CSR Buyers should look to the Forest

Dick Kempka, The Climate Trust
As published by Sustainable Business Oregon – October 1, 2015

Environmental sustainability programs are a growing trend for many companies striving for financial growth, while simultaneously addressing environmental and social concerns. For companies that have significant energy use footprints—such as large industrials, high-tech companies, or others with vast fossil fuel use requirements—reducing greenhouse gas emissions is an important concern for both shareholders, as well as consumers.

A recently released Carbon Project Disclosure report entitled, Putting a price on risk: Carbon pricing in the corporate world, indicates that over 1,000 companies are disclosing, or planning to disclose, their carbon emissions to their key stakeholders. A common link for these companies is establishing an internal carbon price to properly assess corporate risk for financial purposes.

Currently California’s cap-and-trade program, the Northeast’s Regional Greenhouse Gas Initiative (RGGI), and a few other small state programs, are the only examples of mandatory emissions reduction programs using carbon credits in the United States. There is, however, a growing demand for voluntary credits from corporations working to become carbon neutral and meet shareholder and consumer expectations.

To ensure voluntary carbon offsets have environmental efficacy, robust greenhouse gas accounting protocols have emerged. These protocols are overseen by the American Carbon Registry, Climate Action Reserve and Verified Carbon Standard, and are developed through a rigorous process that includes external scientific review and approval, public review and comment, and third party validation.

While offsetting greenhouse gas emissions may be the driving force behind the growing interest in voluntary carbon credits, it is important to recognize the many other benefits carbon projects provide. These additional benefits are particularly abundant for forestry projects, by far the largest and most attractive project type for corporate social responsibility programs. In part, this is because the biological processes of forests are well understood, and key issues such as permanence (ensuring CO₂ is sequestered long enough to have a meaningful impact) and additionality (actions above business as usual) are clearly addressed in forestry protocols. Forestry projects also offer many co-benefits, such as wildlife and endangered species protection, reduced soil erosion, water quality improvement, and numerous social benefits that increase their charisma—and therefore, their value to voluntary buyers.

Forestry projects typically occur on private land with unencumbered timber harvest rights, where, in the absence of a carbon project, timber harvests would continue at legally permissible rates. Carbon projects incentivize landowners to change this paradigm, leading to a series of activities such as conservation easements, and participation in one of several forest certification programs. These activities result in greater protection for the land, increased recreational opportunities, and long-term agreements to sustainably manage forests. In addition to increased carbon sequestration, these projects result in activities that promote healthy, endemic (e.g. native species for that region), thriving forests that must be legally managed for established periods of time.

Critics of voluntary carbon market forest projects point out that trees die, are burned in forest fires, or are surreptitiously cut down. However, all of these scenarios and others are accounted for by the voluntary protocols. Depending on the risk associated with each project, credits are deducted and used for a buffer pool. The buffer pool is used to replace any unintentional reversals that occur due to natural disturbance. Intentional reversal such as rogue harvesting or terminating a project before the end date established by the protocol, have punitive penalties that require monetary payback by the project owner.

Another criticism is that the sale of offsets allows rich companies to avoid real emissions reductions by eliminating fossil fuels. This belief overlooks the multitude of co-benefits provided by land-based projects. These projects are needed as the world transitions to a low carbon economy, and the added conservation benefits of forestry projects, builds a sustainability ethic beyond simply eliminating coal or oil.

Typically, the first step in addressing emissions as part of a business strategy is implementing internal conservation measures. Beyond this, if you are fortunate enough to be part of an expanding business operation, and internal efficiency measures have been exhausted, you might consider an external emission reduction project. A forest carbon project is a quality choice. Forest carbon projects will not only address emission reduction goals, they will also illustrate a commitment to environmental ethics through the promotion of sustainable forest management practices. For all these positive reasons, The Climate Trust recently engaged in an improved forest management project with the City of Astoria to help prioritize conservation, clean water, and forest health by limiting harvest levels in the 3,700-acre Bear Creek Watershed.

Other land-based greenhouse gas protocols have also been developed, including: Avoided Grassland Conversion, Wetlands Restoration, Agricultural Nutrient Management (fertilizer use efficiency), and more. A variety of these project types will see increased support from Corporate Sustainability Programs in the near future, particularly given the double benefit of greenhouse gas reduction paired with land conservation.