Carbon footprint - It’s not easy being green: Offsets explained

GEORGINA QUACH

Can eating burgers fight climate change? Swedish fast-food chain Max seems to think so. Not only does the company claim to have net-zero emissions, but it also brands its beef and non-meat burgers as “climate-positive.”

Max claims to offset 110% of its carbon emissions — an annual total of 147,000 tons in 2020 — mainly by donating a fraction of profits to plant trees in Uganda.

This sounds ideal. But research recently published in the Environmental Science & Policy journal has challenged this “net-zero” logic.

By buying “offsets”, the chain does not actually need to reduce actual carbon emissions to fulfil its net-zero claim. In fact, Max’s absolute emissions have more than tripled between 2007 and 2021 due to the opening of more restaurants and subsequent higher power usage. And the company admits, it expects its carbon impact to keep on growing.

Buying offsets is a way to “compensate” for environmental damage. Companies make a financial contribution to projects that reduce the amount of carbon dioxide in the atmosphere, and in exchange can keep polluting themselves.

Examples of projects include planting trees and rewetting peatlands — which store huge amounts of carbon in their soil. By this logic, it is possible to take “carbon neutral” flights with German airline Lufthansa. Even the FIFA World Cup in Qatar billed itself as climate-neutral.

In recent years, the carbon offset industry has boomed. It is worth $2 billion (1.87 billion euros) annually and is expected to grow five times that size by the end of the decade.

After the concept’s invention in 1987, some international treaties such as the Kyoto protocol have let industrialised countries use carbon credits, each of which is worth one ton of carbon, to keep within emissions limits. That market –— where carbon credits are traded to meet government regulations — is much bigger, about $261 billion a year.

However, experts have warned most of the credits on the voluntary carbon market aren’t effective.

Recent analysis by British news outlet the Guardian, German newspaper Die Zeit and the investigative site SourceMaterial, found more than 90% of rainforest carbon offsets by Verra, the world’s biggest certifier, are likely to be “phantom credits”, meaning they do not represent genuine carbon reductions. Verra has strongly disputed the findings of their investigation.

Forrest Fleischman, environmental and natural resource policy professor at Minnesota University, argued that corporate claims of being “climate positive” cannot solely rely on offsets. “There isn’t enough room on the planet to absorb all the carbon emissions through trees,” he said. “So while this might look good for one company, it’s not a practical strategy globally.”

According to Reprisk, a Switzerland-based data science firm that analyses companies’ environmental, social and governance practices, one in five ESG risks are linked to carbon offsets and misleading communications — rising to one in three for the food and beverage sector.

“If a company claims to be carbon neutral, consumers would think the company doesn’t harm the environment, but the reality is that changing your business model is costly and time-consuming,” explained Alexandra Mihailescu Cichon, Reprisk’s EVP.

Nature-based solutions could also offer answers. A study by the We Mean Business Coalition, a global group of seven non-profit climate-focused organisations, showed that if the world’s 1,700 biggest emitters compensated each year for just 10% of the emissions they have not yet cut, through investments in nature, it would mitigate nearly 30 gigatons of emissions and mobilise up to $1 trillion in climate finance by 2030.