How Karbon offset emissions, and what you can learn from our experience

At Karbon, we do very little travel, no manufacturing, and have no vehicles, yet we emitted close to 1,000 tons of carbon dioxide in 2020 alone. Where did it all come from?

Here’s the why, what and how of Karbon’s first carbon audit and offset (including a breakdown of the results).

Where we started

At the start of 2021, I floated an idea in our general company Slack channel that had been circulating in my head for some time.

Fig 1. The first step.

The motivation was twofold: 

1. The planet and the state we leave it in is something I feel we should all consider 

2. Every member Karbon’s marketing team is constantly proposing ideas to make our company more attractive, and genuinely better for both customers and employees

The response from around the company was positive but muted, the general feeling being that this was a good thing to do, but that to be effective it had to be resourced correctly.

Fig 2. The calm voice of reason prevails.

But as the year hit its rhythm, other more immediate projects started to take priority.

Stuart, our CEO continued to CC me on emails and conversations relating to this subject however, and by the second half of the year, I had  created a Work Item in Karbon with half a dozen promising directions.

It wasn’t until the end of the third quarter of the year, after discussions with several offset audit providers, that we finally committed to an ambitious plan of auditing and offsetting our emissions for the previous year in the last 3 months of 2021.

The process of offsetting our carbon emissions

Emissions offsetting is a lot like forensic accounting. It’s essentially the process of looking back over records (or a conspicuous lack thereof) and extrapolating what happened. 

The exact process will vary depending on how large your organization is and what sort of activity it undertakes, but below are some general steps that will almost certainly apply.

Step 0: Get the puns out of your system right away

This step is optional and won’t apply to all businesses. But if you happen to work for a company that sounds a lot like ‘carbon’, it’s a good idea to set the ground rules around puns early.

Fig 3. Making a decision on puns.

Step 1: Nominate a project driver and allocate them time

As with any successful project, someone has to own the responsibility of liaising with all the stakeholders involved. At Karbon, that was yours truly 👋

The project driver’s paramount responsibility is to engage as much of the company as possible, from the C-suite down to the juniors. 

For the last quarter of the year, we blocked out a period of time twice a week that was specifically dedicated to ‘Carbon offset hustle’. This time involved liaising, collating data and prodding other team members for information. 

The amount of time involved was only several hours over each week, but having dedicated, sanctioned time as a resource allowed for regular progress.

Step 2: Secure an auditing partner

I used our Karbon Work Item to collect various notes and initial conversations with several potential partners. We chose to go with RyeStrategy based on an initial kickoff call where their enthusiasm and dedication to the work really shone through.

Fig 4. The Karbon work item, completed, like all good fourth quarter projects, the day before Christmas eve.

The carbon offsetting space is still something of a wild west with lots of new players entering the market, some of them less than completely legitimate. 

Before you engage with an auditing partner, make sure to ask about the framework they use for calculating emissions.The GHG protocol is considered the de facto standard and any methodology built around it is a good starting point.

For carbon offset accreditation, the two most thorough and trusted options currently are the Gold Standard and Verra, although they're certainly not the only good options. Climate Action Reserve and American Carbon Registry, amongst others, are good options as well.

Step 3: Get intimate with your P&L 

Unless you are a cow, most of your emissions will be attached to something that you’ve bought or sold. A well-organized profit and loss statement on its own can get you a significant way to estimating your total emissions.

If you’re running a steel smelter or earth-moving business, you will have a lot of direct emissions caused as a result of your business operation. More likely though, the bulk will be secondary—emissions from goods and services you’ve purchased or contracted as part of everyday activity. 

Karbon doesn’t do any manufacturing, run a fleet of vehicles and in 2020, at least, didn’t host a lot of in-person events, so our direct emissions—called ‘Scope 1 emissions’— accounted for about 0.083% of our total footprint. This is mostly from computers, office equipment, etc. All this is easy to audit if your books are in order.

Step 4: Make friends with your IT department

How many gigabytes of traffic did your website serve last year? How many emails were sent and received in total? How many social media impressions did your marketing campaigns produce? What about video calls? Where is your website hosted? With whom?

Chances are that you’re not going to have the answers on hand, or at all.

Time to venture deep into the IT dungeon to find this information (maybe take an offering of some coffee with you).

Step 5: Involve everyone

If you’re a remote or hybrid company, you’ll need to poll your staff about their energy consumption at home, including their transport emissions for days worked at the office. 

If you have more than one office, someone will have to gather energy usage information for each one. The sooner you can get people on board and identify your internal champions, the better. 

Fig 5. The internal project channel with our 22 champions.

Karbon is a globally distributed team so it was also important to recruit champions in as many departments and locations as possible—and it wasn’t a complete success. Some offices just couldn’t get the information we needed, and in one instance, one of our offices from 2020 didn’t even exist any more. When this happens, move on to step six 👇🏽

Step 6: Embrace approximation

This is less of a step and more of a way of life.

It’s not feasible to account for every single gram emitted by your firm, let alone all your upstream providers and downstream consumers.

