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Balancing for now and the future

The purchase of carbon offsets is made with normal transactional risks with the added complexity of potential unintended consequences (i.e., co-benefits or co-costs) that can undermine an organisations’ sustainability strategy.

Optimisingyourportfolio
The transaction risks that should be considered as a part of any standard due diligence:
Price and market risk 
Supplier risk and counter party risk 
Counterfeit or duplicate credits risk 

The risks associated with unintended social and ecological consequences can be more problematic due to the incomplete or changing knowledge and shifting perspectives around sustainability priorities.

While Net Zero Emissions is unambiguous and can be easily measured, other sustainability goals are more influenced by culture, geography and situation. For example, concerns about water can be influenced by seasonal droughts, local catchment issues and climate zone.

The starting point for assessing the risks associated co-benefits and co-costs starts with clearly defining and prioritising what is important to the organisation and its stakeholders. For some organisations, social inclusiveness and indigenous rights may be more important than water catchment and biodiversity conservation.

The challenge about sustainability is that it requires constant trade-offs, and the trade-off equation will change over time and location.

Experience tells us that risk can be best mitigated, but not eliminated, through diversification via a balanced portfolio. This applies for transactional risks and the risks of co-benefits and co-costs.

CarbonAbility works with you to create a balanced offset portfolio that aligns with your risk appetite.

 

We assess your organisation’s risk appetite across all risk categories and ensure a clear understanding of the overall corporate and brand strategy.

Next, an assessment of the key sustainability priorities of the organisation and its key stakeholders (i.e., shareholders, directors, employees, suppliers, customers, communities, and key influencers) is undertaken to understand current and future risks and opportunities.

We then map existing and potential carbon offset projects against your organisational and stakeholder priorities.

Given the changes in risk exposure, risk appetite and sustainability goals, the carbon offset portfolio should be reviewed on a periodic basis and adjusted accordingly.

The carbon offset portfolio should not be the sole focus of an organisation’s approach to decarbonisation, but it should be integral part of the overall sustainability strategy that considers all risks and opportunities across environmental, social and financial factors. This factors will change over time.
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