In today’s complex and interconnected environment, it is fair to say that almost every business —in some way—contributes to increasing greenhouse gas emissions.
Yet with the UN’s recent IPCC report declaring a ‘code red for humanity’, we are no longer in a position to turn a blind eye and continue contributing to global warming. We must take steps to neutralize our carbon emissions, both as individuals and as businesses.
However, for some industries, complexities abound when it comes to solving this issue. As an example, the agriculture industry still relies heavily on fossil fuels, which are used for everything from producing fertilizers to tilling and harvesting food to transporting them to the market. Each of these stages needs to be sustainable before the agriculture industry becomes sustainable, which is currently a near-impossible task. Similarly, the tourism industry, which is estimated to account for 8% of global greenhouse gas emissions, has a challenging task ahead because it will likely take decades for flights, hotels and domestic transport systems to become fully carbon neutral.
Carbon-Offsetting: a Viable Solution
With climate change being a necessary task to tackle, for industries like agriculture and tourism, a temporary but viable solution is carbon-offsetting. While calculating the precise carbon footprint has been hard for some organizations in the past, advancements in computer science in recent decades mean we now can have algorithms and technologies that can aid us with these calculations. This not only gives businesses a clear picture of their carbon footprint but also helps them in carbon offsetting by investing in a variety of carbon-offsetting projects.
Some stakeholders in the travel industry are already using algorithms and technology to tackle climate change. At Bookmundi, a tour-booking platform based in Copenhagen, Denmark, we have recently developed a system that computes carbon emissions with the help of machine-learning algorithms. We have tagged over 250,000 data points, information that goes through data-handling algorithms and matrices, allowing it to dynamically calculate the total carbon footprint per traveler per tour, from a tour’s starting location to its final destination. Based on these calculations we then invest in vetted sustainability and green-energy projects around the world to neutralize the effects of greenhouse gases generated by its tours, which are offered by more than 1,500 local and global tour operators around the world.
Easier for Small Businesses to carbon-offset
This process doesn’t need to be limited to tourism, but applies to many businesses. It can also be scaled up or scaled down, depending on whether you are a big or a small business, without having to tweak the basic premise of first measuring and then mitigating carbon emissions.
Moreover, according to some sustainability experts, small- and medium-scale businesses have an edge over big corporations when it comes to neutralizing carbon emissions. Since these enterprises have a less-complex value chain, it is easier for them to collect data and figure out their carbon footprint.
Sustainability is Good for Business
The advantages of decarbonization are not just limited to the environment. While going green would have been seen by many as an unnecessary expenditure in the past (although some estimates say that it only costs a company 0.4 percent of its annual revenue to do this), investing in climate-offsetting solutions is likely to be good for business too. Today’s customers are purchasing greener than ever, and more than a third of global consumers are now willing to pay more for sustainable products. Many businesses have already seized this opportunity. According to a study carried out by NYU Stern Business School, the sales of ‘sustainability marketed products’ grew sevenfold compared with conventional products between 2015 and 2019. Also, a recent report by Barclays outlines how bond portfolios with Environmental, Social, and Governance (ESG) goals incorporated have consistently outperformed those that do not.
From solar power to wind farms, from complex algorithms that can calculate every ounce of energy we use to smart devices that save a lot of money, we live in a world where options abound for a cleaner, greener future. Often, technology and solutions are available to implement climate-friendly initiatives. As for industries where solutions are not yet ready, carbon-offsetting is a viable alternative. All we need now is the will to act.