At some point, you’ll have to draw a line and say, “from now on, we’re going to project based on averages”.

In many cases, the information you need to get the full picture, i.e how many cubic liters of sewage was pumped on premises for the period, is simply not going to exist. Your audit partner will have the tools to help you make a practical estimation.

Step 7: Take pride in a job well done 

Look at me, writing an article about our success. It’s easy to be cynical about using environmental initiatives as marketing material (nobody wants to be greenwashed), but there is growing consumer demand.

A 2021 Deloitte survey found that 34% of UK consumers have actively chosen brands that are perceived to have more sustainable values and practices, with a further 15% saying that a lack of information is holding them back from pursuing more sustainable options. 

The non-profit Resources for the Future, surveyed American consumers in 2020 and found over 80% expect businesses to be actively involved in combating climate change,

So don’t overdo it, but do let people know.

The results

The following table was produced by Rye Strategy following the audit:

Fig 6. An excerpt from Rye Strategy’s comprehensive report.

Karbon produced nearly 980 tons of CO2 in 2020. Let’s break this down.

Purchased goods & services 

Category 1 includes all of our online hosting for both the Karbon app and other digital presences we administer such as our main website, Karbon Magazine and The Accounting Leaders Podcast website, so it’s unsurprising that, as a SaaS company, it makes up the bulk of our emissions. 

Most of the actual Karbon app is hosted on Microsoft Azure, who are already leading the push towards sustainable cloud computing, however there are unavoidable and incalculable emissions that we need to acknowledge.

The bulk of the calculated emissions in this category actually come from upstream software providers such as Salesforce, as well as other professional services we engage with as part of running Karbon as a business.

The rest of the upstream emissions come mostly from transportation and the consumption of office supplies and equipment. It’s easy to ignore the impact of purchasing an item that has been shipped from overseas just because it’s a few dollars cheaper than a local option.

Takeaway: Buying locally, even if it’s not that local, has a huge cumulative effect.

Business travel

In 2020, like the majority of the world, we stayed at home for the most part, so our travel footprint was happily light. As you might expect, of the 16 tons emitted by travel, the majority was as a result of flights at 9 tons. However, a surprising 6 tons was emitted from accommodation services due to travel. 

Takeaway: If you have to travel, think hard about where you stay.

Employee commuting

This category includes the emissions from working at home, so while it might seem like an easy win to encourage staff to take the bus, only 8 of the total 32.8 tons of ‘commuting’ emissions were actually from travel.

We encourage people to work in ways that are most effective for their lifestyles, and most Karbon employees do at least some work from home. If you are conducting an audit of your business in good faith, you have to include business activities done in domestic environments.

We sent out an employee survey that Rye Strategy put together for us and got a reasonable response rate. This survey captured details like electricity consumption for those working from home and commute habits for those who work flexibly between home and an office. 

After feedback from our team, we have simplified it significantly to be less time-consuming to complete.

Takeaway: Remote work can add significantly to your ‘invisible’ emissions.

Downstream transport and use of sold products 

These emissions were completely invisible to us before we started this process. A full 37% of our net emissions came from the electricity used to deliver our software to customers. 

This includes an estimation of the electricity used to transfer the data through the internet, as well as the power consumption of the individuals who are using Karbon, watching webinars and browsing the website. If you’re a power user, you’re also a power user.

Takeaway: Every email you send, every training video you record and every visit to your website has an emission cost.

Accreditation

As a result of our efforts, we received an acknowledgement from Rye Strategy that we are 100% carbon neutral for 2020.

Fig 7. The badge we received from RyeStrategy.

Sharp-eyed readers will notice that this equates to a 1x offset of our footprint. This is in acknowledgement that simply buying carbon credits isn’t the end of the road. 

This year we will be trying to offset 200% of our carbon (for the 2021 calendar year) and win the silver.

Key takeaways for offsetting your carbon footprint

• It takes time and persistence

• But it’s not actually that hard

• Your online activities have a cost of delivery

• Who you choose as your service providers can make all the difference 

• Working from home isn’t a free pass

• You'll have to make lots of assumptions

What’s next for Karbon?

Will we do it again? Yes! We’ve almost finished the audit for 2021 (in the first quarter this time).

This year, we expect our team—and thus our emissions—to grow, and offsetting is not the same as reducing. Going forward, we need to start actively seeking ways to lower our footprint. This means:

• Actively seeking out B Corp and carbon neutral suppliers

• Encouraging greener commuting options for those working from our offices (or flexibly)

• Ensuring when we do have to travel, we seek out LEED-certified accommodation where possible

• Setting up an internal team to act as a carbon emissions watchdog and thinktank to help advocate for better practices

• Offsetting more than our total carbon footprint in 2021 for a net negative impact

What’s next for you?

To learn more about the business case for becoming a carbon neutral accounting firm and how to offer it as an advisory service to your clients:

• Visit the carbon neutrality resource hub on Karbon Magazine

• Download the Carbon Neutrality Advisory template from the Karbon Template Library