Carbon offsetting can sound complicated, particularly for small businesses that don’t have a dedicated sustainability team or a large budget.

But the basic idea is actually quite simple.

Carbon offsetting allows a business to take responsibility for some of the carbon emissions it produces by supporting projects that reduce or remove greenhouse gas emissions elsewhere.

In this guide, we’ll explain what carbon offsetting means, how carbon credits work and why small businesses may choose to use them.

What is carbon offsetting?

Most businesses produce carbon emissions in some way. This could come from heating and powering premises, business travel, deliveries, manufacturing or the products and services they purchase.

The first step should be to look for practical ways to reduce these emissions where possible.

However, reducing every emission isn’t always realistic. Carbon offsetting can be used alongside these reductions to take responsibility for emissions that remain.

Businesses do this by purchasing carbon credits connected to projects designed to reduce or remove greenhouse gas emissions.

What are carbon credits?

A carbon credit represents a measured amount of greenhouse gas emissions that has been reduced or removed through a climate project.

Businesses can purchase carbon credits to compensate for emissions associated with their activities.

Depending on the provider, these credits can support different types of projects, including renewable energy, forest protection and tree planting.

How does carbon offsetting work for a small business?

Carbon offsetting doesn’t have to mean creating a complicated sustainability strategy overnight.

A small business can start by looking at where its emissions are likely to come from and identifying areas where reductions can be made.

This could include reducing energy use, cutting unnecessary travel, choosing more sustainable suppliers or reducing waste.

The business can then choose to purchase carbon credits to take responsibility for emissions that it cannot currently avoid.

The important thing is to see offsetting as part of wider environmental action rather than a replacement for reducing emissions.

What are the benefits of buying carbon credits for your business?

For small businesses, purchasing carbon credits can provide a practical way to start taking environmental action without needing a large sustainability department.

It can help your business:

• Take responsibility for emissions that are difficult to avoid
• Support environmental and climate projects
• Demonstrate environmental action to customers and stakeholders
• Work towards wider sustainability goals
• Start taking action while continuing to reduce emissions over time

It can also provide evidence of the action your business has taken, particularly when your carbon credit provider supplies certification or documentation.

Is carbon offsetting greenwashing?

Carbon offsetting itself isn’t necessarily greenwashing, but problems can arise when businesses use carbon credits to make environmental claims without taking steps to reduce their own emissions.

A responsible approach is to reduce emissions wherever reasonably possible first, then use carbon offsetting to take responsibility for emissions that remain.

Businesses should also be clear and accurate when communicating their environmental actions. Rather than making broad claims such as being “green” or “carbon neutral”, explain what your business is actually doing, such as reducing energy use or purchasing carbon credits to support verified climate projects.

Is carbon offsetting expensive for small businesses?

Not necessarily.

The cost will depend on how much you choose to offset and the type of carbon credits you purchase.

Small businesses don’t have to do everything at once. You might choose to start with a particular activity, service or period of business operations and build from there.

A flexible approach can make carbon offsetting more manageable for SMEs that are just beginning to think about their environmental impact.

How can a small business get started with carbon offsetting?

Start with what you can realistically do.

Look at where your business produces emissions, identify opportunities to reduce them and consider how carbon offsetting could support the action you’re already taking.

At eTrees, we’ve designed our carbon offsetting service to make this process straightforward for small businesses.

You can purchase carbon credits on a pay-as-you-go basis, with no contracts, and receive certification as evidence of your environmental action.

Want to find out how carbon offsetting could work for your business?

Explore eTrees or get in touch with us to learn more about getting started.