As climate change becomes an increasingly pressing issue, businesses around the world are looking to reduce their carbon footprints and achieve net-zero emissions. One of the ways companies are attempting to reach these goals is through carbon offsets. Carbon offsets allow businesses to compensate for their emissions by investing in projects that reduce or sequester an equivalent amount of carbon dioxide elsewhere.
However, the treatment of carbon offsets can vary significantly across different carbon reporting standards, such as the PAS (Publicly Available Specification), the GHG (Greenhouse Gas) Protocol, and the SECR (Streamlined Energy and Carbon Reporting). This article explores how these standards address carbon offsets and examines whether businesses in the supply chain can and should claim net-zero status based on offsets purchased by a single entity within the chain.
PAS 2060: Specification for the Demonstration of Carbon Neutrality
PAS 2060 is a globally recognized standard for demonstrating carbon neutrality. It provides a framework for businesses to measure, reduce, and offset their carbon emissions. According to PAS 2060, businesses must first take all reasonable steps to reduce their emissions before relying on offsets to claim carbon neutrality. The offsets used must be from credible sources, and the entire process should be transparent and independently verified.
Treatment of Carbon Offsets
PAS 2060 allows businesses to claim carbon neutrality through the use of offsets, but emphasizes the need for ongoing emission reductions. The standard requires a public declaration of carbon neutrality, detailing the offsets used, the projects they support, and the verification process.
Supply Chain Considerations
In a supply chain context, PAS 2060 does not explicitly allow multiple businesses to claim net-zero status for the same set of offsets. Each entity must independently verify and declare their own emissions and offsets. Therefore, if one business in the supply chain purchases offsets, other businesses cannot automatically claim net-zero status for their scope 3 emissions (indirect emissions) related to that business’s activities.
GHG Protocol: A Comprehensive Framework
The GHG Protocol is one of the most widely used frameworks for measuring and managing greenhouse gas emissions.
It categorizes emissions into three scopes:
- Scope 1: Direct emissions from owned or controlled sources
- Scope 2: Indirect emissions from the generation of purchased electricity, steam, heating, and cooling consumed by the reporting company
- Scope 3: All other indirect emissions that occur in a company’s value chain
Treatment of Carbon Offsets
The GHG Protocol does not directly endorse or reject the use of carbon offsets. Instead, it provides guidelines on how offsets can be accounted for in emission inventories. Offsets can be used to neutralize a company’s emissions, but they must be reported separately from the emission reductions achieved through direct actions.
Supply Chain Considerations
The GHG Protocol’s approach to supply chain emissions (Scope 3) is more nuanced. While offsets purchased by one business can be reported and used to claim net-zero status for their own emissions, it does not automatically transfer this claim to other businesses in the supply chain. Each business must independently account for and report their own emissions and cannot double-count offsets used by another entity. Therefore, if a supplier purchases offsets, customers downstream in the supply chain cannot claim those offsets towards their own net-zero goals without explicit agreements and clear, transparent reporting.
SECR: Streamlined Energy and Carbon Reporting
The SECR is a UK-specific framework that mandates large companies to report their energy use and carbon emissions. While SECR focuses on transparency and accountability, it provides less detailed guidance on the use of carbon offsets compared to PAS 2060 and the GHG Protocol.
Treatment of Carbon Offsets
SECR requires companies to report their gross emissions and any measures taken to reduce them, including the purchase of carbon offsets. However, it does not provide a specific framework for claiming net-zero status based on offsets. The emphasis is on transparency and completeness of reporting.
Supply Chain Considerations
Under SECR, if a business in the supply chain purchases carbon offsets, it should report this action in its own emissions disclosure. However, similar to PAS 2060 and the GHG Protocol, other businesses in the supply chain cannot claim net-zero status based on another company’s offsets. Each entity must report its own emissions and any offsets purchased to mitigate those emissions.
Other Standards and Frameworks
ISO 14064: International Standard for Greenhouse Gas Inventories
ISO 14064 provides specifications and guidance for the quantification, monitoring, reporting, and verification of greenhouse gas emissions. It allows for the use of carbon offsets but requires rigorous verification and transparency.
CDP: Carbon Disclosure Project
The CDP encourages companies to disclose their carbon emissions and actions taken to reduce them, including the use of offsets. While it supports transparency and accountability, it does not specifically address the transferability of offset claims within a supply chain.
Conclusion
Different carbon reporting standards handle carbon offsets in various ways, but a common theme is the emphasis on transparency, independent verification, and the need for direct emission reductions. When it comes to supply chains, the consensus among standards like PAS 2060, the GHG Protocol, and SECR is clear: carbon offsets purchased by one business cannot be claimed by other businesses in the supply chain to achieve their own net-zero status. Each business must independently account for and report its emissions and offsets.
To ensure integrity and avoid double-counting, businesses in a supply chain should collaborate on emission reduction strategies and clearly communicate their carbon offset usage. By doing so, they can collectively contribute to a lower carbon footprint while maintaining transparency and credibility in their carbon reporting efforts.
While You Are Here…
Why not use one or all of Bryce Energy Services free online calculators.
Carbon Footprint — Solar Panels — Electric Chargers — ISO 50001 Gap Analysis
Blog News Carbon Footprint
The Carbon Cost of Building the Future: Why Capital Projects Need Their Own Carbon Accounts
Across the UK, enormous amounts of capital are being invested in new infrastructure. Electricity networks [...]
Oct
Blog News Carbon Footprint
Carbon Accounting Without Adding Another Job to the Business
For many businesses, the biggest barrier to carbon reporting is not necessarily the calculation itself. [...]
Sep
Blog News Carbon Footprint
Your Carbon Footprint Is Only as Good as the Data Your Suppliers Give You
For many businesses, calculating Scope 1 and Scope 2 emissions is relatively straightforward. You can [...]
Sep
Blog News Carbon Footprint
Stop Measuring Carbon in Isolation: Use the Metrics That Already Run Your Business
Most businesses understand the basic idea of carbon reporting: Measure emissions this year. Measure them [...]
Aug
Blog News Carbon Footprint
Net Zero to 2050: Perhaps the Carbon Plan Should Become the Business Plan
For many businesses, 2050 feels a very long way away. Most organisations rarely plan in [...]
Aug
Blog News Carbon Footprint
Climate Change Has Not Gone Away Because a Council Votes to Stop Calling It an Emergency
There can hardly be a worse time for councils to start reversing climate emergency declarations. [...]
Aug
Blog News Carbon Footprint
Your Profit and Loss Account Is Not a Carbon Footprint
Carbon accounting is becoming increasingly important to businesses of every size. Customers are requesting emissions [...]
Aug
Blog News Sustainability
A Billion Plastic Pellets on Our Doorstep — Where Is the Urgency?
A significant environmental incident is unfolding on the beaches of North East England, yet beyond [...]
Jul
Blog News Carbon Footprint
Net Zero Airports? We Need to Talk About Facilitated Emissions
Airports are increasingly publishing impressive carbon-reduction claims. “Airport emissions reduced by 50%.” “Carbon-neutral operations.” “Net [...]
Jul
Measure - Manage - Reduce - Offset - Report
Bryce Energy Services combines practical energy and carbon consultancy with the CO₂ Impact online platform, helping businesses measure their emissions, meet reporting requirements and turn carbon data into achievable reduction projects.
With CO₂ Impact, your business can:
Unlike a standalone carbon calculator, we can help you interpret the results, investigate energy-saving opportunities and prioritise projects based on cost, carbon savings and practical deliverability.
CO₂ Impact subscriptions start from £29 per month.