And as promised, we would like to conclude our sustainability series with a third blog on the subject of communication + reporting and offsetting + financing.

We would now like to give you a few points worth knowing to help you achieve your climate goals.

Hold on a second – this is the third of three parts in our sustainability series, so if you haven’t read the first two, we recommend you jump there first.

Click here for the first two parts: Part 1 and Part 2.

Challenge: Climate communication

Climate communication faces a number of significant challenges that need to be overcome.

One key aspect is the fact that climate protection is an abstract and often complex topic that many people in Germany and Europe easily suppress or ignore. This is also due to the fact that the immediate effects of climate change are not always tangible, making it difficult to convey urgency. To reach people effectively, you have to be aware of this barrier and adapt your communication strategies accordingly.

In order to gain people’s attention and motivate them to act, it is necessary to question and break down established thought patterns and routines. This is best achieved by addressing concrete and tangible aspects of climate change and climate protection that are directly relevant to people’s daily lives. It is crucial to address the emotional and personal level in order to achieve a lasting impact.

Another challenge is to learn from other approaches to climate communication without uncritically adopting established methods. Climate activists run the risk of becoming part of the problem themselves if they limit themselves to abstract facts and figures without putting them into an understandable and everyday context. It is therefore important to develop communication strategies that are both informative and motivating.

New CSRD reporting obligations

The Corporate Sustainability Reporting Directive (CSRD), which came into force in January 2023, replaces the European Union’s previous Non-Financial Reporting Directive (NFRD). The NFRD previously formed the basis for reporting on corporate social and environmental responsibility in the EU.

With the introduction of the CSRD, the EU is aiming to make sustainability reporting in Europe more comprehensive, more uniform and of a higher quality. As part of this, the German CSR Directive Implementation Act (CSR-RUG) from 2017, which transposed the NFRD into national law, is also being fundamentally revised. The aim is to anchor non-financial topics as an integral part of existing reporting practices and to raise sustainability reporting to the same level as financial reporting.

The reporting obligation under the CSRD is gradually being extended to more and more companies. While the NFRD affected around 11,700 companies, the CSRD will cover around 50,000 companies across the EU, including around 15,000 in Germany.

The information to be reported includes, in particular, the business model and corporate strategy. This includes the company’s resilience to risks, its contribution to achieving the 1.5°C target of the Paris Agreement, the consideration of stakeholder interests with regard to sustainability aspects and the strategies for implementing these aspects.

Communicating sustainability sustainably

Effective climate communication should be firmly integrated into your communication strategy, aligned with your goals and values and reflected in your corporate strategy.

To ensure effective climate communication, it is crucial to regularly report on your progress towards climate neutrality and present it in an appealing way. By continuously communicating and showcasing your achievements, you demonstrate that climate action is an ongoing process for you, with room for continuous improvement and growing ambition.

Regular communication underlines the importance you attach to the topic and gives you the opportunity to clarify the various aspects of your motivation. In this way, you can make it clear that your commitment is not a short-term trend, but is deeply rooted in your convictions.

And how else to communicate?

In addition to the choice of language and images, who communicates climate protection and how this is done plays a major role. It is worth finding (new) ambassadors for your climate protection measures or products who tell convincing, personal stories instead of dry facts.

With “storytelling”, for example, you could focus on one of your products. Where does the product come from? How is it made? Who is involved? What emissions are generated during the process and how are they offset? By creating a link between your products and climate protection, the connection becomes more tangible for your target group. Alternatively, you can of course also develop such narratives for the services you offer or other main activities.

In order to appeal to different groups of people, short videos (for example with statements from your employees or interviews with production partners) are a good way to communicate your commitment in addition to text and images.

In principle, however, how you communicate climate protection influences how people think about it. The right framing, i.e. the appropriate embedding of the topic, is therefore crucial. Choose images and words carefully to guide your audience’s perception. Avoid negative depictions and complicated technical terms. Explain concepts clearly and understandably.

Honesty and transparency are key to building trust and credibility. Communicate your goals and progress openly to make your agenda credible and understandable.

