Credit where credit’s due – but carbon reduction needs a united front

An article in the Financial Times earlier this week reported that the EU’s carbon price has climbed above €100 per tonne for the first time. The price of carbon has increased five times over in the past three years, fueled by newly agreed carbon pricing rules and wider societal pressures. Business focus quickly turns inward as they rush to uncover how current practices will be impacted.

A carbon credit analysis

The world of carbon credits is complex, not unlike the $400bn digital ad industry itself. So, conversations taking place in relation to the two are igniting a desire to learn and gain a better understanding.

Abundant with unfamiliar acronyms (RECs, SBTi, TIST to name a few) and an overwhelming ‘Lumascape’ of its own, it’s not surprising that brands aren’t fully confident in their course of action when it comes to sustainability. At the end of the day, no one company has all the answers. Even operating a business directly tied to sustainability, I collaborate closely with experts in the space to help shape what we do at Scope3 and ensure our efforts are grounded in science.

That said, the complex nature of the industry – as well as the ongoing critique of carbon credits – should never deter businesses from establishing a thorough decarbonization strategy. Carbon credits are, after all, an important step to achieving net zero – but they are not, and should not be, the only piece of the puzzle.

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If we want to meet our international goals around sustainability, like those that make up the Paris Agreement, there are a few things we need to align on first as an industry. Setting high standards for every part of a thorough decarbonization strategy – measurement, reduction, and offsetting (which is where carbon credits come in) – is essential.

Measurement

The industry is making inroads around carbon measurement, with groups already working on the technology protocols and policies to guide best practices. For example, there are still big questions about where consumer device emissions should be considered, how we should fold together creative and media production, and what boundaries we set for ad delivery emissions. Equally, the industry needs to agree on how advertised emissions factor into the wider lifecycle.

There are still questions left unanswered, but getting everyone on the same page will benefit the overall industry strategy toward decarbonization.

Reduction

Carbon credits should never replace a thorough strategy to reduce emissions across the supply chain. Striving for genuine reduction is where most business time should be spent.

As measurement numbers start to roll in, companies will have a baseline for how they can improve. These baseline standards may well shift as the measurement is refined, however, we’re already seeing action taken to identify and eradicate the ‘high carbon’ inventory. The three simple steps for businesses to follow are: identify waste, eliminate it and optimize towards low-carbon media.

Offsetting

Carbon credits fall into the category of offsets, but a better way to think of these is your climate contribution. One of the current issues is that some carbon credits are not founded on scientific facts, while others don’t do enough. All credits moving forward must therefore be sourced and vetted appropriately. So thinking specifically about removal projects, the credits must offer a new and additional way of actually removing carbon from the atmosphere.

At Scope3, we set the price of carbon at $100 per metric ton based on UN guidance – this method of pricing helps to incentivize reduction elsewhere. Pricing is probably one of the biggest areas where the industry needs to align around – we cannot accept cheap carbon credits. If our carbon floor is too low, we risk investing in worthless projects that would render our actions meaningless.

Time is running out

At the end of the day, we cannot lose sight of the fact that the world is at a tipping point.

Carbon dioxide and other greenhouse gases (GHGs) are causing the global temperature to rise. There is increased urgency from governments, the UN, scientists, and activists to trigger genuine change. We have reason to be pulling every lever we can, in every industry across the globe, to reduce the amount of CO2 and CO2e we are releasing into the atmosphere.

It’s impossible to ignore our contributions as an industry to the climate crisis, and now it’s our time to act.

Anne Coghlan is co-founder and COO at Scope3.