Your Guide to Carbon Trading and Offsetting

carbon offsetting

Info article: 

Energy procurement and sustainability management

May 12th, 2024

If you are confused about carbon trading, carbon management and carbon offsetting, then you are in the right place. We’re going to get to grips with exactly what is meant by those terms.

Introduction: Navigating Carbon Trading and Offsetting

The first thing that you and your business should know, is that carbon trading and offsetting are two incredibly powerful tools that can transform your business’ environmental footprint for the better. Your ultimate goal is to be carbon neutral, where the emissions you make are ‘offset’ or ‘balanced out’ by the investments you make in sustainable emission-battling projects.

What is Carbon Offsetting?

Think of carbon offsetting as a way to restore equilibrium. Consider this scenario: every cup of coffee you purchase during your daily commute involves a carbon-intensive production process even before the liquid touches your lips.

From the lush coffee plantations in distant lands to conventional coffee bean cultivation (complete with fertilizers, pesticides, and fuel for machinery), the carbon emissions associated with coffee production are substantial. And that’s not even accounting for emissions during transportation and packaging.

However, here’s where offsetting comes into play. Imagine planting a tree for every cup of coffee you buy. Trees act as nature’s carbon whisperers, inhaling carbon dioxide and offsetting the emissions produced during coffee bean growth and processing.

To truly understand your business’s carbon footprint, calculate the emissions resulting from your daily operations. Armed with this knowledge, you can determine how much offsetting is necessary to achieve carbon neutrality or come as close to it as possible.

How to offset the carbon produced at work

There are numerous types of carbon offsetting schemes that your business could invest in or adopt, such as:

  • Planting trees

  • Recycling schemes that support waste management

  • Investing in conservation and biodiversity

  • Investing in energy efficiency projects, such as insulation in buildings, or installing electric car charging points

Ultimately, to offset your business’ carbon output, the business should invest in projects that reduce or prevent greenhouse gases. Your carbon scales stay in harmony – and your customers, markets and even the planet, may well just give you that much-deserved nod of approval.

The Perks of Carbon Trading for Your Business

Here’s just a few key benefits for you to think about:

Environmental Responsibility

Taking responsibility for your businesses environmental impact speaks volumes about your values - transforming your business into a champion for the planet.

Enhanced Reputation

It’s no secret that carbon-neutral businesses gain credibility and trust among consumers, investors, and partners.

Cost Savings

Carbon reduction strategies can lead to operational efficiencies and cost savings. Energy efficiency measures or waste reduction, sustainable practices often translate to financial benefits.

A Step by Step Guide to offsetting carbon

There are a few steps involved in becoming carbon management experts. Let’s take a look:

Calculate Your Footprint

How much carbon does your business actually emit? Tally up energy usage, transportation, manufacturing processes and waste production. Online tools can help with this.

Identify Offset Projects

Research reputable carbon offset projects. Start with this list to see if anything catches your eye and aligns with your business values.

Invest in Carbon Offset Projects

Once the research is complete, invest. Ensure you do your due diligence with the provider.

Your Strategies for Effective Carbon Management

Your business should adopt a proactive approach to carbon management. Here are the some ideas for finalising your strategy:

Energy Efficiency

Optimise. Tackle energy consumption at source within your operations. Swap bulbs, embrace solar power and keep control with smart energy systems.

Supply Chain Optimisation

Team up with suppliers to reduce emissions throughout the supply chain. Think eco-friendly deliveries and sustainable sourcing.

Employee Engagement

Educate and involve employees in carbon reduction efforts. Your colleagues will have a great insight into the business processes involved in their work area. This could help change the tide of energy usage within your company.

Inspiring Tales: Learn from the Best

You don’t always need to reinvent the wheel. Learn from companies that have successfully embraced carbon trading and have a positive approach to how they manage their carbon footprint. Here are a couple of examples:

IKEA Group

IKEA has given themselves a target to become climate positive (reducing more greenhouse gas emissions than their entire value chain emits) by 2030. To do this, they are investing in renewable energy, energy-efficient products and builds, and reforestation projects.


This powerhouse has actually been carbon neutral since 2007. They now have their sights on operating 24/7 on carbon-free energy by 2030. The company is investing in large-scale renewable energy projects and has committed to investing $1 billion in renewable energy infrastructure and carbon removal technologies.

IKEA and Google are obviously large global corporations – but you always learn a thing or two from others. Be sure to take a look at local or national energy saving awards, or check sustainability news in your business sector. You may find case studies that are particularly relevant for your business.

The Future of Carbon Trading and Offsetting for Businesses

As global awareness grows, carbon trading and offsetting will play an increasingly pivotal role. Stay ahead by keeping informed about evolving regulations, advancements in sustainability, and innovative solutions.

Remember, carbon trading isn’t a curtain you can hide behind. It’s best to reduce emissions at the source. Swap the bulbs, buy the energy-efficient appliances and tackle the biggest emission-making practices at your business first.

Talk to our trading experts