What is carbon offsetting and does it actually work?

Carbon offsetting is the new black, it would seem. For spring/summer 2020, Gabriela Hearst (above) became the first brand to stage a carbon-neutral fashion show during New York Fashion Week, swiftly followed by Burberry in London. Gucci is taking the initiative one step further, declaring its operations, supply chains — and its Milan Fashion Week show — completely carbon neutral. But what does carbon offsetting mean and does it work?

What is carbon offsetting? 
Carbon offsetting is a way of compensating for your emissions by making an equivalent carbon dioxide saving elsewhere. For large corporations, carbon offsetting is often a financial transaction, which involves investing in environmental projects and conservation schemes to balance out the damaging emissions produced by the company’s operations and supply chains. 

Gucci and Burberry (above) have invested in projects endorsed by REDD+, the VSC-approved scheme set up by the United Nations Framework Convention on Climate Change (UNFCCC) that aims to stop deforestation. Meanwhile, Gabriela Hearst made a donation to the Hifadhi-Livelihoods Project in Kenya, which preserves its forests and protects the health of rural communities. 

For now, carbon offsetting is considered the best option available for companies looking to mitigate their environmental impact. “Given the need for urgent climate action, companies must start accounting for their entire emissions in their own operations and supply chains,”  Marco Bizzarri, president and CEO of Gucci, tells . “There are not enough solutions available to 100 per cent mitigate these supply chain emissions, and these solutions could take years that we don’t have to spare, to become viable.” 

Offsetting also means that companies have to assess the impact they’re having on the environment. “Measuring the carbon footprint of our show was just a first step,” adds Gabriela Hearst. “If you don’t collect the data, you don’t know the number you have to reduce by. We should know the actual numbers of our impact [of doing] business. These are the steps needed to understand the real cost of our products to humanity.”

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How are carbon offsets calculated?”
Kering-owned Gucci (above) uses an annual Environmental Profit and Loss (EP&L) account. This measures the carbon footprint made by Kering’s operations and supply chain — which makes up 90 per cent of all its emissions — and finds its monetary value to quantify and manage its use of natural resources. 

With Gabriela Hearst, runway-production company Bureau Betak worked to minimise the amount needed to be offset by reporting on power usage, transportation, catering and waste, while sustainability consultancy firm EcoAct calculated the resulting emissions and carbon footprint of the spring/summer 2020 show. After finding out its monetary value, the equivalent dollar was donated to the aforementioned Kenyan project.

But how does a company find out the equivalent monetary value of carbon? In these instances, the term ‘carbon price tag’ is often applied. Environmental company Climate Care puts the price of a carbon credit (what needs to be spent to offset one tonne of CO2) at £7.50 (AU$13.80), although prices vary depending on what offset scheme you’re investing in. 

In practice, carbon offsetting is much more complicated. “It is not an exact science,” explains Dr Roger Tyers based at the department of sociology and social policy at the University of Southampton. “When it comes to planting trees, it’s really difficult to know how long it will take for them to mature, [and] be able to take carbon out of the atmosphere. It might take five or 10 years.” With a UN report warning that we need to take urgent action by 2030 to prevent irreversible climate damage, many consider this time delay to be a big problem.

The difficulties in accurately measuring the success of carbon offsetting have been documented in various governmental studies: one report published by the Norwegian government — which is investing 20 billion kroner (AU$4.3 billion) per year to become a carbon-neutral country by 2030 — described the results of REDD+ as “delayed and uncertain”. Meanwhile, a study by the European Commission found that 85 per cent of offsetting projects were unlikely to deliver ‘real’ or ‘measurable’ benefits.

So how effective a solution is carbon offsetting? 
One of the main criticisms is that carbon offsetting doesn’t directly tackle the issue at hand, as companies are still producing emissions in the first place. Focusing on avoiding a carbon footprint as much as possible — alongside offsetting — is crucial. “First, we are avoiding and reducing our GHG [greenhouse gas] emissions as much as we can as a priority, and then we are offsetting the remaining emissions entirely every year,” explains Bizzarri. “Gucci’s (above) new carbon-neutral approach is a solution that can have a positive impact on nature and climate immediately.” 

The difficulty in pinpointing the actual impact of offset projects means the term ‘carbon neutral’ can be misleading to consumers. “[Carbon offsetting] is a very messy business,” Tyers says. “The ‘carbon neutral’ label gives the impression to customers that we can just carry on as business as usual, consuming excessively, because [they believe] these well-meaning companies have got it covered.” 

There is also the question of ethics and how offset schemes, which are predominantly based in developing countries, affect local communities. A report by Carbon Market Watch highlighted four cases in which projects were said to have caused harm, including in Uganda, where a private company reportedly blocked access to land vital for the livelihoods of local residents, in order to plant forests in that area. 

Despite the confusion surrounding it, offsetting can have a hugely positive effect when combined with reducing emissions. A study published by magazine argued that planting billions of trees across the planet is “the best climate-change solution available” and could remove up to two-thirds of all the emissions produced to date. “Most carbon offset projects do good things: planting trees, creating jobs,” Tyers comments. “But let’s not rely on offsets to make the problem go away, because it’s not going to.”