Visual language for communicating climate protection

Visual language is crucial when communicating climate protection. Avoid images of lonely polar bears or disasters as these often create a distant or helpless feeling – this has often gone wrong in the past. Instead, use concrete, target group-oriented images that show climate protection activities and local people. This creates proximity and identification. Images from areas such as the circular economy, energy efficiency or innovative technologies help people to imagine a climate-friendly future.

We have found a cool website with a constantly expanding library of suitable image examples for climate communication here.

Now take a quick detour in the direction of compensation and financing and then you’re ready for the next internal steps.

What is a compensation strategy?

In your offsetting strategy, you set out exactly how and to what extent you are offsetting greenhouse gas emissions now and in the future. You can either integrate this strategy paper into your comprehensive climate protection or sustainability strategy or publish it as a stand-alone document.

By taking a strategic approach to offsetting greenhouse gases, you not only secure benefits for your company, but also provide external stakeholders with transparent information about your actions. It is important not to use offsetting as a blanket solution, but to use it specifically as a sensible means of climate protection.

In your strategy, you show which emissions are considered unavoidable after intensive examination despite comprehensive avoidance and reduction measures. Examine each source of emissions to determine whether offsetting is really necessary or whether there are alternative avoidance methods. If offsetting is unavoidable, describe the type of offset certificates you use and the project technologies you support. The location of these projects should also be mentioned. This information is not only of interest to you, but also to your customers and business partners and strengthens confidence in your climate and offsetting strategy.

Another important step is to be transparent about your company’s historical greenhouse gas emissions. These are the emissions that have occurred since your company was founded.

Finally, your offsetting strategy also includes the planning and provision of financial resources for offsetting or additional financing of climate protection projects. A popular way to do this is to introduce an internal carbon price.

Verification of the development impact of compensation projects

Climate protection is only successful in the long term if it is implemented in an integrated manner with other dimensions of sustainability. It is therefore also of the utmost importance for the effectiveness of projects in the voluntary carbon market that they pursue a holistic approach and have a positive impact on other goals of the 2030 Agenda (Sustainable Development Goals – SDGs).

The majority of projects in the voluntary carbon market are registered and certified through standard programs. This gives buyers a certain degree of certainty, e.g. about the methods and criteria used for project development, implementation and monitoring, as well as the registration and retirement of certificates. However, the quality of the standards differs considerably, particularly with regard to the application of environmental and social safeguards and the integration of the 2030 Agenda goals (SDGs).

Climate Contribution Claim

The contribution claim approach offers a model with which companies can support global climate protection through private financial contributions. For example, they set an internal CO2 price for their remaining, unavoidable greenhouse gas emissions. The financial resources generated from this are used to promote climate protection projects in the Global South.

(Notes on “How to set an internal carbon price”: Discussion paper of the UN Global Compacts)

Through this approach, companies contribute to global climate protection without recording the resulting emission reductions in their own carbon footprint or claiming to be “climate neutral”. This model makes it possible to support projects that do not directly lead to a measurable reduction or storage of CO2. However, in the medium to long term, such projects have a greater impact in the direction of climate-friendly change and the necessary transformation towards greater sustainability.

Now that you know that the contribution claim approach offers an innovative way for companies to participate in global climate protection without directly counting this in their own carbon footprint, let’s take a look at a crucial question: What types of offset projects are actually available? What are the differences, and how can companies and individuals make an effective contribution to climate protection through targeted support?

Differences between compensation projects

Offsetting projects differ in three main aspects: the project type, the location of the project and the offsetting standard.

Project type: Different technologies are used to reduce or avoid greenhouse gas emissions. For example, a newly planted forest binds CO2 from the atmosphere and improves local biodiversity, while a photovoltaic system replaces coal power and reduces air pollution at the same time.

Project country: Companies often opt for projects in countries that are part of their supply chain or in which they themselves operate. The choice of project country also influences the social and economic benefits of the project.

Offsetting standard: To ensure that carbon offset projects operate reliably and transparently, they are certified according to specific standards.

In addition, there are special features that further differentiate offset projects:

Project size: the amount of greenhouse gas emissions avoided annually indicates the size of the project. Smaller projects often benefit from simplified regulations.

