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Supply Chain
Carbon Offsets:
Sowing the Seeds of a Climate-Resilient Future

As companies race to address climate change, unlocking the carbon potential from responsibly managed forests creates a powerful new way for companies to offset their unavoidable emissions.

Bloomberg Green recently found that companies with science-based climate goals cut their emissions faster than those without. And although more and more companies are seeking to reduce their greenhouse gas emissions as quickly as possible — which should be the priority for any climate strategy — few are able to immediately reduce them to zero. That’s why carbon offsets have become such an important consideration.

With so many companies setting ever-more-ambitious climate goals — including Amazon, BlackRock, Delta Air Lines, IBM, Kimberly-Clark and Procter & Gamble, to name just a few — demand for quality carbon offsets is already sky high and sure to grow. In fact, a recent report in Ecosystem Marketplace suggests that to prevent global temperatures from rising more than 1.5 degrees Celsius, the carbon offset market will have to grow at least 15-fold by 2030.

With strong and growing interest, companies should be asking how to ensure the offsets they buy are high quality — not only to justify their investments in the near term, but also to ensure long-term credibility for these actions. On this question, there is some good guidance available:

  • WWF’s Position and Guidance on Voluntary Purchases of Carbon Credits gives straightforward advice — such as prioritizing science-based strategies to reduce Scope 1, 2 and 3 emissions over offsets — before resorting to the use of carbon offsets.

  • The same paper also recommends reporting transparently — e.g., reporting total emissions and carbon credits purchased, rather than solely aggregating a “net emissions” number — because communicating “carbon neutrality” or “net zero” emissions may prematurely imply the needed work is done.

  • A new paper from McKinsey and the World Economic Forum asserts “there is no clear path to deliver climate mitigation without investing in nature.” Today, natural climate solutions represent 40 percent of voluntary carbon credits, up from 5 percent in 2010, according to the report. Natural climate solutions — or nature-based solutions — include conservation, restoration and improved management activities that increase carbon storage, avoid greenhouse gas emissions and deliver a range of other benefits, such as habitat and watershed protection.

  • Microsoft has committed to an ambitious plan to go carbon negative, removing all historical emissions since it was founded in 1975. Achieving this goal requires a huge amount of carbon removal, which Microsoft has analyzed with its typical rigor. Summarizing its findings in a recent report, the company offers important guidance for any organization using offsets as a way to remove carbon from the atmosphere.

In the above report, Microsoft raises a critical question: Under any given offset program, how long will carbon dioxide be kept from the atmosphere? Importantly, nature-based solutions are characterized as short-term (up to 100 years) or possibly medium-term (100-1000 year) solutions, because forests and soils are part of the Earth’s natural carbon cycle.

Improved forest management offers immediate opportunities to sequester additional carbon, notably by letting trees continue to grow — which is important given the urgency of the climate crisis. Forests, of course, mean much more to life on Earth than simply carbon storage. The Forest Stewardship Council’s forest-management standard reflects this reality, ensuring that the full range of forest-delivered benefits — such as water quality and quantity, wildlife habitat, and traditional Indigenous uses — are protected. Many improved forest-management carbon projects rely on FSC certification for this purpose, including the Collins-Modoc Reforestation Project in California, the Shafer-Tuuk forest in Kentucky, and the Bethlehem Authority forest in Pennsylvania.

FSC is commissioning research to help determine the extent to which FSC-certified forests in North America sequester additional carbon, relative to conventionally managed forests. This work — made possible due to financial support from Cascades, DPR Construction, Google, IKEA of Sweden AB, International Paper, Kimberly-Clark, Kruger, Lowe’s and P&G — has the potential to transform the market for responsibly sourced forest products.

As companies race to address climate change, millions of acres of forest across North America and around the world are already managed to FSC requirements. Unlocking the carbon potential from these responsibly managed forests, while also protecting the other values they deliver, offers an opportunity to incentivize responsible practices for landowners, while creating a powerful new way for companies to offset their unavoidable emissions.

If you would like to stay up to date about the research FSC is conducting, sign up for the consultative group here.