There are two main ways that companies can deliver carbon reductions, both within and outside of their own value chain:
A. Carbon abatement to reduce emissions across the companies value chain
Carbon emission abatement refers to measures that prevent the release of GHGs into the atmosphere by reducing or eliminating sources of emissions associated with the operations of a company and its value chain. The accounting, reporting and abatement of energy and industry-related emissions in the corporate sector is a well established practice and has been the primary focus of corporate climate mitigation programs, such as the Science Based Targets initiative.
B. Compensation activities to drive decarbonisation efforts across the world
Building upon long-established mitigation hierarchies, compensation projects are measurable GHG emission reductions, resulting from actions outside of the value-chain of a company that compensate for emissions that remain unabated within the value-chain of a company. Compensation measures commonly used by companies include direct investment in emission reduction activities, purchase of carbon credits, and avoided emissions through the use of sold products, amongst others.
By directly financing innovative projects and programs, as well as purchasing high quality carbon credits, companies can support not only climate but also a wide range of co-benefits such as community health, indigenous land tenure-ship, biodiversity, food and water security.