Projects in LDCs: Projects in least developed countries (LDCs) often receive fee reductions in order to promote climate protection where it is most urgently needed.

Suppressed demand: This approach takes into account the future demand for fossil energy in regions that have not yet built up a climate-damaging infrastructure. Here, renewable technologies can be used from the outset, but this requires clear rules to avoid excessive emission levels.

Additionality as the cornerstone of compensation

How do companies ensure that their investments in these projects actually make a difference?

This is where additionality comes into play – an essential criterion to guarantee the real impact of an offset project.

Additionality means that an offset project would not have been realized without the financing through CO2 certificates. The project is therefore only made possible by the additional money from offset payments. This guarantee of additionality is essential to ensure a real climate protection effect – because a project that would have been carried out anyway does not contribute to additional CO2 reduction.

An example that illustrates the idea of a lack of additionality would be the installation of smoke detectors in residential buildings. In many countries, the installation of smoke detectors is required by law to ensure the safety of residents.

residents. If a residential construction company now claims to be particularly safety-conscious because it installs smoke alarms, it is merely complying with the legal requirements – it is not making any additional contribution to safety. The situation is similar with carbon offset projects: If a climate protection project is required by law anyway, it is not an “additional” measure that needs to be supported by offset payments.

Several steps must be taken to prove additionality: There must be no cheaper alternatives or legal obligations, economic hurdles must be demonstrated, and the project must not already be common practice in the region. Only then can a genuine additional climate impact be guaranteed.

Done 3/3

You now have a solid understanding of how you can strategically approach and successfully implement climate protection measures in your company. From measuring and recording emissions, to reduction and avoidance, to communication and offsetting – each step brings you closer to your climate goals.

We have discussed the most important aspects of climate communication, reporting and the role of offsetting strategies. It becomes clear that transparent and honest communication is essential to gain the trust of your customers and partners. In addition, a well thought-out offsetting strategy and targeted financing of climate protection projects play a central role in your contribution to global climate protection.

Now it’s up to you to put what you’ve learned into practice. Use the approaches described and make climate protection an integral part of your corporate strategy. Through continuous commitment and well thought-out measures, you can not only achieve your own goals, but also make a significant contribution to global sustainability.

Want more?

Would you like to find out more about the topic and would you like to put your heads together? Then we recommend our workshop on sustainability. Incidentally, we go far beyond the topic of greenhouse gases. Have a look. We would be delighted to welcome you!

The post CO2 offsetting, reporting and financing first appeared on Nerd Republic.

Go to part one

Now that you have learned to understand and measure everything about GHG emissions in the first part and could recite the scopes in your sleep, Blog 2/3 answers questions you may have had after the first part, such as:

“What do I do with the knowledge now?”, ”How can I properly apply my knowledge to my business and really make a difference?”

The GHG accounting is complete and you have an overview of your scopes. Now it’s about setting a target based on the assessment and the transparency it provides in order to make continuous progress and improve in terms of emissions. 

Digression – Avoidance vs. reduction vs. compensation

Avoiding greenhouse gas emissions means preventing emissions from occurring in the first place. This can be achieved by avoiding activities or technologies that would release greenhouse gases. Examples of this include avoiding unnecessary business trips or using video-based meetings instead of physical meetings. Avoiding emissions aims to eliminate the source of emissions.

Reducing greenhouse gas emissions, on the other hand, refers to reducing the amount of emissions already being produced. This can be achieved by increasing efficiency, improving technology or changing behavior. One example would be to use the train to the next external appointment instead of an airplane or car, or to offer regional and seasonal products in catering or in the canteen. Reduction means that emissions continue to be produced, but in smaller quantities than before.

Offsetting greenhouse gas emissions refers to compensating for the emissions that have already been produced by taking measures that reduce or bind emissions elsewhere. This can be done by purchasing emission certificates, supporting reforestation projects or investing in renewable energy projects. Offsetting means that the emissions take place but are to be neutralized through compensation measures.

Looking to make a difference? – You need a goal achievement!  

Consistently monitor the implementation of the targets to ensure that they are met. It is crucial to record emissions and all external reductions consistently, completely and transparently – also keyword credibility.

