The role of carbon projects in a decarbonisation strategy

Carbon projects are gaining traction and will play an ever-increasing role in reducing global warming. But how can your company integrate investments in carbon projects in your path to decarbonisation? Read on to learn more.

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Businesses cannot avoid decarbonisation any longer

We are rapidly closing in on the 1.5°C limit. Global warming has reached about 1.3°C, and studies indicate (1) it may reach 1.5°C within the next decade.

The 1.5°C target is still virtually achievable, according to world leaders, activists, and some scientists, but only with an immediate and massive effort to reduce emissions over the next 10 years (2). This is where businesses and organisations come into play. They need to start reducing and counterbalancing their carbon emissions in order to reach these targets and keep our planet a livable place.

Thankfully, regulation is on its way to guide companies to robustly report their emissions and learn how to reduce and avoid them.

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What the path to decarbonisation should look like

The process of decarbonisation is lengthy and intricate, often necessitating the use of an established roadmap. There are many different ways to decarbonise your business, from introducing energy-efficient systems and reducing company waste to ditching petrol cars and investing in a sustainable supply chain. 

It is important to get an accurate picture of your emissions by getting a carbon footprint calculation done. You ought to have a thorough awareness of the carbon footprint your business has across the three categories of direct emissions (Scope 1), emissions from electricity and gas use and others (Scope 2), and indirect emissions from your value chain (Scope 3). Once this data has been compiled, it will be much easier to start searching for where to cut emissions. 

Communicating and sharing publicly the details of your climate targets is an essential step in your decarbonisation process. Attempts by businesses to escape scrutiny and accusations of greenwashing have led to a rising practice known as “green hushing,” in which corporations choose not to publicly disclose details of their climate aims (3). By keeping your progress public you can learn and improve throughout your journey, helping to create a future planet that is habitable for everyone.

Once you have set up a plan for carbon emission avoidance and reduction for your company, including both overall and intermediate targets, you can start investing in carbon projects and credits. They can help you counterbalance unabated emissions in the near term but also contribute to achieving our global 1.5°C target.

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What are carbon projects?

Carbon projects are environmental conservation, energy efficiency, or renewable energy operations that decrease, eliminate, or remove greenhouse gas emissions (GHG) from the atmosphere and contribute to climate change mitigation.

Companies and institutional investors fund these carbon initiatives in order to encourage sustainable development and innovation while contributing to their decarbonisation and sustainability corporate strategies. Their financial assistance supports these project operations and, as a result, compensates for CO2 emissions discharged into the environment which would not be counterbalanced otherwise.

Carbon projects involve a variety of measures in climate change, ranging from ecosystem protection to new or reforested land afforestation to the development of new Carbon Capture and Storage (CCS) technologies.

Not only that, but carbon projects – particularly nature-based initiatives – often deliver a direct impact on biodiversity and local communities, promoting their long-term existence and development. For example, they might boost the well-being of indigenous communities or lessen the negative effects of noise pollution, and help improve air quality, by preserving their natural habitat. These additional benefits are especially important to us since we believe long-term climate action is linked to sustainable development, prosperity, and well-being for all.

What are voluntary carbon credits?

The voluntary carbon market (VCM) is a term that refers to the infrastructure where carbon credits are bought, usually by organisations, on a voluntary basis, rather than to meet legal requirements to reduce emissions (compared to the Compliance Carbon Market). The VCM is then, as of today, driven by voluntary, private activities and is not regulated or imposed by governments.

Voluntary carbon credits can play an essential role in achieving the 1.5°C pathway. They can be used to counterbalance annual unabated emissions in the medium and long term, as well as to contribute to the conservation of biodiversity and natural ecosystems, among other benefits.

In a further step, voluntary carbon credits could be used to compensate for historic emissions. The reason for this is that historic emissions have created CO2 emissions that have been locked in our atmosphere, with the only possibility to remove them through carbon absorption.


How you can decarbonise through voluntary carbon projects

The evidence is clear: immediate action is needed to keep global warming below 1.5°C. You can do this through the voluntary carbon market to counterbalance your emissions. 

When counterbalancing your emissions, it is important to consider the following points:

  • Work with a trusted and regulated partner
  • Choose projects or portfolios that are meaningful to your business and footprint
  • Report on your use of carbon credits 
  • Triple-check claims and ensure they are accurate

The world’s ability to achieve a 1.5°C pathway might very well rely upon the voluntary carbon market and carbon projects getting the financing they need. By aiding in counterbalancing unabated emissions through funding carbon removal initiatives, you are speeding up the transition to a lower-carbon future.

Your business needs to set up a solid decarbonisation strategy that includes specific short-term and long-term targets. Through proactive communication and continuous contribution to high-quality carbon projects, you will be one step closer on your journey towards carbon neutrality.

For further background on key carbon markets terms mentioned in this blog, visit our glossary for an in-depth explanation. 

Callirius is an accessible, transparent, high-integrity and effective marketplace for climate investments. We currently connect project developers from high-impact nature-based climate solutions to large and mid-sized corporate, institutional investors, and buyers for enabling effective climate action. We ensure effectiveness through a science-backed, tech-driven and well-regulated assessment framework, including continuous monitoring and verification. 

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