Carbon neutral, green energy and long-term sustainability are the new buzz words as business prepares for a carbon-constrained future.
Airlines, banks, architects, hospitals, local councils, breweries, hotels and even major construction projects – businesses big and small – are going ‘carbon neutral’. And they’re telling everyone about it.
Carbon offset and abatement providers say a growing number of organisations are spending tens of thousands of dollars and more planting trees to offset all their carbon emissions.
Even without the regulatory pressures of carbon trading schemes or mandatory reporting forcing companies to ‘do something’ about their environmental impact, businesses are taking voluntary action in anticipation of, what some say are, impending legislative changes.
Dire predictions from the Intergovernmental Panel on Climate Change, the Stern Report and even Al Gore’s film An Inconvenient Truth also appear to have shaken the public, and the business community, into action, forecasting severe economic consequences if global emissions aren’t reduced.
Andrew Grant, managing director of the country’s largest carbon offsets provider, CO2 Australia, said he had witnessed a transformation over the past six months as more and more businesses become proactive about offsetting their emissions.
“From anecdotal evidence that I’ve heard, since Al Gore visited Perth and gave his presentation, the response has been quite dramatic,” he said.
“There’s been a groundswell of community action, and also from business.”
While most of CO2 Australia’s business is in the eastern states – predominantly due to the New South Wales Greenhouse Gas Abatement Scheme, which has been running since 2003 – Mr Grant said that Western Australia was just waking up to the carbon neutral movement.
To date, the company has planted about 2,500 hectares of oil mallees around the country, including in WA around York and Narrogin, which equates to roughly five million trees in the three years they’ve been in business.
“There’s a sense amongst the community that people feel disempowered. They’ve identified the problem of climate change but don’t feel like they can have any effect,” Mr Grant said.
“But the carbon neutral initiatives make them feel like they can make a contribution to that.”
It’s not just about planting more trees, however.
Angela Tillier from Floreat-based Carbon Neutral (formerly Men of the Trees) said the process of achieving carbon neutral status also involved education about ways to reduce energy consumption.
“The move is two-fold: reduce first, and what you can’t reduce, offset,” she said.
“The reductions must be done first. We’re not here to plant trees just to make people feel good, were trying to make people more responsible.”
Ms Tillier said the group encouraged businesses to switch to green power which, while it did cost more than conventional electricity, could produce savings when used in conjunction with greater energy efficiency.
“Organisations can spend $25,000 per year on natural power. Natural power does cost more, but reducing consumption can reduce costs,” Ms Tillier told WA Business News.
Counting the WA state government fleet, Water Corporation and Western Power as some of its clients, business is booming for Carbon Neutral, which have gone from planting 31,000 trees in the 2004-05 season, to 241,000 trees in 2005-06.
More than 520,000 will be planted this season.
Fellow WA-based carbon offset provider, Elementree, has also experienced strong growth in the uptake of its services.
The company’s plantings of local native species across the north-eastern Wheatbelt are scheduled to rise from just 50,000 trees to date to almost 500,000 trees next planting season.
But managing director Courtney Hayes believes that, while it is encouraging to see the growing interest from individuals and business, the uptake of carbon offsetting relative to the total population remains relatively small.
“It wouldn’t be even one in 100, or 1 per cent of the total population of WA involved,” he said.
“It’s going to take time for society where it reaches that tipping point. It is a new trend for society as a whole.”
Recognising the economic potential of carbon offsets, and in anticipation of regulatory changes, Elementree will soon be launching an offshoot division, Elementree Capital.
The new division will encompass commercial and wholesale capabilities, targeting large-scale projects and carbon credit generations.
“[Elementree Capital] is in anticipation of an emissions trading scheme, and we’re extremely bullish of that becoming a reality,” Mr Hayes said.
One WA business to recently attain carbon neutral status is the Esplanade Hotel in Fremantle.
Owner Marylyn New said the hotel had engaged an organisation called Rainforest Rescue to secure 9.6 hectares of rainforest in Ecuador as an ongoing commitment to offset the hotels carbon emissions. The Esplanade is also the only AAA Tourism accredited ‘Green Star’ hotel in WA.
“We are very conscious about saving energy by using fluorescent energy saving light globes and computerised air-conditioning, which can be used selectively,” Ms New told WA Business News.
“We’ve also fine tuned our water savings program, with efficient showerheads, taps and toilets.”
Ms New has also traded in her Maserati for a fuel efficient, low-emissions Citroen C4, which she is using to promote the hotel’s new focus.
Interest in carbon offsets has come from a variety of industries and companies with large and not-so-large emissions profiles, with the motivation for involvement including reputation issues, leadership or customer loyalty, to genuine altruism.
The increase in space devoted to environmental and social reporting in annual reports – and in some cases the existence of separate “sustainability reports” with associated key performance indicators relating to greenhouse gas emissions and water use – could also point to a shift in attitudes towards a greater awareness of environmental issues and expectations of big business.
But whatever the motivation, most providers agree that if it puts more trees in the ground, it’s a good thing.
“It’s showing the evolution that’s happening, the awareness raising, and it’s all positive,” Elementree’s Courtney Hayes said.
While the greenhouse offset or abatement market is expanding rapidly, it is unregulated. And, as with any market, there is a range in the quality of product that is available for sale.
Providers can gain accreditation through the federal government’s Greenhouse Friendly initiative, which has clear and rigorous requirements for offset projects, requires third party independent verification, carbon yield forecasts and gives final approval to projects.
Currently, CO2 Group is the first and only Australian carbon credit provider to achieve federal government accreditation under the Greenhouse Friendly program. The group is also accredited under the NSW Greenhouse Gas Abatement Scheme, where all carbon sinks are restricted to NSW.
If an abatement provider is not accredited under an initiative like Greenhouse Friendly, investors need to ensure that what they are purchasing is real abatement.
This can be done through the contract of sale, in which abatement or carbon sequestration rights can be sold separately from the trees or forest.
All states and territories have enacted legislation to allow the separation of carbon sequestration rights to ownership of forests and land.
Carbon Neutral’s Angela Tillier says the offset industry itself is being put under more pressure and scrutiny as individuals and organisations work ensure that the trees planted are maintained for the long term.
Carbon Neutral and Elementree say they are currently in the process of gaining accreditation.