KPIs, for example, can be used to track progress – an effective tool for achieving targets, especially with a clear organizational structure and corresponding incentives.

What is a reduction goal?

A reduction goal describes how much a company wants to reduce its greenhouse gas emissions, over what period of time and in which areas. For effective and comprehensible reduction targets, it is necessary to have measured and calculated the current emissions – a reference to our first blog in the series.

A particularly popular form is to specify a percentage reduction in the target year compared to a base year.

Example: In 2030, you want to emit 50 percent fewer greenhouse gases than in 2024. 2030 is therefore the target year here, 2024 the base year and 50 percent the targeted reduction.

Your climate protection strategy is created

The GHG reduction targets in combination with derived measures form your climate protection strategy. The foundation is the greenhouse gas balance sheet that has already been drawn up. As with the balance sheet, you can initially derive your own measures that will be incorporated into the climate protection strategy, but in the long term there are also providers who can help and advise you.

It also helps to identify the source of emissions that has the greatest avoidance potential. Of course, this is highly dependent on your company and the industry in which you operate. However, there are a few areas where there is often great potential for savings:

• Your electricity supply: Regardless of whether you are heating large production halls or simply supplying your work laptop with electricity – you need energy in any case. Switching from fossil fuels to renewable energy sources is simple, quick and extremely effective in making your energy consumption sustainable.
• Your transportation: Transportation plays a key role in the greenhouse gas balance, and not just for freight forwarders and logistics companies. Service companies also generate relevant transport emissions through business trips and their employees’ commutes. In addition to switching to electromobility in the vehicle fleet, the promotion of climate-friendly means of transportation can also make an important contribution. For example, business trips can be made more sustainable by specifying in travel guidelines when trains should be used instead of planes. Subsidies for public transport or company bicycles motivate people to leave their cars at home more often, especially in cities. In addition, transport companies and bicycle leasing providers often offer attractive conditions.
• Your waste management: The core principles for sustainable waste management are: 1) Avoid, 2) Reuse, 3) Recycle, 4) Dispose. Consistent application of these principles conserves resources and promotes the circular economy.

Climate protection strategies can take various approaches.

A climate neutrality strategy aims to achieve climate neutrality by avoiding, reducing and offsetting remaining emissions.

Net-zero strategies are based on science-based targets that are in line with the 1.5° target of the Paris Agreement, whereby you focus on avoiding and reducing your own emissions.

A climate finance strategy is based on an internal carbon price for emissions, which generates financial resources for investments in climate protection measures and projects.

These steps together form your climate protection strategy, which you should publish to show your customers, business partners and potential employees that you take climate protection seriously and ensure transparency and traceability of your measures.

Now that you know the different approaches to avoiding, reducing and offsetting greenhouse gas emissions, it’s time to take concrete action. Your climate protection strategy should include clear goals, a plan for implementation, a strategy for measuring success and regular reporting. Make sure that all employees are involved and that you continuously adapt your strategy to stay up to date.

In the third part of our series, we will focus on the latter – how can you communicate and report effectively? We will also briefly touch on the topic of offsetting and financing and show you how you can use these instruments in a targeted manner to achieve your climate goals.

Stay tuned and make the difference – every step counts on the road to a more sustainable future.

If you haven’t read the last part of our series yet, click here. 

Want more?

Would you like to find out more about the topic and would you like to put your heads together? Then we recommend our workshop on sustainability. Incidentally, we go far beyond the topic of greenhouse gases. Have a look. We would be delighted to welcome you!

The post Avoid and reduce CO2 emissions first appeared on Nerd Republic.

In the Paris Agreement, the international community set itself the goal of limiting global warming due to climate change to below 2°C, or even 1.5°C if possible. In order to reduce greenhouse gas emissions, it is first necessary to take stock of our own emissions. To do this, the main sources must be identified and the level of emissions calculated.

Because you can’t control what you don’t measure.

Just like individuals, companies emit greenhouse gases (GHG) – and not just too little. However, not all emissions are immediately visible, as many are generated along the supply chain.

