Treasurer invests more in carbon offsets to support green certification

Carbon offsets are investments in projects with goals such as forest protection, aimed at removing carbon dioxide from the atmosphere. Companies can purchase such offsets directly or through intermediaries, and use them to illustrate progress toward emission reduction targets. Project developers raise funds by selling compensation.

Aniket Shah, Global Head of Environment, Society and Governance, and Sustainable Finance, said: “Pressure from all quarters — from investors, from customers, from regulators — requires companies to demonstrate their commitment to climate change mitigation.” Jefferies Financial Group Research company

Regarding the company’s expenditure on carbon offsets.

The ecosystem market has recently started to ask respondents for data in real time rather than every year, and it is expected that its data will increase for two years as more sellers respond. The non-profit organization stated that, in addition, some responses included incomplete details about offsetting the ultimate purchaser, which affected the results.

Mr. Shah said that offsets can provide short-term solutions for companies that need to make long-term changes to reduce their carbon footprint that are not immediately feasible, such as reducing employee air travel. But there are also shortcomings, including regulatory uncertainty about offsetting, and some sustainability executives questioning whether such measures are effective in responding to global warming, he said.

Business Software Company ServiceNow company

It plans to purchase carbon offsets to achieve its goal of achieving net zero greenhouse gas emissions by 2030.

A cloud computing company in Santa Clara, California produces software that the company uses to manage information technology, human resources, and other business processes. According to Chief Financial Officer Gina Mastantuono, 93% of the company’s emissions come from its supply chain, including data centers. The rest comes from the company’s own operations.

Ms. Mastantuono said that in order to achieve its net zero emissions target announced last month, ServiceNow plans to put pressure on its suppliers to decarbonize them. The company is currently formulating what it calls a supplier participation plan, which is expected to be completed next year. The plan involves implementing a sustainability plan in the company’s data center.

Ms. Mastantuono said that ServiceNow will purchase carbon offsets to make up for the difference between the emissions it can reduce by using more renewable energy and its net zero goal.

She said the company has not yet determined how much it needs to spend on carbon offsets, noting that the expenditure will vary with the company’s carbon footprint.

“It depends on how much carbon we can actually reduce and the amount of carbon remaining with renewable energy over time, so it is absolutely variable. This is what we are committed to doing anyway,” she said.

ServiceNow made $59 million in profits in the three months ended June 30, a year-on-year increase of 44%. Ms. Mastantuono said that the company will only purchase offsets that include third-party certifications, such as the verified carbon standard from the non-profit organization Verra.

Other companies are also buying compensation and passing it on to customers as rewards or rebates.

AAR company

The aerospace parts and services company in Wooddale, Illinois, said last week that it will begin providing carbon offsets to customers who purchase certain CFM56-5B or CFM56-7B engine parts.

The plan is “another way to make customers different. We will not only provide you with the parts you want, but we will provide this carbon offset and provide you with value from this perspective,” CFO Sean Gillen Say.

AAR cooperates with Fortress Transportation and Infrastructure Investors LLC, a New York equipment rental company, to provide carbon offsets to customers who purchase second-hand parts. Services managed by AAR include disassembly, repair and sale of used parts from engines owned by Fortress during regular maintenance cycles.

AAR and Fortress will use 1% of the sales generated by the partnership to purchase carbon offsets. Mr. Gillen declined to comment on how much AAR plans to spend on offsets. AAR did not disclose what percentage of its total sales came from Fortress partnerships.

For the quarter ended August 31, total sales of products and services increased by 14% year-on-year to $455.1 million.

Mr. Gillen said that the company will directly purchase offsets through the International Aviation Carbon Offset and Reduction Program, an initiative affiliated with the United Nations.

He said that offsets will not be included in the company’s own sustainability goals.

Write to Kristin Broughton at [email protected]