CO2 compensation: This is how climate neutrality works in companies

Protecting our planet concerns us all. That is why climate protection is becoming increasingly important – and more urgent – ​​not only in private life, but above all in business. Until companies can only produce in a climate-neutral manner, CO2 compensation is a useful instrument for achieving climate neutrality in the company.

But how can climate compensation work in companies? Why is it so important and which climate protection projects are suitable for it? In order to be able to understand the extensive topic, we want to go into more detail about CO2 compensation and also explain what to look out for when buying a sustainable, climate-neutral or even climate-positive product.

Carbon neutrality and climate positivity: definition and differences

The topic of climate neutrality and climate positivity is becoming more and more important these days. But when does one start talking about climate neutrality and when does it turn into climate positivity? And how is a climate-neutral or climate-positive company defined?

For a basic understanding of climate protection in companies, it is therefore helpful to first clarify various terms.

Climate neutrality means that a company offsets its CO2 emissions with the help of purchased emission certificates, which can be invested in certified offsetting projects - this offsets the amount of CO2 emitted in the form of climate protection projects. A climate-neutral company therefore causes neither negative effects on the climate nor does it contribute to improving the quality of the environment.

We speak of climate positivity when a company no longer just compensates for its own CO2 savings, but also offsets more greenhouse gas emissions than it causes. With the help of a climate-positive economy, for example, the goals of the Paris climate agreement, such as limiting global warming to 1.5°C (in relation to the pre-industrial era), can be supported.

Climate compensation in companies: That's why it makes sense

The clock is now five past twelve. Our daily actions continuously cause new greenhouse gas emissions: from high power consumption to our eating habits to the various means of transport such as cars and planes. In addition, economic production processes for consumer goods are also a factor in daily CO2 emissions that cannot be ignored.

Since the topic of sustainability and climate protection is becoming more and more present, companies are faced with the challenge of not only making their shopping experience attractive for their customers, but also having a positive effect on the environment and thus leaving a small ecological footprint. We at Recozy take on this task and also design beautiful and at the same time sustainable products.

CO2 compensation is an important step towards environmental protection in business. With more and more companies compensating for the greenhouse gases they emit by financing climate protection projects, forests can be reforested or clean energy promoted, for example. It is important to note that CO2 compensation is compensation. This means that as soon as a company offsets its CO2 emissions, it still emits greenhouse gases into the atmosphere. In order to counteract the negative environmental effect and not increase global warming as a result, support for climate protection projects results in mathematical neutralization and a company is therefore considered climate-neutral.

CO2 compensation can thus have a supportive effect on environmental protection, but should not be understood as a kind of panacea. To make a significant difference, more greenhouse gases must be offset than are emitted. In addition to compensation, companies can also make a contribution through additional commitment. In private, buyers can also make a decisive contribution with their purchasing behavior by paying attention to which companies support climate protection projects and how transparently they communicate their climate protection promises.

Sustainability strategies: How can companies become climate neutral?

Basically, avoiding and reducing greenhouse gases takes precedence over compensation. Therefore, on the way to climate neutrality, companies should primarily rely on a holistic sustainability strategy with innovative avoidance or reduction measures and consider CO2 compensation for emissions that cannot yet be avoided.

These include, among others:

- Production that is as local as possible and short supply chains

- The use of recycled and innovative materials

- An energy and resource efficient manufacturing process

- Focus on the circular economy and the associated recycling of our own products

- Climate-neutral shipping and use of recycled packaging materials

How does CO2 compensation work in companies?

In order for a company to be able to achieve climate neutrality with the help of CO2 compensation, its own emissions, which are caused by all internal company processes, must first be calculated . This is where the Greenhouse Gas Protocol comes into play, which is defined as a standardized accounting that calculates greenhouse gases for the first time. In this way, the different gases such as carbon dioxide (CO2), nitrous oxide (N2O; also laughing gas), methane (CH4) and water vapor (H20) can all be taken into account, converted and summarized in a CO2 equivalent . This standardization is very important, because the calculated measured value reveals the extent to which the emitted greenhouse gases affect global warming (in a fixed period of 100 years).

