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Is Carbon Offsetting the Right Choice For Your Company?

CO2 written in clouds on a blue backdrop

In the complex landscape of climate action, carbon offsetting has become a widely adopted practice as many opt to offset their flights, homes, or workplaces. GBA's recent survey showed a decrease in companies who carbon offset over the last 3 years, as well as a decrease in companies who plan to use carbon offsets in the future. We wanted to dig into some of the pros and cons of this practice.

Carbon offsets function by calculating emissions for an activity and then paying offset companies to counterbalance those emissions elsewhere, often through the implementation of clean energy technologies or the support of reforestation efforts. When companies are deciding if it's the right choice for them, it's important to consider the costs and benefits.

The Role of Carbon Offsetting

According to organizations like the World Wildlife Fund (WWF), carbon offsetting alone does not address the root cause of emissions. Instead, it should be considered a last resort after prioritizing avoidance, reduction, and substitution of emissions sources.

What Are Carbon Offsets Actually Doing?

Critics have raised valid concerns about the efficacy of carbon offset projects, citing variations in their efficiency and the risk of greenwashing. Some projects may overstate their ability to reduce emissions, leading to a perception of offsetting as a superficial solution. However, it's crucial to acknowledge that carbon offsetting also serves as a lifeline for environmental projects that may struggle to secure funding independently.

Is There a Longterm ROI for Carbon Offsets?

In short, no. Unlike internal sustainability initiatives that may yield measurable ROIs over time, offsetting lacks direct financial benefits. However, in the interim, it provides a means for companies to contribute to environmental projects while striving to reduce their carbon footprints through other avenues. In this sense, carbon offsetting can be viewed as a complementary strategy rather than a standalone solution.

Ultimately, the decision to engage in carbon offsetting is nuanced. It neither inherently signifies environmental commitment nor negligence but instead depends on the context in which it's implemented.



Helps environmental projects that can’t secure funding on their own

Does not address the root cause of emissions

Allows for companies to do more in reducing their carbon footprint

Lacks long-term ROI

Flexibility in achieving carbon reduction goals for emissions that are difficult to eliminate internally

Offset projects can range in efficiency (potential for greenwashing)

Image from Unsplash by Matthias Heyde

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