Report reveals flaws in corporate carbon offsets

Report reveals flaws in corporate carbon offsets

Corporate Offsets

A new analysis reveals that many major corporations, including some of the world’s biggest polluters, have relied on flawed carbon offset projects to meet climate goals. This suggests that their claims about reducing pollution may be exaggerated, according to a report by a non-profit watchdog group. The group analyzed the carbon offsets used by 50 top companies, including Delta, Gucci, ExxonMobil, and Nestlé. See below: Delta and Gucci actually did something worthwhile for the environment.

They found that for 33 of these corporations, over a third of their offsets came from “likely junk” projects, meaning they have fundamental issues that undermine their promised pollution cuts. For example, some projects, like large hydroelectric dams, would have happened anyway without the offset funding. Others simply shifted pollution elsewhere rather than truly reducing it, which is common with forestry projects.

The oil and gas industry was the biggest buyer of these questionable offsets. Many companies use these offsets as a key part of their climate action, allowing them to claim carbon neutrality while relying heavily on polluting energy sources. But if a large portion of these offsets are worthless, corporations have been significantly exaggerating their progress in cutting pollution.

Corporate claims under scrutiny

Climate experts say the voluntary carbon offset market has largely failed to drive real planetary benefits. Instead, it’s delayed the transition from polluting industries while sometimes harming forests and communities where offset projects are located, often in developing countries.

This research again shows that big corporate polluters claiming climate credentials are the primary buyers of junk credits,” said Erika Lennon, senior attorney at the Center for International Environmental Law. “But racking up carbon credits doesn’t make you a climate leader. Cutting fossil fuels does.

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We can’t offset our way to a safe climate future.”

Some companies have already started moving away from offsets after acknowledging the mounting evidence that they don’t reliably cut pollution. For instance, Delta shifted to investing in biofuels and more efficient aircraft, and Gucci has focused on absolute emissions cuts in its supply chain. While the Biden administration recently released guidelines to improve the offset market, critics argue stronger actions are needed.

The most effective solutions are to rapidly phase out polluting energy sources, protect forests, and transition to cleaner practices. Supporting policies that drive real pollution cuts, not just buying offsets, is essential to help make a significant difference in the long run.


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