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Getting Offsetting Right: The Top 6 Questions To Steer Your Organisation to Success

May 30, 2023 | Insights,

Carbon offsets play a vital role in an organisation’s Net Zero pathway, as one step in a three-stage approach to managing emissions: avoiding unnecessary emissions, reducing what cannot be avoided, and offsetting what cannot be reduced.

This piece is the first in a series of thought leadership articles on specific topics within carbon offsetting, written by experts from Anthesis Group. In this piece we will explore six key questions to ask within your organisation, to ensure clarity around the value and benefits of offsetting, transparency around its authenticity, and its role as part of a Net Zero strategy.

1. What role does offsetting play in reaching Net Zero?

The climate crisis is a global, cross-industry challenge that requires transformative change and multiple solutions delivered in parallel. This is the ‘decisive decade’ as the time remaining to take impactful action is limited, and emissions reduction alone will not achieve the Paris Agreement goal of limiting global warming to 1.5°C.

In addition to a targeted approach to reduction, organisations can use carbon offsetting to account for the emissions they cannot yet reduce or avoid on their journeys to Net Zero. Climate projects can contribute to carbon reduction and capturing in the short term while removals are being developed for contribution in the longer term.

The latest IPCC report emphasises that emissions reduction alone will not be enough to affect the level of change required to remain within the 1.5C limit, stating:

Deep decarbonisation across all systems while building resilience will not be enough to achieve global climate goals, though. The IPCC finds that all pathways that limit warming to 1.5 degrees C (2.7 degrees F) — with no or limited overshoot — depend on some quantity of carbon removal. These approaches encompass both natural solutions, such as sequestering and storing carbon in trees and soil, as well as more nascent technologies that pull carbon dioxide directly from the air.”


The Oxford Principles for Net Zero-aligned Carbon Offsetting

  1. Prioritise the reduction of your own emissions first.
  2. When they become available over time, you can shift to offsets from projects that directly remove carbon or methane from the atmosphere and store them permanently.
  3. Shift to ‘long-lived storage’ projects which remove carbon from the atmosphere (almost) permanently.
  4. Support the development of a market for Net Zero-aligned offsets, the short and long-lived storage projects.


2. How does offsetting fit into your Net Zero strategy?

Offsetting should be the third of three stages in an organisation’s Net Zero strategy: avoidance, reduction, and offsetting. By investing in carbon offsets, companies take responsibility for their emissions while they continue to avoid and reduce. Compensating for emissions must take place alongside reduction; offsetting should not be used as an excuse to continue producing the same level of emissions.

According to the Science Based Targets initiative (SBTi), businesses should prioritise value chain emission reductions to achieve Net Zero, meaning that they should not only reduce their own emissions but also those from their suppliers, service providers, and other linked external parties. However, SBTi also explicitly states that “companies should go further and invest in mitigation outside their value chains now to contribute towards reaching societal Net Zero” – highlighting the need for both reduction and offsetting in the global economy’s alignment with 1.5°C.

The Oxford Principles for Net Zero-aligned carbon offsetting (the ‘Oxford Principles’) outline how offsetting needs to be approached to ensure it helps achieve a Net Zero society. These principles can be helpful to define what type of projects your organisation should consider and help to align work on credible offsetting around the world. They are based upon four elements for credible Net Zero-aligned offsetting developed by Oxford University.


sustainable development goals

3. What other areas does offsetting benefit, in addition to the climate?

Carbon offsets are aligned with and contribute to several Sustainable Development Goals (SDGs) – the blueprint for achieving a better and more sustainable future for all. Within climate projects, SDG 13 is the central focus point. SDG 13 focuses on taking urgent action to combat climate change and its effects. The projects which receive investment will support the reduction of CO2 emissions. An increasing number of companies are adopting the SDGs within their policy and strategy implementation, including investment in carbon credits.

Projects certified by Verra (VCS) and Gold Standard (GS) contribute to the SDGs. VCS is the most widely-used standard in CO2 reduction projects involving voluntary offsetting. Projects can have supplementary standards such as CCB, SD Vista and Social Carbon Standard, which certify the additional benefits for local communities, biodiversity, and ecosystems. Gold Standard has been developed by a group of NGOs under the auspices of WWF, with the aim of supporting projects that not only comply with the UN’s Clean Development Mechanism (CDM) but also offer a quantifiable contribution to sustainable development via various SDGs.

