Organizational Governance

Can Being Climate Neutral Become the New Normal?

Gold Standard’s Sarah Leugers recently chatted with entrepreneurial leaders at Allbirds and Peak Design to discuss their climate-neutral commitments and the value this creates for their brands.

Sponsored Content | / This article is sponsored by Gold Standard | By Gold Standard | Published 5 years ago | About a 10 minute read

Image: Allbirds

Hana Kajimura, Sustainability Manager at Allbirds

Peter Dering, CEO of Peak Design and Founding Director of Climate Neutral

Sarah Leugers, Director of Communications for Gold Standard

Peter Dering, CEO of Peak Design, recently launched Climate Neutral — an NGO that helps companies to measure, reduce and take accountability for their carbon footprint and tell that story to their stakeholders. Allbirds, makers of “the world’s most comfortable shoes,” is one of its first recruits.

Sarah Leugers: What motivated you to commit to being climate neutral?

Hana Kajimura, Allbirds: Making things inherently comes with a carbon footprint. Though ours is much lower than most, due to our use of natural materials and sustainably minded businesses practices, the process of building and selling our products does emit CO2.

We recognized that any footprint was too large. The least we can do is be accountable to our environmental impact today. So, this year we launched the Allbirds Carbon Fund — an internal carbon tax that funds emissions-reduction projects. This fund accounts for every ton of carbon our business emits, from the sheep on the farm to the lightbulbs in our factories, to ensure that Allbirds is truly 100 percent carbon neutral.

Peter Dering: Peak Design has also always been mindful of our responsibility to the environment. Our mission cites offsetting our environmental footprint as one of six principles that are core to our responsibilities and to the motivation of our team.

We’ve been members of 1% for the Planet for six years; and prior to 2018, we considered that 1 percent of sales contribution to the environment as fulfilling our responsibility. However, in early 2018, after a production trip to Vietnam, where I was witnessing the amount of material that went into our now booming backpack business, I was curious to know just how much carbon Peak Design is responsible for. I honestly had no clue what this number was, and I don’t think many business owners actually have an idea of how large their footprint is.

I discovered that even by very liberal accounting (estimating on the high side), our annual carbon footprint was 20,000 tons. When I then learned that the average price of a carbon credit in 2017 was around $3 per ton, I figured that Peak Design could offset our entire footprint for $60,000 on $30 million of business — only 1/5 of 1 percent of revenue.

Even if we bought credits for $10 — which we learned is a more sustainable carbon price to maintain and expand climate projects — that’s only 3/5 of 1 percent of revenue.

Climate is an urgent-enough issue that I was convinced that every company has a moral imperative to do something about it. Because not cleaning up your carbon is polluting for free.

SL: What value does this create for your brand? What does it communicate to your customers, and how have they responded?

HK: Though there is a growing interest in environmental issues from consumers, it rarely influences purchasing decisions. When push comes to shove, consumers aren’t willing to buy a subpar product just because it’s sustainable — and we don’t think they should have to. This is why Allbirds first and foremost focuses on making the best product we can, and then we work out how to make them as sustainably as possible. The Carbon Fund is the latest, and perhaps biggest, way we’ve tried to take the bulk of the responsibility off of consumers and put it back on businesses.

Image credit: Allbirds

All that being said, we do know that there is a growing movement of consumers who are demanding a change. Many are frustrated by the increasing number of brands that are adopting the language of “sustainability” without actually investing in solutions that are better for the planet. Being 100 percent carbon neutral is a powerful sign to these consumers that we put our money where our mouth is around sustainability.

SL: We know some people aren’t clear about the role of carbon offsetting in the bigger picture of global decarbonization. What do you say to the haters?

HK: ‘Carbon offsetting’ may sound complex, but the idea is actually quite simple. For every ton of carbon we produce as a company, we put money into projects that reduce or remove carbon elsewhere. We did a significant amount of research and consulted experts to make sure we’re working with climate-protection projects that are reputable, effective and scientifically proven. Companies have all the tools they need to invest in projects that are meaningful and impactful — from third-party certifications, to NGOs and consultants to help vet further; they can even go visit projects if they want to!

There is no silver bullet or perfect solution, but the climate crisis is too urgent not to throw everything we have at it. While we’re definitely still working to drive down our emissions as a brand, financing emission reductions beyond our corporate boundaries by buying carbon credits is a meaningful way to hold ourselves accountable for our current footprint.

SL: Peter, do you agree?

