Like many Americans, Michael Steiner, executive vice president at Ovation Travel Group, feels the pull of today's environmental movement. He reads the papers; he's seen An Inconvenient Truth; he knows that a curb on greenhouse gases is needed to limit the scope of global warming. But it took a trip to Budapest last fall to finally get him to put climate change on his company's agenda.
In mid-November, about the time the New Oxford American Dictionary announced its choice of “carbon neutral” as the 2006 Word of the Year, Steiner traveled to Hungary to meet with leaders from a consortium of 80 international travel companies, of which Ovation is a member. Corporate social responsibility, including carbon-reduction initiatives, was among the dominant topics at the meeting, and U.S. companies, he noted, were clearly behind in their thinking. European companies especially he saw “leading the charge in terms of.”
The eye-opening discussions led Ovation to two decisions that were announced in January: First, the company tallied its employees' 2006 business travel — about 800,000 flight miles in all — and purchased carbon offsets equal to the greenhouse gas emissions of those flights. Second, it set up a program called Ecovation to make it easier for its clients to do the same.
The Onset of Offsets
Ovation is part of a tide of organizations buying carbon offsets as a relatively easy and cost-effective way to join the fight against the increasingly urgent problem of global warming. In brief, offsetting is the process of balancing the greenhouse gases produced by flying, driving, heating and cooling buildings, and even flipping on the lights, by reducing an equal amount of atmospheric carbon dioxide elsewhere. The reductions are achieved by funding projects such as reforestation or renewable energy sources such as wind or solar power.
The voluntary carbon-offset industry is growing fast, with many celebrity clients raising its profile over the past year. For example, at the Academy Awards in February, presenters received offsets from TerraPass Inc., Menlo Park, Calif., in lieu of most of the usual swag. John Edwards' presidential campaign in March pledged to go carbon neutral, followed in April by a similar announcement by Hillary Clinton's campaign (both are offsetting through NativeEnergy, Charlotte, Vt.). And earlier this year a new British airline, Silverjet, launched as the first carbon-neutral airline. The London-to-New York carrier includes a mandatory carbon offset contribution in the ticket price, which is invested through The CarbonNeutral Co., London.
More than 30 organizations now work as middlemen between green projects that need funding and the people who want to run low-carbon or carbon-neutral homes and businesses. Ovation is offsetting its company travel through Carbonfund.org, Silver Spring, Md., whose customers also include Calvert Group Ltd., which specializes in socially responsible investing; WineCommune LLC, which is offsetting the carbon emissions caused by its shipping and receiving, travel, electricity, and employee commuting; Boston Trust & Investment Management Co.; Yakima; and many more.
While Ovation's offset is a modest effort to combat a massive problem, Steiner is optimistic. “If every business would make a decision to take some steps, it moves us in the right direction.”
Environmentalism in RFPs
It's also a good business decision. More and more, Steiner says, requests for proposals submitted to Ovation from multinational corporations make it clear that those companies want to work with vendors that have social responsibility programs, and carbon offsets can play a key role in those programs. Mixing social and environmental issues with procurement, he says, is a trend that's strong on RFPs coming in for Ovation's corporate travel services but isn't yet a factor on RFPs for the approximately 500 meetings and events the company handles each year. He suspects, however, that it's only a matter of time.
Marshall Calder, senior vice president of marketing at The Leading Hotels of the World, a New York-based hotel marketing organization, agrees. Calder's company represents 440 properties around the world, and in the latestseason, 70 percent to 75 percent of the RFPs coming in from corporate travel managers included questions about properties' environmental policies. The unknown, he said, is how much weight a company puts on those answers, but clearly the topic is gaining importance.
For Leading Hotels and its properties, a new program launched in April is at least part of the answer they can provide to those RFP questions. Working with Sustainable Travel International, a nonprofit offset provider based in Boulder, Colo., Leading Hotels' new Leading Green Initiative pledges to offset the energy use of every stay at its properties. The company is spending 50 cents per guest room, per night, to offset the estimated 33.7 pounds of CO2 generated by the electricity, heating, cooling, cleaning, kitchen use, and so on for an average hotel guest night. The program, Calder notes, is funded by Leading Hotels, and room rates are not inflated to pay for it.
Appropriately, the company meeting that kicked off the Leading Green Initiative was entirely offset. Leading Hotels worked with STI to calculate the carbon footprint of the three-day, 175-person meeting in Stockholm, Sweden, including the CO2 produced by the flights, guest rooms, and meeting space, which came to almost 700,000 tons. That impact was offset by purchasing 152 emission-reduction credits and 239 green tags. (See next page.)
Getting Your Point Across
Organizations are increasingly offsetting high-profile meetings and events, both as a step forward for the environment and to take a leadership position in their industries — a visible way to walk the talk. For the Association of Corporate Travel Executives, Alexandria, Va., it's all that and a way to raise attendee awareness.
“For us, it's an education tool,” says ACTE Executive Director Susan Gurley. “Europeans were talking about this much earlier than the U.S., and now China is getting more interested.”
ACTE, which has 2,500 corporate travel members in 50 countries (and is increasingly addressing meeting-management topics), first brought social responsibility and environmental issues to its 2005 general session in Vancouver. The reception, says Gurley, was tepid at best. “I was asked, ‘Why is ACTE talking about this? It's not in my job.’ People felt that we'd gone off our mission as an industry organization,” she says.
