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4 steps to make your company carbon neutral

Fighting climate change will take enormous societal change, but there are very simple things businesses can do to mitigate their responsibility.

4 steps to make your company carbon neutral
[Images: GarryKillian/iStock, Nik_Merkulov/iStock]

On a trip to Vietnam to visit a manufacturing partner two years ago, the founder of Peak Design, a San Francisco-based company that makes backpacks and other bags, stood looking at a storage facility full of the materials used to make the company’s products. He started thinking about the environment. “It was just an extraordinary amount of material,” says Peter Dering. “It was kind of a gulp moment of, ‘oh boy, we are making an impact—in a negative way.'” He realized that he had no idea what the company’s carbon footprint might be, but he wanted to find out.

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A consulting firm told Peak Design that it would cost tens of thousands of dollars to calculate its greenhouse gas emissions in detail. But as they went through the process, Dering realized that it would have been possible to roughly estimate emissions for next to nothing. He also realized that buying carbon offsets to make the company carbon neutral would cost comparatively little. In a year in which Peak Design did around $30 million worth of business, everything could be offset for $60,000. Dering started to wonder why more companies weren’t doing the same thing. He decided to partner with the CEO of BioLite, another company that had taken steps to become carbon neutral, to launch a new nonprofit called Climate Neutral that provides tools to make it easier for any business to offset its entire carbon footprint, from its offices to indirect emissions from its supply chain. The nonprofit will also certify businesses as carbon neutral.

There are four steps for companies to become carbon neutral (or, in some cases, to become “carbon positive,” reducing more emissions than they generate).

[Images: GarryKillian/iStock, Nik_Merkulov/iStock]

1. Measure

First, a company needs to measure its total greenhouse gas emissions. For a company that doesn’t make physical products, such as a branding studio or a law firm, the largest part of its carbon footprint might be energy use in its offices or employee’s plane travel. For a company that manufactures products, most emissions will likely be so-called “Scope 3” emissions outside the company’s direct control, including the emissions from its supply chain and from customers using its products. That total picture is critical, Dering says.

Companies that want to understand their total footprint in detail can work with consultants who even travel to visit factories to look at energy bills; Peak Design initially worked with 3Degrees, a “footprinting” company that charges a hefty fee for the work. But the new nonprofit is working with a life-cycle analysis expert to build a software tool that uses secondary data, so brands can calculate emissions themselves. The tool, which will launch in early 2020, may be available free. For offices that don’t make products, the carbon offset nonprofit Carbonfund.org offers another simple tool to roughly calculate emissions. Natural Capital Partners, a company that offers carbon offsets, also has online calculators. That’s not to say that there isn’t value in more detailed analyses with primary data. “One of the things that’s so revealing about doing a high-quality emissions inventory for a small business is they get to look at their operations through a whole different lens,” says Mark LaCroix, executive vice president for the Americas at Natural Capital Partners, noting that companies often learn about emissions that they might not have considered otherwise—say, refrigerant leaks from air conditioners.

[Images: GarryKillian/iStock, Nik_Merkulov/iStock]

2. Cut emissions

After a company identifies hotspots in its carbon footprint, it can take steps to shrink those emissions. Peak Design realized that the aluminum used in its products was a major piece of its impact, and is beginning to use more recycled aluminum to reduce emissions. Companies that sell services rather than products might focus on switching their offices to renewable energy or limiting travel. As one example, Moving Brands, a creative studio with offices in London, San Francisco, New York, and Zürich that is aiming to become “carbon positive,” is pushing to use video chats with clients in place of in-person meetings as much as possible, and lengthening any trips that employees do make so they’re not flying back and forth multiple times. The studio also works together as a team to identify smaller changes that it can make, like buying “imperfect” produce from a supplier that saves fruit from becoming food waste. “If you do it in an open, discursive way, it actually becomes a purpose of the whole organization,” says Mat Heinl, CEO of Moving Brands. When Climate Neutral certifies companies as carbon neutral, the companies will have to submit an action plan explaining what they plan to do.

[Images: GarryKillian/iStock, Nik_Merkulov/iStock]

3. Buy offsets

Companies can buy high-quality carbon offsets to cover the emissions that can’t easily be eliminated. Peak Design chooses to fund projects that cover landfills to prevent methane, a potent greenhouse gas, from escaping from rotting food. “It’s something that’s incredibly concrete,” Dering says. “We can very clearly show how much methane was going to come off of that, and then, how much methane doesn’t now. So the carbon offset is permanent, and it’s accountable.” Some carbon offset projects can be harder to track and, in some cases, managed in a way that they’re less effective—projects designed to prevent deforestation, for example, haven’t always worked well. But in general, there are good options available, and they’re surprisingly cheap. When Etsy became the first global e-commerce company to offset shipping emissions earlier this year (though just one part of its footprint), it cost less than a penny per shipment. When Ben and Jerry’s ran a pilot to offset the carbon footprint of the ice cream that it sold in stores, it also cost less than a penny per serving.

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[Images: GarryKillian/iStock, Nik_Merkulov/iStock]

4. Label and communicate

Climate Neutral will offer companies that go through its process a “Climate Neutral Certified” label that can be placed on products, packaging, and websites; other organizations that offer footprinting services have similar labels. Companies also need to clearly explain what they’ve done. “It’s important to get the communications piece right,” says LaCroix. “Because there’s a lot of people out there that do really good work who really don’t do well with the communications. They overstate, they get it wrong, and then, you know, it comes across as potentially being greenwash.” In Climate Neutral’s case, the label will only apply to companies that reduce and offset the emissions of their entire supply chain. “It seemed to me like there should clearly be a label that signifies companies that have offset the entirety of their carbon footprint,” says Dering. “And furthermore, those companies should become the standard, right? This should be the new low bar for sustainability.”

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About the author

Adele Peters is a staff writer at Fast Company who focuses on solutions to some of the world's largest problems, from climate change to homelessness. Previously, she worked with GOOD, BioLite, and the Sustainable Products and Solutions program at UC Berkeley, and contributed to the second edition of the bestselling book "Worldchanging: A User's Guide for the 21st Century."

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