The Necessary Shift Toward Climate Resilience
For years, companies have been investing heavily in carbon offsets, aiming to offset their continued greenhouse gas emissions by funding projects that promise to reduce emissions elsewhere. This strategy, while well-intentioned, has faced significant criticism. Many Carbon Offset projects have failed to deliver the promised environmental benefits, with some even causing unintended harm. As the realities of climate change become increasingly apparent outside our window, it is time for companies to re-evaluate their climate action strategies. Instead of relying on the uncertain benefits of Carbon Offsets, businesses should prioritize direct investments in climate change mitigation and resilience.
The allure of Carbon Offsets lies in their simplicity. They offer a seemingly straightforward way for companies to achieve carbon neutrality without altering their core operations; at their extreme they allow known polluters to continue on with business as usual. By funding projects such as reforestation, renewable energy, or methane capture, firms can claim to offset their emissions. However, the efficacy of these projects is often questionable. The market for carbon offsets - currently $300B annually - has been plagued by issues of verification and additionality—ensuring that the reductions are real, measurable, and would not have happened without the offset funding. Furthermore, the permanence of these reductions is not always guaranteed. Forests planted as part of offset schemes, for example, can be destroyed by fires or logging, releasing the stored carbon back into the atmosphere.
The focus on offsets also diverts attention and resources from more substantive actions that companies could take. By investing in climate change mitigation and resilience, firms can address the effects of global warming on the communities where their employees and customers live and work. Mitigation involves efforts to reduce or prevent the emission of greenhouse gases, while adaptation focuses on adjusting to the inevitable impacts of a changing climate.
Mitigation efforts can take many forms, including improving energy efficiency, transitioning to renewable energy, and developing low-carbon products and services. These initiatives not only reduce a company's carbon footprint but also often result in cost savings and new business opportunities. For instance, companies that invest in renewable energy can shield themselves from volatile fossil fuel prices and potential carbon taxes. Moreover, developing low-carbon technologies can open up new markets and revenue streams.
But mitigation investments will only have a small impact on actual CO2 reduction efforts. In fact the data show that despite all of these combined efforts - CO2 levels continue to rise.
As Fox Weather reported, CO2 levels have hit a record-high weekly average at the Mauna Loa observation station, according to NOAA. We have more solar energy than ever before - CO2 levels continue to rise. We have more wind energy than ever before - CO2 levels continue to rise. We have more EVs and battery storage capacity than ever before - CO2 levels continue to rise.
Why? Because just 57 companies are linked to 80% of greenhouse gas emissions since 2016. They each have a significant profit motive to not invest in real emission reduction (i.e. elimination of CO2 altogether), rather than invest their money on securing the favor of just enough politicians.
In addition to mitigation, investing in resilience is becoming increasingly crucial. As extreme weather events become more frequent and severe, companies need to protect their operations, supply chains, and assets. This can involve measures such as reinforcing infrastructure, diversifying supply sources, and implementing advanced risk management strategies. By building resilience, companies can reduce the risk of costly disruptions and demonstrate their commitment to long-term sustainability.
The case for shifting focus from Carbon Offsets to direct climate action is also supported by growing investor and consumer demand for genuine sustainability. Stakeholders are increasingly skeptical of companies that rely heavily on initiatives they know don’t deliver an ROI. Greenwashing is damaging brand reputation as it erodes trust. In contrast, genuine efforts to build resilience can enhance a company's brand, attract environmentally conscious consumers, and satisfy investors who prioritize environmental, social, and governance (ESG) criteria.
Read: Inconvenient truths about sustainability
Carbon Offsets and investments in mitigation will not bend the global CO2 curve back towards livable until the polluters get on board (for their own children’s sake we hope its soon). In the meantime, severe weather is bankrupting communities and homeowners. Efforts to recover losses from the polluters is laudable but will take decades and hundreds of millions of dollars in legal fees.
This generation and the next require resilience.
