If you want to decarbonize the economy, carbon offsets don't work. Here's why.
Despite doubling in price the last 18 months, carbon offset prices are cheap (relative to the cost of reducing emissions). Carbon offsets should and will be much more expensive. For now, because they're so cheap, carbon credits act more like a marketing tool than a social good.
The little secret?
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How it stands
- Companies frequently implement corporate social responsibility (CSR) programs (which include sustainability initiatives) in order to improve their image in the eyes of investors and customers, which in turn boosts profits.
- But it is unclear if CSR programs actually make the world a better place
- Most of the information about a company’s environmental footprint is only available through the company itself, presenting an obstacle to objective evaluation.
- Coca-Cola claims to have reduced the water footprint of their drinks. But their calculations do not include the water used in the supply chain that provides the ingredients and packaging for the final product.
- CSR programs (like Coca-Cola’s) often use offsets which instead of conserving limited resources lead to increased consumption.
- Unilever claims to use a scientific approach to sustainability, trying to reduce their own emissions instead of investing in offsets for carbon neutrality.
- More recently, Unilever announced the addition of carbon footprint labels on all products to increase transparency.
- While the effectiveness of corporate sustainability programs is mixed, the fact that sustainability is on their radar and part of their marketing strategy is a big step forward.
- Don’t take everything you hear at face value. Take a deep dive into a company’s sustainability practices and decide for yourself.
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Why it matters
- The program failed to exclude big businesses and smaller firms in good standings from receiving the low-interest loans as part of the PPP.
- Small businesses received little to no help through the program.
- A large number of big businesses and small firms that received funding through PPP experienced financial hardship long before the COVID-19 crisis, according to an Associated Press Investigation.
Corporations facing backlash
- Several large beneficiaries have decided to return the loans received through the PPP.
- The LA Lakers, Kura Sushi USA and Sweetgreen have returned loans they received through PPP.
Between the lines
- Small business owners and executives found the PPP process of application ambiguous and confusing.
- The Small Business Administration and Treasury Department had given businesses that wrongfully received loans till May 7th to return funds.
- Corporations and small businesses that received over $2 million in loans will be audited and criminally prosecuted if found guilty of financial wrongdoing.
- Publix announced that it will purchase excess milk and food produce from farmers and donate it to Feeding America food banks.
- Eateries such as Ho Foods and Roku have been feeding healthcare workers through fundraisers, while using their own resources too.
Dig deeper → 4 min