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  • Writer's pictureLive Oak Management

Environmental CSR – Making a Difference, or an Act for Shareholders?

By: William Wood, Account Executive

Corporate Social Responsibility is a pillar of modern business operations. Companies continue to make efforts to advance racial equality, participate in fair trade, increase charitable giving… the list goes on. One cause that has seen a great deal of corporate interest stands out: climate change.

Amazon, for example, has made many changes to its operations to be more environmentally friendly. The company plans to have 100,000 electric delivery vehicles by 2030. It has also started to use recycled materials to manufacture devices and packing designed by Amazon. While these efforts are notable, they do not entirely stop carbon from being released into the atmosphere. According to the United States Environmental Protection Agency, carbon released from human activities is one of the primary drivers for global warming. These effects include increased average temperatures on earth, severe heat waves, rising sea levels, abnormal weather patterns, and damage to the ecosystem.

So what are companies doing to stop excess carbon from being released? Purchasing carbon offsets. United Airlines has launched their CarbonChoice offset program, an initiative that allows customers to purchase carbon offsets through the airline to create supposedly 100% carbon neutral travel. Amazon has pledged to spend millions of dollars on forest preservation, a key component of offsetting carbon. Even our own school, Elon University, has incorporated the purchase of carbon offsets into its Sustainability Master Plan.

The concept of carbon offsets is seemingly simple. According to the nonprofit Sustainable Travel International, purchasing carbon offsets is “simply making a financial contribution that will be invested in a carbon reduction project.” This means companies purchase offsets that are supposed to be equal to an amount of carbon released in its operations. The most popular projects focus on forest restoration to create a better balance of elements in the atmosphere. While this sounds great and looks good on paper, many of these investments are being abused.

A report from The Guardian found that ten accredited carbon offset projects had incorrectly calculated the impact of their work in reducing carbon and the scale of forest replenishment.

What does that mean? There is little accountability in the realm of offsetting carbon, meaning it is difficult to measure their success. Furthermore, ProPublica found that Brazilian forest-based carbon offset projects failed because loggers cut down trees after the offsets were purchased by companies in the United States and Europe corporations.

Companies who claim to be “carbon neutral” by purchasing carbon offsets are not changing their business practices, but are actually going about their operations in an unethical manner. It’s time for businesses across the world to stop putting bandages over their deep gashes. While the corporate social responsibility efforts to mitigate climate change are noble, companies need to go beyond purchasing carbon offsets in order to limit their greenhouse emissions.

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