What is carbon offsetting?
Carbon offsetting refers to methods used by individuals or businesses to “compensate” for GHG emissions they are responsible for elsewhere. The goal of these methods is usually to “net off” or “sequester” (take some CO₂ out of the atmosphere and store it) an entity’s GHG emissions. This can be done through purchasing “carbon credits” or investing in a certified external scheme that removes and stores carbon. In order to validate a carbon offset against a recognised reporting framework (such as the SBTi), carbon offsetting schemes should meet certain standards that prove they are a valid way of removing GHGs from the atmosphere for an agreed length of time.
There are different types of offsetting methods. These can be nature-based or artificial and include techniques ranging from rewilding to sequestration. Carbon offsetting is also sometimes referred to as “neutralisation” or “compensation” (both terms used by the SBTi), as well as “balancing.”
Please note: Organisations that verify net-zero targets (such as the SBTi) do not allow carbon offsets to be counted as reductions toward meeting a target. Instead, companies must account for reductions resulting from direct action within their operations or value chains. Carbon offsets may be useful, however, as an option for companies wishing to finance additional emission reductions beyond their own target.
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