PD: Well, I think there are two types of haters. There are the ones that say, you shouldn’t be able to pay someone to clean up after you. To those haters, I say … Bull$&!t. Once you’ve reduced all the carbon you can, you should have to pay someone to clean up after you.

To those haters who claim that offsetting isn’t effective … This is trickier. Some carbon credits make more of an impact than others, depending on different technical requirements, project types, whether they also deliver development benefits, etc.

But the fact of the matter is that carbon is a universal asset, and it can be offset. We can do this by restoring ecosystems. By helping people in the developing world get access to clean water and energy. By planting and maintaining mangroves and sea grasses.

The most important players in the game are the standards who set the rules and the entities doing the verification of climate-protection projects. Their rigour is critical to ensuring the market effectively speeds up the shift to clean energy and healthy ecosystems.

This is where Gold Standard and the others come in. The work that they do is absolutely paramount. I’m not just saying this because I’m talking with Gold Standard — the entire market is entirely dependent on them to earn and keep the trust of the public, of governments, and of the corporate world.

Peak Design CEO Peter Dering created the Climate Neutral label to help customers identify and reward brands that take full accountability for their GHG emissions | Image credit: Peak Design

SL: You’re both young and, dare I say, ‘hip’ brands. Do you think this makes you better positioned to make this move?

PD: Hey, you said it, not me. We’ll take that any day. And does it help? Sure, in some ways it helps. Hopefully we can get people inspired as we have been able to do with our products.

But it can work against us, too. We are out there trying to convince Fortune 500 companies that they need to put meat on the bones of their sustainability strategy, and it includes this very bold action of offsetting all the carbon they emit. But Coca-Cola is probably less willing to listen to an organization with our youthfulness.

Our hope to mitigate this is that we will find some venerable brands that are willing to take the plunge, which will hopefully be the icebreaker we need to turn the tides. We shall see.

HK: Agree. Being a young and agile brand means that we’re not stuck in our old ways and we can adapt quickly when new solutions are available. We understand that larger, established companies have more entrenched supply chains, which makes it difficult for them to adopt these kinds of changes — that doesn’t mean, however, that should be an excuse to do nothing. We are in an extraordinary moment in history when inaction is no longer an option, and it’s the brands that are embracing sustainability now that will win in the long run.

SL: Peter, what changes do you hope that both Peak Design’s commitment and Climate Neutral’s bigger ambition make over time?

PD: That’s such a big question. Maybe it’s best answered through this analogy. Every Tuesday night, I go down to the curb and put the trash, recycling and compost bins on the curb. I have an expectation that I am responsible for paying someone to take care of my refuse.

It is my hope that every company and organization, and perhaps even every individual, will one day realize that greenhouse gases, though invisible, are no more permissible to dump into the public domain than ordinary trash.

Until we figure out how to make the modern economy work without emitting carbon, the least we can do is count the carbon we do create, and take reasonable efforts to eradicate it.

Climate Neutral creates a binary statement of answering the question: “Did you take responsibility for your carbon?” When that answer is yes, as evidenced by our Climate Neutral label, it gives a clear message that thoughtful customers can easily get behind. Customers are stoked, and want to spread the message.

SL: What message or advice do you have for other companies?

HK: Becoming carbon neutral may seem like a huge, unreachable goal, but we were able to break it into a few smaller steps that made it easier to tackle. First, we focused on measuring our footprint through life cycle assessments (LCAs). This is hugely important, since you have to know what your current emissions are if you’re going to offset and improve them. If you’re part of a brand that’s interested in becoming more sustainable but don’t know where to start, investing in LCAs — or building a product carbon calculator like we did — is a great first step. Similarly, organizations like Climate Neutral are making it easy for companies to take action on climate by building a tool to help companies measure their footprint.

We then source offsetting and insetting projects that we and our customers are excited about. Importantly, however, we won’t stop there — since we treat carbon as a line-item expense, we’re further incentivized to innovate more sustainable solutions that will continue to lower our footprint. In short: Our strategy is to measure, reduce and offset.

SL: That’s an important point: Offsetting your carbon footprint is essentially levying a voluntary carbon tax on yourself, helping to finance the transition to a resilient, climate-secure world. Peter — closing words?

PD: I mean, it’s pretty simple. If you’re not aware of how much carbon impact you have, measure it. We can help. Once you’re aware of that footprint, take whatever steps you can to reduce it, but know that you will not be able to reduce the majority of it. And the last piece of advice? Offset the rest.

If you believe that climate change is real, and you want to do something about it — then, what are you waiting for? Play your part.