but what these businesses desperately need is an organisational tool they can trust to accurately measure, monitor, track and validate the progress of their sustainability plans on their journey to net-zero.”