Should businesses backdate their carbon emissions?
Companies are starting to address their historic greenhouse gas emissions in a bid to become ‘lifetime carbon neutral’. What does this process entail – and will it become standard practice?
As most companies focus on cutting their current and future greenhouse gas emissions to tackle the climate crisis, the concept of becoming ‘lifetime carbon neutral’ is relatively novel. This requires an organisation to take responsibility for its past polluting actions by taking all the CO2 it has emitted throughout its existence back out of the atmosphere.
Microsoft was one of the first companies to make such a commitment, pledging to remove all the CO2 its operations have produced since it started trading 46 years ago by 2050. Explaining the policy in January 2020, the company’s president and vice-chair, Brad Smith, said that simply becoming carbon neutral was “not enough to address the world’s needs. While it is imperative that we continue to avoid emissions… we see an acute need to begin removing carbon from the atmosphere.”
Window manufacturer Velux has traced its contribution to climate change all the way back to its foundation year of 1941. By sifting through its historical sales and production data, some of which was kept on handwritten notes, the Danish company has worked out that its activities have emitted 4.3 million tonnes of CO2 during its lifetime.
“You have to take responsibility for what you’ve done in the past,” says Velux’s vice-president of external relations and sustainability, Ingrid Reumert. “It’s not just a question of improving your future performance. If you can do more, you should do more – and that’s the situation we find ourselves in.”
Since Microsoft made its commitment last year, very few companies have followed suit. Backdating emissions remains “at the forefront of leadership on climate-change strategies”, says Aoife Brophy, business and sustainability researcher at Oxford Saïd Business School.
“Backdating is a really interesting trend that speaks to the true nature of the climate crisis. Looking at how that stock of carbon has historically accumulated is a really positive move,” she adds.
In September 2020, Google’s CEO, Sundar Pichai, announced that the company had managed to eliminate its legacy emissions, albeit largely through offsetting.
Brophy notes that the tech giants “have been part of a really big focus of backdating, as they try to position themselves for the future”, but smaller businesses are also rising to the challenge. For instance, website design agency Webbed Feet has offset all its CO2 emissions dating back to 2008, when it began operating as a limited company.
The Salisbury-based firm’s director, Aaron Whiffin, used a simple formula to calculate its historic carbon footprint. He took its emissions in its year of greatest activity and multiplied this figure by the number of years Webbed Feet has been trading. As the business has grown consistently throughout its existence, this is an overestimate.
Whiffin recognises that the process of “improving the situation by making up for the damage you’ve already done” will not be straightforward for every business. “It’s been easy for us to estimate our impact, as we’ve been a limited company for only 13 years, but firms that are 50 years old are going to struggle.”
Indeed, it took Velux a year to come up with a satisfactory estimate for its historical CO2 emissions. The process required the company to make several assumptions about the energy mix it was using and the types of vehicles that were being driven on business, for instance. As a result, it added 25% to the total calculated to compensate for any underestimates. Even with this buffer added to the target, Reumert reports that the company is on course to become lifetime carbon neutral by its centenary in 2041.
“If you can work out your past footprint, in regard to the environmental damage you’ve caused while manufacturing money-making products, there is an obligation to do so,” she argues.
Once a firm has worked out its historic CO2 emissions, the next challenge is to remove them. To this end, Microsoft is looking to the development of carbon capture and removal technology. It has already committed $1bn (£730m) to an innovation fund in this field.
Velux, by contrast, has entered a partnership with the World Wide Fund for Nature to create and conserve forests in Uganda and Myanmar. Reumert explains that this move was informed by the company’s commitment to tackle the biodiversity crisis, which is intrinsically linked to climate change.
“There are multiple crises facing the planet, so any initiatives that you undertake should try to tackle as many of these as possible,” she says.
When assessing the best ways to deal with the climate crisis, both Reumert and Brophy are keen to stress that a company should prioritise efforts to cut its current emissions over any work required to meet historical targets.
Brophy says: “It’s very important to focus on reducing your existing footprint first before thinking about residual emissions. Getting the balance right between your carbon-reduction efforts and your future investments in removal is a fundamental challenge facing policy-makers and companies.”
She adds that the idea of backdating emissions also raises important questions concerning historic responsibilities for climate change.
“The Global North has been responsible for a huge proportion of cumulative emissions to date, while the impact of climate change will be focused on the Global South,” Brophy explains. “Such equity considerations should be part of net-zero targets. This is where a focus on backdating emissions could be really helpful.”
Although backdating remains a nascent area of industrial climate action, it has the potential to fuel advances in carbon-removal technology and encourage companies to consider their wider responsibility for the climate emergency. The efforts of companies such as Velux, Microsoft and Webbed Feet show that it is possible to become lifetime carbon neutral. The wider uptake of this more holistic approach to climate action may be necessary if we want to reach our most ambitious net-zero goals.