Offsetting is no longer enough, we need to mobilise infrastructure change - and fast

It’s no secret that the climate agenda has intensified in recent years, with the UK Government increasingly benchmarking companies on their ESG credentials. Stakeholders are also beginning to put more pressure on organisations to comply, and without a well-rounded strategy in place, many run the risk of losing contracts if they fail to put sustainability at the heart of their operations. In fact, our 2022 Channel Confidence Index uncovered that 10% of respondents in the Technology Channel admitted that they had lost a contract or tender because they could not demonstrate their business’ sustainability commitments.

With sustainability now a priority across the Technology Channel, this number is set to increase in the coming years. In order to address this, many businesses are turning to carbon offsetting, which is defined as any activity that compensates for the emission of carbon dioxide and other greenhouse gases by providing an alternative mechanism for emission reduction. In simple terms, it is the methods that organisations can use to counteract their CO2 emissions, through initiatives such as planting trees or investing in clean-energy projects.

Going beyond carbon offsetting

Whilst carbon offsetting has many positive benefits, it does not focus on changing our ways. This has led to many businesses in the Technology Channel realising that ‘fighting the symptoms and not the cause’ should not be the sole strategy for addressing the significant amount of carbon being emitted by the sector. In some cases, investing in environmental projects around the world in an effort to move closer to net zero means that a company is focusing on something which they have limited control over, and will continue to operate as usual closer to home.

This is where carbon insetting comes into play and has been coined as the missing part of the puzzle for the Technology Channel when looking to balance the sector’s carbon footprint. For instance, with traditional offsetting, organisations may invest resources into a global renewable energy project, but those who choose an insetting approach would look to set up their own project with the help of suppliers. In today’s market, sustainability is no longer something that organisations can claim through small actions or gestures like offsetting; it requires a complete transformation of business processes and even deeper collaboration with partners.

Steps to drive real change

Before embarking on any business journey, the first step is for a business to define its objectives and lay out the necessary steps required to achieve these goals. This could be anything from increasing recycling, maximising resource utilisation or actively investing in new initiatives in the local community. It’s important to be specific about the company’s intentions and measure progress along the way in order to make any informed adjustments to the business’ approach to scope 1, 2 and 3 emissions. Recruiting passionate environmental

employees who can challenge an organisation’s actions will also help drive improvement and identify which actions need to be prioritised.

It’s not enough to only look at the current state of the organisation. Businesses need to create a plan that aligns with their future growth trajectory and the impact that this will have on their emissions. With that in mind, the best option is to reduce the carbon intensity of their operations by establishing reduction strategies and mobilising infrastructure change. This can take effect across a number of areas in an organisation, most predominantly in the business’ supply chain, which links back to the company’s scope 3 emissions.

Reducing emissions across the value chain

Supply chain emissions are notoriously difficult to measure as they are outside of the organisation’s direct control. This has meant many businesses in the Technology Channel are considering changing raw materials to those with lower carbon footprint or CO2 content, using recycled materials, reducing production waste and decreasing the number of inputs. They can also re-evaluate how they transport their products throughout the supply chain and look to change their vehicles to electric fleets. This can then be followed by a reduction in the distance transported goods are taking by making a switch to more local and sustainable suppliers.

Another element includes minimising the end-of-life emissions which occur once the products are no longer viable or used by customers. Whilst these emissions decrease in line with other scope 3 categories, it’s important for businesses to influence the impact by ensuring the products that they put on the market emit lower levels of CO2 during their disposal.

A big part of enhancing the value chain involves partnering with companies in the Technology Channel that share the same sustainability values. Partnering with like-minded organisations is a win-win as it helps to pool resources and share the costs needed to address any ESG demands in the industry. Businesses can look to collaborate with those who share the same values in order to meet ESG targets quicker and more effectively as they embark on the path to creating a sustainable future together.

Driving a greener future

The pressure is on for businesses in the Technology Channel to not only embed ESG practices into their operations, but to act on it, and fast. In line with stakeholder and customer expectations, there is a heightened need to permanently embrace sustained and robust practices that go beyond offsetting. This starts by establishing how to address the organisations’ scope 1, 2 and 3 emissions and collaborating with other businesses that have similar net zero goals, as working together will ultimately contribute to a greener, more stable future for its people, planet and partners.