Buyer’s guide to carbon offsetting (January 2009)

Employers can enhance their green credentials by helping staff to offset their personal carbon footprints, says Nicola Sullivan

Carbon offsetting enables organisations and employees to counterbalance their carbon footprint, which is usually calculated by totting up the amount of greenhouse gases produced by factors such as car journeys, flights and the amount of electricity they use every year. The money needed to mitigate such greenhouse gas emissions is donated to charities, such as the Woodland Trust, which will plant the required number of trees to offset the carbon released. Other recipients of donations from carbon offsetting schemes include wind farms and wave power projects.

Employers that want to boost their corporate social responsibility (CSR) credentials, as well as respond to employees’ interest in environmental issues, could consider introducing a carbon-offsetting scheme. Through such plans, employers can offer staff the opportunity to offset all, or part, of their carbon emissions.

Sarah Locker, corporate fundraiser at the Woodland Trust, says: “It gives employers the opportunity to engage their staff with environmental issues, and help them to recognise the impact they make and understand what they need to do to help. By going through a calculation, they understand how much energy they personally use and how much difference they can make. They can also recognise how this fits into the workplace as well as at home.”

Carbon offsetting schemes can be offered via a salary sacrifice arrangement, under which employees can make tax and national insurance savings by paying a charity for their carbon footprint directly out of their gross salary. Carbon offsetting can be offered as a standalone perk or included within a flexible or voluntary benefits scheme.

Alternatively, employers may opt to foot the entire bill to offset their employees’ carbon footprint and allow them to choose which charity the money goes to.

Some carbon-offsetting schemes can be run in conjunction with online shopping programmes. For example, last October, Grass Roots launched Carboncreditz, which enables employees to accumulate credits that can later be used to offset their carbon footprint. The plan works in the same way as a customer loyalty scheme, with employees collecting carbon credits when they shop online with affiliated retailers, including Tesco, Boots, John Lewis, and Marks and Spencer. The credits are then banked until an employee wants to invest them in environmental projects to offset their carbon footprint.

David Evans, chairman and chief executive of Grass Roots, says: “About 40% of CO2 emissions in the UK can be attributed to individuals, but other than recycling, consumers have little knowledge of what they can do to reduce their carbon footprint or offset their energy consumption.”

Carbon calculator tools that enable employees to work out their total footprint play a central role in offsetting schemes. These tools, which can either be paper-based tools or accessed online, often carry an organisation’s branding. For example, the calculator included in the carbon-offsetting scheme currently being piloted by Royal Mail Group features a cartoon owl.

Although, in most cases, employees will cover the cost of offsetting their carbon footprint, the perk does carry a charge for employers. They can expect to pay about £2-to-£3 per head per annum for staff who take up the perk.

Carbon-offsetting schemes can also be used to give staff information about other steps they can take to become more environmentally friendly. Martin Blake, head of sustainability at Royal Mail Group, says: “We are spreading the word about a sustainable environment, not just giving people a way to offset [emissions]. Our scheme clearly demonstrates the relationship between the amount of carbon [staff] are creating and what it costs to offset.” EB product file: carbon offsetting What is carbon offsetting? A carbon-offsetting scheme enables employers to offer staff the opportunity to counteract their total carbon footprint, calculated by factors such as the number of car journeys, flights and the amount of electricity they use each year.

Where can employers find more information about carbon offsetting?
• The Department of the Environment and Rural Affairs (DEFRA) provides information on carbon offsetting:
• See also the Woodland Trust at

Who are some of the main providers?
Aon Consulting, Carbon Clear, Carbon Offsets, CO2 Balance, Grass Roots and Vebnet.