Offsetting with high-quality projects creates an impact that goes beyond the climate, such as biodiversity and prosperity. It is a means of contributing to a better world by funding environmental projects that benefit local communities and prevent nature loss.

For example, for a Ugandan woman, one of our cookstoves could mean that she no longer has to spend hours collecting firewood, and could give her time to find paid employment. A cookstove would also prevent her from inhaling the smoke regular fuel produces, causing health problems for her and her family. Carbon offsetting projects can help to empower women and offer life-changing opportunities.

We firmly believe in the power and necessity of offsetting when approached in the correct, strategic way, in conjunction with or after reduction, as this is the first and most crucial step to mitigate the effects of the climate crisis.

Find out more about our carbon offsetting offering


4. Why does offsetting sometimes experience negative press?

Recently, there have been a number of instances of negative press regarding the credibility of carbon offsets. This negative press has stemmed from questions around the calculation and benchmarking of the projects used in the past. At Anthesis, we fully support critical scrutiny of the authenticity and value of carbon offsetting, and transparency across the industry. All new insight gained as part of this additional scrutiny must be integrated into current and future methodologies, to ensure the maintenance of the highest possible standards; all compensation standards regularly revise their methodologies in this way.

Climate Neutral Group, part of Anthesis Group with 20+ years of experience in the complex and changing field of offsetting, is a founder and member of ICROA. We comply with the ICROA’s ‘Code of Best Practice.’ In addition to this, we also use extra quality criteria and an extensive due diligence procedure in the selection process for climate projects.

5. How can you be confident in the quality of carbon offsets?

The CO2 credits offered by Anthesis comply with the highest international standards set by trusted organisations such as the International Carbon Reduction Offset Alliance (ICROA). We guarantee that these credits contribute to a measurable reduction in carbon. Every credit represents a reduction of one ton of CO2 in the atmosphere. Our credits are verified by independent, internationally recognised agencies such as Gold Standard (GS) and Verra (VCS) which check whether our projects meet precisely defined standards. All of our projects are either GS or VCS certified.

A carbon credit should also meet the requirements set by ICROA, which stands for ensuring and accrediting best practices in carbon offsetting. This worldwide coalition is committed to creating a transparent and high-quality carbon offsetting market.

If you would like your product, service or organisation to become climate-neutral certified, you can opt for our Climate Neutral Certification Programme – the only existing climate neutrality programme globally, developed under ISEAL’s Code of Good Practice.

The owner of the programme, Climate Neutral Group, has been accepted formally as the first and only community member of ISEAL around the topic of climate. ISEAL supports ambitious sustainability systems and their partners to tackle the world’s most pressing challenges. Certifying your product, service or organisation as climate-neutral is the most logical step in your route to Net Zero.

6. What is the difference between offsetting and climate neutrality?

Carbon offsetting is compensating for part of your organisation’s remaining emissions. It means that your organisation is investing in projects that remove or reduce CO2 elsewhere.

In the past, climate neutrality was an accepted claim when talking about offsetting. This has now changed, owing to the shift towards prioritising reduction. There is also now emphasis on taking Scope 3 emissions into account: the result of activities from assets not owned or controlled by your own organisation but that you indirectly affect in your value chain – for example, business travel, purchased goods and services, and waste disposal.

In May 2023, the European Parliament voted to approve a text that would prohibit EU companies from relying solely on carbon credits when making sustainability claims – a drive largely welcomed by voluntary carbon market participants as a means of helping to improve transparency. As a result, if a company offsets a proportion of its carbon without taking its Scope 3 emissions into account and subsequently claims to be ‘climate neutral’, their actions will be seen as greenwashing and will not be accepted in the developments of claiming in regulations and directives.

Climate neutrality means that an organisation has undertaken specific steps in their climate strategy. First, they have measured their carbon emissions. Based on this measurement, they have then defined mandatory reductions which are reviewed annually. The next step in the process is that they offset the emissions that they cannot yet reduce. All of these steps are checked and verified by an independent auditor.

Start your offsetting journey with Anthesis

Our series of thought leadership pieces from our Anthesis and Climate Neutral Group experts will be going live over the coming weeks – keep an eye on our LinkedIn and Twitter to be the first to know when the next piece is live.

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