A Pinch of Knowledge: What is a “carbon offset” and why is every brand talking about it?

November 30, 2022
by Anna Eyler

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You’ve probably heard a lot of sustainability terms lately, including carbon credits and offsets, net zero emissions, carbon neutrality, and more. And if you’re like most people, you have no clue what it all means. In this series of blog posts, we'll break it down for you so you can see through greenwashing, identify companies that are doing the right thing, and take steps to reduce your own carbon footprint.

The Basics of Carbon

Carbon credits are like permission slips typically purchased by companies, usually from the government, that allow them to release one ton of emissions. The revenue from the permits usually goes toward environmental programs. The idea behind carbon credits is that the government can slowly reduce the number of permits given, reducing emissions. Companies can decide between investing in technology to reduce emissions or buying credits to be able to continue to emit. These credits are usually not voluntary and only apply to specific industries.

Carbon offsets, on the other hand, are certificates that represent the removal or avoidance of one metric ton of carbon dioxide equivalent and can be purchased to compensate for a company’s or individuals’ emissions. These certificates are created by organizations to fund carbon avoidance or removal projects. Offsets are usually a voluntary action companies or individuals can take to ‘make up for’ emissions they cannot eliminate. Offsets should only be used in a specific way. Many large companies are facing a lot of backlash for the inappropriate use of offsets, so let’s go over when offsets should be used, when they shouldn’t, and what should be done instead when offsets are appropriate.

The incorrect way to use offsets is to try to use them to ‘make up for’ all of a company’s or individual’s emissions through offsets, instead of taking action to reduce their emissions, also known as decarbonizing. EasyJet landed in hot water over calling their flights ‘carbon neutral’ because they were offsetting all of their emissions. Critics correctly pointed out that carbon offsets should only be used for emissions that were impossible to eliminate during a company’s decarbonization efforts. EasyJet has since changed their direction and focused on decarbonization.

The SBTi’s Corporate Net-Zero Standard, the world’s first framework for corporate net-zero target setting in line with climate science, requires long-term deep decarbonization targets of 90-95% before 2050. The remaining 5-10% can be covered by offsets. After a company has created a plan to eliminate most of its emissions, then they’re ready to offset the rest. 

Let’s take the example of shipping packages to customers. There’s currently no way to ship anything without creating greenhouse gas emissions. We hope as technology advances that changes, but for now companies should find ways to make their process as efficient and carbon-free as possible. Then, once there’s nothing else that can be done, that's when offsets become appropriate and can be a powerful tool to minimize a company’s environmental impact. As an individual you can choose the most eco-friendly shipping option when purchasing something online and then offset the rest with offsets from Salt. You can also find sustainable brands through curated brand partners you can access in your Salt membership.

Finding High-Quality Offsets

How does someone find high quality offsets that are actually making the positive impact they claim to be? Organizations like Gold Standard, Verified Carbon Standard, and Plan Vivo vet their projects to attempt to ensure they are high quality. The work doesn’t stop there. Any offset project should be able to explain how they ensure that they’ve considered these six critical risks:

As an individual, Salt has taken a lot of the guesswork out. 

Final Thoughts

Understanding the appropriate way for a company or an individual to utilize offsets makes you a powerful eco-conscious consumer. You can see past the greenwashing ‘carbon neutral’ and ‘net zero’ claims of companies avoiding taking actual responsibility for their emissions. And you can identify companies that are doing the right thing, right. Calling out greenwashing and praising solid green policies either online or to friends and family is important. When companies can no longer get away with greenwashing, they’ll have to put in the hard work to actually decarbonize. That’s one way businesses can be encouraged to take meaningful climate action. And you can encourage other people in your life to look into high-quality offsets for themselves, to supplement their efforts to reduce their carbon footprints.