In the accounting, the direct emissions ( Scope 1 ) – i.e. the greenhouse gases that a company emits directly – and the indirect emissions ( Scope 2 ) – i.e. the greenhouse gases that are imported into the company through electricity and heat generation, for example – calculated. Scope 3 also includes indirect emissions that occur along the value chain - these can be offset optionally, but also make up the lion's share of the GHGs generated by companies, since business trips, transport and much more are included. After the balance sheet has been prepared, which can be viewed both internally and externally, the precise definition of the measures and goals to what extent the company can save and reduce emissions. This is followed by compensation using offsetting standards - more on that later.

So-called emission certificates are then purchased either on an international trading market or directly from climate protection projects in which CO2 is bound or saved. These can be, for example, reforestation or compost projects, but also renewable energy projects such as solar power or hydropower. One certificate corresponds to the amount of one tonne of CO2 equivalent . Where this project is located is irrelevant - for the climate it is not decisive where emissions are emitted or saved, since greenhouse gases are distributed worldwide in the atmosphere.

Numerous climate protection projects that have a positive impact on the environment and society can only be funded and implemented on the basis of the compensation payment from the company. There are a variety of different projects that companies can support...

- Renewable energy projects such as solar energy, hydroelectric power, wind energy and also biomass, biogas or geothermal energy

- Social or community projects such as access to clean water or the construction of cooking stoves

- Forestry and nature conservation projects aimed at reforestation of forests, prevention of deforestation or renaturation of moors

Many of these climate protection projects are implemented in countries of the Global South and make a relevant contribution to sustainable development locally. In addition, supporting these projects promotes not only the positive effects on the global climate but also social development in the respective countries. On the one hand, companies from industrialized countries are not only committed to protecting our environment, but on the other hand they also make a decisive contribution to the social and economic development of developing countries.

How can the impact of compensation projects be ensured?

In order to create a standard of transparency and credibility for the respective projects, international rules specify in detail how climate protection projects are to be carried out. Based on these quality standards, the climate effectiveness is documented and guaranteed, and companies can use these so-called offsetting standards (derived from carbon offsetting = CO2 compensation) to recognize the specific benefit of a specific project. These include, for example, the disclosure of annual reports or whether the providers of the climate protection projects were involved in the project development.

Important offsetting standards are, for example, the official standard for emission certificates , the Gold Standard for the Global Goals, the Fairtrade climate standard and the Verified Carbon Standard.

Of course, there are also many small climate protection projects and non-profit organizations that do not (yet) have international emission certificates and still make an important contribution that is worth supporting. Seals such as the GuideStar seal for transparency can provide an indication that the investment in climate protection is in the right place.

CO2 compensation at Recozy - This is how we make our contribution

Companies that are committed to climate neutrality and climate positivity and thereby promote climate protection take responsibility for their internal management and support sustainable development. We at Recozy also make our contribution to promoting environmental protection and we would like to go beyond climate neutrality and become a climate-positive company in the future.

Our products are made from innovative and recycled materials - we rely on circular economy . We only use residues that are no longer used. In addition, we not only reduce the resulting CO2 emissions by ensuring short supply chains, but also manufacture our goods in additive manufacturing processes in our own digital manufactory on site in Germany. Production using 3D printing ensures high energy and resource efficiency - in addition, all products are only produced on demand . This means that they are only made when our customers order them. At the end of their lifecycle, they can be returned to us free of charge and recycled to complete the circular economy. Our goods are packaged sustainably and shipped climate-neutrally with DHL GoGreen .

Recozy is already considered to be climate-neutral, which is why we work together with Climate Partner , with whose help we offset all emissions through certified climate protection projects. So you can shop with a clear conscience: For every designer piece sold, we finance a small part of an environmental protection project.

But we're not perfect yet. We are pursuing the goal of further reducing our emitted greenhouse gases and keeping our ecological footprint as small as possible. To this end, we and our partners are researching methods of how we can process and recycle other waste materials such as marine waste. Our mission: We not only want to compensate for our CO2 emissions, but also avoid them as far as possible and also make an active contribution to climate protection by becoming a climate-positive company in the near future.

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