Carbon Offsets: The New Asset Class
It is very common to see carbon offsets being used to reduce a corporation’s GHG emissions. What’s even more common is corporations realizing being unaware of climate related risks is poor risk management. If you’re unaware of how carbon pricing is affecting your cost of doing business, keep reading to learn the necessary actions.
The complicated part of carbon offsets is they’re not like stocks. There is no trading floor, no “Buying carbon offsets for dummies” book, and therefore no simple way to manage them. Often a corporation declares a carbon neutrality goal, and then someone is put in charge to figure out exactly what that looks like.
You’ve decided to buy carbon offsets, now what?
Once you buy an offset, what do you do? How do you connect the dots between your company’s carbon debt and carbon credits? How do you know if the offset is verified? With recent discussions at this year’s COP 27 the UN is cracking down to make sure companies are cutting emissions, not cutting corners. This means putting pressure to end greenwashing, therefore managing carbon offsets have to be done with care, education, and verification. Information on how to exactly achieve this, is not easily found. Most of the time you’ll need environmental consultants to lead the way. For many small to mid-size businesses, that’s not in the budget.
The corporation has to manage all the sides of the carbon ledger. Think of it this way, all the GHG emissions a company produces is the carbon debt. A carbon offset is on the credit side of the ledger. Meaning, once an offset is purchased it must be tracked on the financial statements. This is what climate accounting lays out for you. Translating environmental information into financial data so you can manage your risk exposure, and fully understand the entire carbon ledger.
SCOP3 is climate accounting software built to manage your carbon offsets, insets, and GHG reductions within your operations. Finally, No more wondering if the offsets your purchasing are legitimate. Climate accounting solves all your questions surrounding the management of your offsets. Giving you assurance that your company’s actions to heal the climate and lastly protect your exposure to climate risks are worth the investment.
To start managing your climate risk visit www.climateaccounting.com and sign up for early access.