There are three scopes in which companies or organizations emit greenhouse gases (GHG). These scopes are referred to as “scopes” and the company-related GHG emissions are divided into them for calculation purposes.

When reporting in accordance with the GHG Protocol (Greenhouse Gas Protocol) – the GHG Protocol is one of the most widely used international standards for calculating company-related greenhouse gas emissions – Scope 1 and 2 emissions must be recorded. The recording of Scope 3 emissions is voluntary.

What’s behind the GHG scopes?

Scope 1: 
#Direct emissions – This is the view of emissions that come directly from the scope of the company

Example:
Think of the clouds of smoke over factories, the exhaust fumes from vehicle fleets or the exhaust fumes from offices. It’s about what we release directly into the environment.

Scope 2:  
#Indirect emissions from the use of energy purchased by the company – This is about the hidden emissions caused by a company’s energy consumption. Caution: If the company generates the electrical energy it uses itself, this electricity is not recorded under Scope 2. Instead, the fuel used is accounted for as Scope 1 (direct) emissions.

Example:
Think of the electricity we use, the heat we generate or other energy sources that may not end up directly in our products, but still drive our business activities.

Scope 3:  
Other #Indirect emissions – This scope goes beyond direct and indirect emissions and considers a company’s other impacts on the environment. In other words, emissions resulting from activities that are not directly attributable to the company.

Example:
This can include energy consumption along the entire value chain, transportation emissions, external waste disposal or business travel.

Would you like to see examples of emission sources within the scopes for different economic sectors or get to know the standards of the scopes in more depth? You can find the complete standard here (GHG Protocol Corporate Standard).

What happens after the scopes have been identified?

And now? You roughly know how to separate scope 1, 2 and 3, but what do you do with this knowledge?

Well, first of all: check, step 1 is done. You have created awareness and are facing up to the issue. Now to step 2: measuring and calculating your emissions. Before you can move on to step 3, avoidance and reduction. Then come steps 4 and 5: communicating and reporting as well as offsetting and financing. But everything step by step – here’s a reminder: keep an eye on our blog! Steps 3, 4 and 5 will be starting soon and will be covered in detail here soon!

We remember the sentence from the beginning: You can’t control what you don’t measure!

Types of accounting for GHG emissions

The corporate carbon footprint (CCF) is important for companies. It includes all emissions caused by or in connection with the company’s activities.

The Product Carbon Footprint (PCF), on the other hand, focuses on the emissions of a product during its manufacture, use and disposal. Companies often use the PCF results of their products, for example as input for the CCF in the category “Use of products sold” in the area of supply chain emissions. These results also serve as a source of information for a climate or broader sustainability strategy.

Emissions calculators can be used to calculate the GHG emissions of the entire organization as well as the products. We would like to take this opportunity to introduce you to a few B Corps friends who can help you with this project:
https://clevel.co.uk/
https://gatewayprocurement.co.uk/software/
https://northstarcarbon.com

As already mentioned, it is strongly recommended that Scope 1 and 2 emissions are accounted for in a greenhouse gas balance sheet. Scope 3 emissions are usually optional in accordance with the GHG Protocol, but should be accounted for in order to effectively protect the climate.

Pay attention to the following principles in greenhouse gas accounting

Relevance: Record and ensure that all relevant greenhouse gas emissions of your company are realistically reflected. Assess the emission sources in the value chain in terms of their significance in order to decide which should be included in the accounting.

Completeness: Consider all sources and activities according to the chosen calculation method and the defined system boundaries. Justify and document each exception transparently.

Consistency: Use consistent methods to keep your results comparable over the years. Transparently document any changes to your data or deviations from the methods.

Transparency: Disclose all assumptions made and document the calculation methods and data sources used accurately and comprehensibly.

Accuracy: Make sure that the calculated emission values are not systematically over- or underestimated.

Want more?

Would you like to find out more about the topic and would you like to put your heads together? Then we recommend our workshop on sustainability. Incidentally, we go far beyond the topic of greenhouse gases. Have a look. We would be delighted to welcome you!

The post Balance CO2 emissions and understand scopes first appeared on Nerd Republic.