Going up the ‘carbon neutral’ learning curve
Posted on October 1st, 2008By Saqib Rahim
Climatewire: When Fiji Water introduced its carbon-cutting plan last November, it was met with gasps — but not because of a lack of interest in climate-related issues.
It was because the company’s statement that its project would take it “beyond carbon neutral, to carbon negative” seemed too good to be true.
Fiji had promised to measure the carbon lifecycle for its bottled water, reducing emissions 25 percent by 2010. Along the way, it would switch half its energy needs to renewables. And it would purchase carbon offsets for at least 120 percent of whatever emissions remained.
The claim — that a company would not only do no harm, but have a negative carbon footprint — met resistance from sustainability-minded companies and environmental groups. Some said the company’s assertion pushed the bounds of credibility.
Fiji has stood by its plan, but other companies have taken note of the skeptical reaction. As the last two to three years have seen a slew of firms rushing to brand themselves as “carbon neutral,” more of them are seeing the audacity of that claim, and are reshaping their climate strategies to make promises they can more easily keep.
“We’re definitely not seeing as many companies moving toward carbon-neutral claims,” said Erin Meezan, director of sustainable development for Interface, an Atlanta-based carpet maker. “Carbon-neutral is not so easy as they thought it was.”
The trend started around 2003, when a wide range of companies, spanning food makers, airports, retailers and banks, jumped on the bandwagon with marketing campaigns declaring that they had zero or negative impact on climate.
The problem of indirect emissions
Corporate sustainability experts were skeptical. Many of these companies had little experience measuring carbon footprints, and they could not necessarily be trusted to include the complex array of emissions sources that are needed to make a complete accounting.
On top of that, the claims were usually backed by carbon offsets the companies bought voluntarily. Since it wasn’t possible for a company to truly eliminate emissions from every aspect of its business, from start to finish, the firm would purchase enough offset projects — planting trees, generating wind power or something else — until it could claim a zero-carbon profile.
That led to what Meezan called the “Fiji effect”: soon, the media and nonprofit observers were launching criticisms, too. Companies hoping to brand themselves carbon-neutral began to think twice. “Man, if these guys are going to get criticized, we don’t want to do anything like that,” Meezan said, describing the attitude shift.
The fundamental problem of claiming carbon neutrality, experts said, is this: A firm may buy enough offsets to cover the emissions it causes directly through factories, deliveries, commuting and so on. But most firms don’t account for “indirect” emissions that are caused by the people a company does business with.
Analysts refer to the different rings of responsibility as “scopes,” after a World Resources Institute paper that identified the various categories of emissions that come from a firm’s everyday business. The first scope includes emissions from sources controlled by the company — delivery trucks, plants, office buildings and the like. The second scope includes the indirect emissions from the electricity the company buys. Finally, the third scope, also indirect, includes the emissions caused by everyone else the company does business with, from airlines to miners to outsourced offices.
But even as companies front more conservative claims, observers said, a few leading companies are finding environmental progress without going all the way to zero carbon.
Buying wind power to offset the carbon used in making soy milk and butter
In 2003, WhiteWave Foods bought wind-power offsets for 100 percent of the electricity used to make its popular brand of soy milk, Silk. It did the same for Horizon Organic dairy products in 2005, and it offset electricity use for its corporate headquarters in 2006. Next year, it will add its Land O’Lakes and International Delight brands. But sustainability director Ellen Feeney said the company isn’t making any claims it can’t back up. “We don’t claim carbon neutrality,” she said.
Instead, she said WhiteWave will try to target its overall energy use, boost energy efficiency and continue popular programs such as “Silk Green Caps,” in which the company buys renewable energy offsets each time a customer enters a Silk universal product code number on the company Web site.
Bob Sheppard, corporate program director at the advocacy group Clean Air-Cool Planet, said more companies are similarly waking up to the difficulty of living up to the carbon-neutral claim. Instead of rushing to offset a company’s direct emissions instantly, he said, more companies are taking his advice: Think of carbon neutrality as a long-run goal. In the meantime, try to avoid causing emissions, reduce where possible, and replace high-carbon energy sources. Offsets, if needed, can be considered as a last resort.
But not all companies appreciate the complexities of declaring carbon neutrality, EcoSecurities’ Mark Trexler said. Only a few companies on the leading edge have survived the Fiji effect, he said, and they’re the ones that are more careful about how they use what he calls “the climate-neutral logo.”
“They’ve gone through the offset curve, they’ve gone through the climate-neutral curve, and now they’re realizing that’s not an endpoint,” he said.
Lurking in the details are ‘hairy questions’
Still, most companies approaching green marketing remain in the dark. “They don’t know much about offsets. They know almost nothing about climate neutrality, and they know less than nothing about that next set of issues,” Trexler said.
The concern, Trexler said, is that those businesses will get caught greenwashing, discrediting the concept of carbon neutrality with the public and discouraging other businesses from doing anything at all. Leading companies, he said, are “trying to be a lot more careful” to keep that from happening.
For example Interface, the carpet maker, has renounced carbon neutrality and is embarking on a more long-term approach.
Meezan, Interface’s sustainability director, said the company aims to squeeze carbon out of its whole operation by 2020. The company is already marketing products as carbon-neutral, including information about the products’ lifecycle assessments. But with so much emissions still occurring in its supply chain and transport network, Meezan said, Interface isn’t ready to declare the whole company zero-carbon. “Those are really still hairy questions for us,” she said.
Even though there is no standardized definition of “carbon neutral,” analysts say some conventions are emerging as accepted practice. One definition, Meezan said, is to be carbon neutral for Scopes 1 and 2 and for certain parts of Scope 3. Emissions from employee commuting, air travel, company fleets and some other sources — all Scope 3 — are very simple to calculate, using information companies already keep.
But as companies become more sophisticated in how they count emissions, EcoSecurities’ Trexler said, some may question whether certain businesses are fundamentally sustainable at all.