The timing for this year’s Earth Day couldn’t have been better. As countries across the world celebrated, the urgency for firms to act has reached a fever pitch. As noted by National Geographic on April 5, when citing findings from the UN’s Intergovernmental Panel on Climate Change (IPCC), “unless global greenhouse gas emissions peak no later than three years from now and are cut nearly in half by 2030, the world will likely experience extreme climate impacts.”
On that cheery note, I wanted to share a key insight based on client questions, discussions, and concerns gathered over the past several months. And it boils down to this: Given the urgency to drive positive climate action, including lowering carbon emissions, firms must exploit all approaches at their disposal. But these approaches are not all created equal — not even close. In fact, overreliance on some environmental sustainability approaches will create more problems than solutions.
Be Wary Of Silver Bullets
When it comes to sustainability, action is what matters: reducing your carbon footprint via both direct and indirect emissions, optimizing your supply chain or product manufacturing processes, implementing sustainability management software, or empowering a dedicated sustainability function with the resources and support to drive real change. These are all critical but also massive undertakings that require vision, commitment, and clear leadership.
Other approaches, including leveraging carbon offsets and investing in carbon capture and storage (CCS) technology are potentially useful and a valid part of an overall climate action toolkit. But they’re also far more limited. Why? They only address the symptoms of climate change, not the cause. More worrying is the tendency of firms, entire industries, and/or governments to misuse or misrepresent these approaches as an alternative to actual action, as a way to minimize the urgency to act or as a cover for slow-walk initiatives.
Carbon Offsets Are Extremely Valuable — With Caveats
As my colleague Amy DeMartine previously noted, “The best type of carbon offset? None. Reduce your emissions instead.” Of course, this is going to take time. But even in industries that have struggled to reduce emissions due to the lack of cleaner alternatives, including airlines, progress is being made. As part of a broader approach, nature-based offsets are best — improved forest management, protection of coastal ecosystems — since they capture carbon dioxide naturally while promoting biodiversity and local livelihoods.
Most importantly, when considering offsets, do your research! Demand is soaring. But while standards exist, the market and industry that’s developed around offsets is poorly regulated and lacks adequate transparency. Customers, and the market, will see through firms’ use of dodgy offsets as simply another example of the greenwashing it is. This has already led some companies, like Lyft, to publicly announce plans to scrap their carbon offset programs and instead transition to electric vehicles. While others, like Westpac in Australia, saw their efforts backfire through negative publicity.
Carbon Capture And Storage Sounds Too Good To Be True — Because It Likely Is
As its name implies, CCS involves removing CO2 from industrial processes that burn fossil fuels and then storing it long term underground. While less familiar than carbon offsets, interest is growing sharply. And the reason is simple. The planet still runs primarily on fossil fuels, and CCS is seen by many firms as “a way to deliver on emission reduction promises and compete in carbon credit programs while keeping their existing operations productive” — in other words, as a means to maintain business as usual.
The risks related to CCS are many: immature and unproven technology, high costs, transport issues, storage capacity limitations, and their primary use in enhanced oil recovery (EOR). But the bigger issue is that CCS is competing with renewable energy sources for funding, hindering positive climate action. Nowhere is this more evident than the US government’s Infrastructure Investment and Jobs Act, which puts CCS at the center of President Biden’s climate plan.
As we noted in a recent blog on the topic of gender equity initiatives, “intent and lofty promises mean nothing without outcomes. Worse, intent can translate into misguided actions that are, at best, ineffective and may be actively harmful to the organization itself.”
So, leverage all means available to drive positive climate action. A genuine desire for change is a powerful motivator. But be wary of seemingly “easy” solutions — especially ones that can potentially be used as excuses for inaction or in place of real structural changes to your organization’s operations. It’s these real, but difficult, structural changes and a companywide embrace of a sustainable operating model that will spur innovation and long-term business success.
For more Forrester insights on sustainability, see the full set of Forrester’s climate action blogs.
This post was written by VP, Research Director Michael Barnes and it originally appeared here.