Despite the feedback, Gurley and the ACTE board persevered, offering several sessions on social and environmental responsibility at its Global Education Conference in Barcelona in October 2006. “One of the things we provide as an industry organization is a view of trends. And we believe this is coming,” Gurley says. Taking its commitment a step further, the association decided to offset the CO2 from the Barcelona event, calculating energy use in detail. It has a record not just of room nights, meeting space use, and where attendees flew from, but also motor coach use, including how many attendees per coach and how many minutes each way. Working with New York and London-based offset provider Climate Warehouse Ltd., 730 tons of CO2 were offset from the Barcelona event.
Gurley says she still got some resistance from attendees in Barcelona, but at the ACTE conference in Miami in early May, the complaints didn't come up. The sessions included “Sustainable Procurement: What Is the Green Question?” and “Carbon Emissions and Managed Travel: Cutting Through the Smog.” She says ACTE has tracked an increase in attendance at these sessions as well as a greater diversity of attendees. “In the beginning, it was mostly Europeans,” she says, “but that's changed in just the past year.”
Perhaps what's most interesting about ACTE's offsets is that they're sponsored by British Airways. The sponsorship allows British Airways to be in front of the ACTE audience in a positive light and allows ACTE to further its goal of greening its meeting, without dipping into association revenues.
Tier 1 Offset Providers
“Every organization should think about what they can do under the rubric of social responsibility,” says Gurley. And for meeting planners, like her corporate travel manage members, she says it's time to raise awareness. “This is business. You're going to have to deal with this.”
- AgCert/Driving Green, Ireland: www.drivinggreen.com
- Atmosfair, Germany: www.atmosfair.de
- CarbonNeutral Co., England: www.carbonneutral.com
- Climate Care, England: www.climatecare.org
- Climate Trust, U.S.: www.climatetrust.org
- co2balance, England: www.co2balance.com
- Native Energy, U.S.: www.nativeenergy.com
- Sustainable Travel International, U.S.” www.sustainabletravelinternational.org
Source: Clean Air-Cool Planet, A Consumer's Guide to Retail Carbon Offsets Providers, www.cleanair-coolplanet.org
Offsets and How to Buy Them
While environmentalists remind us that carbon offsets won't stop global warming and that the first line of defense is to reduce carbon emissions in the first place, no one is suggesting that we stop driving cars and sit in the dark. Offsets are a way to mitigate the effects of the greenhouse gas emissions that can't be eliminated.
The carbon offset process works like this: A company or individual tracks CO2-producing activities — driving, flying, heating and cooling buildings, and so on — which can then be translated into a specific volume of CO2. Most offset providers have “carbon calculators” on their Web sites that show how much CO2 is generated by our everyday activities.
For example, one 2,000-mile airplane flight has been calculated to emit 1,000 tons of CO2, according to Clean Air-Cool Planet, a Portsmouth, N.H.-based nonprofit. Carbon offsetting is the process of balancing the greenhouse gases produced by the energy you use by reducing an equal amount of carbon elsewhere. That 1,000 tons of CO2 could be offset by protecting an acre of tropical rain forest from deforestation or running one 600 kw wind turbine for one year, again according to Clean Air-Cool Planet.
Several dozen organizations are out there to help you through the process and sell you the carbon offsets, but observers uniformly advise potential buyers to do their homework and shop around. It can be challenging to understand what you're buying and what to look for in a provider.
Craig Coulter, partnerships director at Carbonfund.org, Silver Spring, Md.-based, suggests three key criteria to look for in an offset provider:
- The Quality of the Offset
How do you know that an emission-reduction project is really effective? Does your provider have strict criteria for selecting its offset projects? The Gold Standard Foundation, www.cdmgoldstandard.org, and Green-e, www.green-e.org, are two groups that offer offset project certification.
- The Professionalism of the Offsetter
How much of your money is going to overhead versus green projects? Ask the off-setter for verification. Some companies in this emerging marketplace can provide audit information.
- The Price of the Offset
The price per ton of CO2 reduction ranges from $4 to $35. If you're satisfied with the quality of the offset and the quality of the organization providing the offset, Coulter says that this is the third criteria to look at. In a report from Clean Air-Cool Planet called A Consumer's Guide to Retail Carbon Offsets Providers, the authors warn against buying on price. “There is no necessary correlation,” they write, “between the price and quality of retail offsets. One can develop and procure offsets that are quite inexpensive yet credible. One can also do exactly the opposite. … Consumers should think first about the quality of the offset they are purchasing.”
The Carbon Lexicon
GLOBAL WARMING is mostly caused by the buildup of greenhouse gases in the atmosphere from human activity, primarily the burning of fossil fuels to provide the energy and services that we use every day.
CARBON NEUTRAL means calculating your total climate-damaging carbon emissions, reducing them where possible, and then balancing your remaining emissions, often by purchasing a carbon offset. “Carbon-neutral” implies that all greenhouse gas emissions are offset and is often used inaccurately to describe a company or project, when “low-carbon” is the more correct term.
CARBON OFFSETS allow individuals and businesses to reduce the CO2 emissions they are responsible for by reducing or displacing the CO2 in another place. Carbon offsets typically include renewable energy, energy efficiency, and reforestation projects.
CARBON OFFSET PROJECTS usually fall into two camps. Emission-reduction projects drive the adoption of new technologies that reduce greenhouse gas emissions; forestry projects absorb CO2 already in the atmosphere.
GREEN TAGS, also known as Renewable Energy Certificates or Renewable Energy Credits, are sometimes sold as part of a carbon offset. RECs are the legal representation of a measured amount of renewable energy (wind or solar) entering the energy grid and displacing energy that would have been produced through burning fossil fuels (such as coal or natural gas). REC buyers pay a voluntary premium to support more renewable energy in the system. As a result, buyers get to claim the legal credit for supporting the environmental results associated with their purchases.