CLIMATE-NEUTRAL COMPANY

Successful reduction in global emissions will largely depend on voluntary and consistent action by the industrial sector in developed countries. This is because the pledges made by individual countries will not be enough to achieve the 1.5 degree target enshrined in the Paris Climate Agreement. Companies produce vast quantities of greenhouse gases as they go about their business – for instance in the production and transport of goods and merchandise, business travel, and in electricity and heat consumption. Voluntary offsetting of generated emissions makes an important contribution to achieving the government, EU and United Nations climate goals and raises awareness among employees, suppliers and customers about the consumption of finite resources.

Offsetting means balancing out. In regard to CO₂ or greenhouse gas emissions (so also methane, nitrous oxide, fluorinated greenhouse gases, hydrogen-containing fluorocarbons, perfluorinated hydrocarbons, sulphur hexafluoride and nitrogen trifluoride), this is achieved by purchasing and then retiring corresponding carbon credits. These credits are emission credits generated within the framework of an internationally recognised carbon offset project, each of which represents one tonne of additional emissions that have been sequestered or saved. Given that it is the total volume of greenhouse gases in the atmosphere that affects the climate and not where they are produced, the Clean Development Mechanism (CDM) concept enshrined in the Kyoto Protocol permits the purchase of high-quality carbon credits to offset unavoidable emissions as an additional measure alongside avoidance and reduction.

A carbon credit is an emission credit and confirms that an additional tonne of CO₂e has been certified as saved or sequestered within the framework of an carbon offset project. The number of carbon credits generated within a project is measured using the so-called baseline scenario, which compares the starting situation with the potential CO₂ savings from the proposed project activity.

For an carbon offset project to be officially recognised, it must first be registered according to a set standard. This requires a detailed description of the project in the Product Design Document (PDD) as well as a calculation of the anticipated emission savings according to the baseline scenario. The project is then verified and validated by an independent third-party testing organisation (e.g. TÜV). The actual CO₂ savings and progress are recorded in regular monitoring reports. The credits are then distributed regularly on this basis.

The carbon credits must be retired immediately after their purchase to ensure that they and the associated emission credit of one tonne of CO₂e are only used once. This is significant, as companies and/or products that are marketed as climate neutral must always ensure this retirement. Without retirement, an carbon credit could still be traded on the voluntary market, without achieving any additional reduction in emissions.

The Kyoto Protocol, which is binding under international law, stipulates that carbon offset projects should take place where they are most economical. The majority of carbon offset projects take place in the Global South, as they can be realised comparatively cheaply in developing and emerging countries and the savings potential from new technologies is still very high. The system functions, because it does not matter for the climate where greenhouse gas emissions are generated and saved. Ultimately it is the total volume of emissions in the atmosphere that counts and will decide whether the 1.5-degree target from the Paris Climate Agreement will be achieved.

Emissions trading is a key driver in the transfer of clean technologies for emerging and developing countries. In addition, the projects help to improve the economic, social and ecological circumstances on the ground and in doing so make an important contribution to achieving the UN Sustainable Development Goals (SDGs).

Offsetting unavoidable and historical greenhouse gas emissions as a complementary measure to avoidance and reduction is essential in order to achieve the international climate goals. It would of course be better not to produce greenhouse gases in the first place, but a certain residual amount is unavoidable due to our existence, lifestyles and economy. International climate goals would be unreachable without offsetting as an additional measure to avoidance and reduction, which would have immense consequences for life on Earth. So anyone who is serious about climate protection will use the offsetting mechanism as a short-term lever, while at the same time preparing and implementing a long-term and far-reaching climate protection strategy. Carbon offsetting must never be seen as a carte blanche for profligate consumption, as this would degrade the forthright and serious commitment shown by many companies, quite apart from the harm it would cause to the environment.

Climate-neutral basically means that something will have neither a positive nor negative effect on the climate. But this does not automatically imply that there will be no greenhouse gas emissions (at present, it is neither technologically possible nor economically viable to manufacture products without any CO₂ emissions whatsoever). In most cases, therefore, climate-neutral means that emission-reduction certificates have been issued to confirm carbon offsetting. We define climate neutrality as follows: “The ‘climate-neutral’ label confirms that the number of carbon credits needed to offset the identified volume of emissions have been issued from the portfolio of Fokus Zukunft or other sources (1 tonne of CO₂e = 1 carbon credit).”

Achieving ‘climate neutral’ status merely by purchasing carbon credits is not sufficient to demonstrate a serious and sustainable commitment to climate protection. In addition to offsetting, it is important for companies to consistently avoid and reduce their own emissions. It is therefore necessary that they develop and consistently implement a long-term and far-reaching climate protection strategy. Other ecological and social aspects are important here, in addition to the climactic effects. When purchasing carbon credits, it is also important to ensure that the projects generate a positive social impact at their individual locations.