Climate Active Carbon Neutral – HIP V. HYPE's Take

Carbon neutral. Two words, thirteen letters. It’s a term at times met with jaded sighs, raised eyebrows or eyerolls. Lax definitions, offsets of dubious quality combined with its marketability often without accountability has given carbon neutrality an image problem which is challenging for businesses attempting to achieve meaningful carbon emissions abatement.

HIP V. HYPE started its journey to becoming a Climate Active Carbon Neutral Organisation in the 2019/2020 financial year, achieving certification in October 2020. With Climate Active being a Federal Government endorsed program, we view it as the most robust framework to understand our emissions profile, seek opportunities to reduce our emissions and offset residual emissions using Climate Active Gold Standard carbon credits.

The Climate Active program is undergoing a consultation process, designed to raise the level of climate ambition and importantly, action required to certify. The proposed program changes are welcomed by many in industry, including us. HIP V. HYPE submitted our own written response to the Climate Active Program Direction Consultation 2023 paper, with feed in from our team of sustainability consultants and relevant industry experts.

We support Climate Active assessment templates being available to any business seeking to understand their emissions profile. This will ensure that more smaller businesses can undertake an assessment of their emissions profile and so start to look for opportunities to reduce their emissions without committing to the cost and requirements of a full Climate Active Certification.

A templated approach also supports consistency in emissions profiles across organisations in the same industry, enabling consumers to compare apples with apples. Currently, it is near impossible to compare the carbon neutral claims from one company to the next, even those that operate in the same industry, as there are often significant variances in what they opt to include or exclude from their scope 3 emissions.?

Ensuring that emission reduction targets of those seeking to achieve Climate Active Carbon Neutral status align with the national (and global) commitments to limit global warming by 1.5 degrees also makes sense. However, we would like to see that any commitments through Climate Active are in addition to the Federal Government 2030 Nationally Determined Contributions (NDC) emissions reduction target of 43% below 2005 levels. We know that the politics of the day can have a significant impact on government ambition, and we also know that 43% by 2030 must be the absolute minimum target if we are to keep global warming within 1.5 degrees Celsius – particularly as these targets include land use, land use change and forestry (LULUCF).

Mechanisms to ensure that we aren’t ‘double dipping’ into emission reductions are integral. The inclusion of LULUCF, which plays a key role for Australia to meet its 43% target by 2030, means that the government tracks land use changes using satellite technology, including how much additional forest area there is in any given year and attributes that to their emission reductions. But as we see more carbon credit programs, including reforestation programs, and with organisations purchasing these offsets to achieve carbon neutrality, there is a risk that these areas get counted twice – meaning we could overstate our overall emissions reductions as a country.

Communication is key and the proposal to change the ‘carbon neutral’ terminology may lead to more confusion for consumers, many of whom may just be starting to understand its true definition. Although the Carbon Neutral terminology has had significant negative press over the past few years with its links to greenwashing, it is the role of the Australian Competition and Consumer Commission (ACCC) – supported by Climate Active – to ensure that the claims made by organisations are genuine. We look forward to seeing how the European Union’s ‘Green claims directive’ progresses, as it would be logical for Climate Active to adopt similar terminology to ensure alignment with globally established communication protocols.

For a relatively small business like HIP V. HYPE, purchasing offsets is currently the only way for us to achieve carbon neutrality. However, for big industries, where the cost of offsets goes into the hundreds of thousands and even millions, investing in new technologies may actually be the optimal approach. Using the Climate Active framework to first complete an emissions profile to understand where the opportunities lie to reduce first is the first step for any organisation.?

Under the current Climate Active pathways, the only way for large industries to be recognised for their Climate Active commitments is to purchase offsets. Whilst there is immense opportunity for large-scale industries to effectively invest in new technologies that may transform their operations and reduce carbon emissions, having to spend hundreds of thousands and even millions on offsets arguably takes away from their ability to effectively transition to their most optimal low carbon future.

The proposed changes to the Climate Active certification pathway should consider how best to recognise meaningful commitments to invest in the transition, whilst also acknowledging that a ‘Pending’ status for three years may lead some organisations to steer away from the certification pathway. In our submission, HIP V. HYPE has proposed a tiered approach to certification, with ongoing commitment ramped up over time as the aim.

Everyone has a role to play to ensure that we can limit global warming to 1.5 degrees above pre-industrial levels, from government to businesses of all scales, communities and individuals. Certification pathways available should be robust yet feasible and standardised globally where possible to support meaningful carbon emissions abatement at scale.

As for HIP V. HYPE, since undertaking our base year assessment, we have completed a detailed assessment of our emissions profile to see where the low hanging fruit for reduction exists. Although 2020 was a COVID impacted year (as were the two consecutive years that followed), we have identified waste as a key area where we can work to reduce our overall emissions.?

We have made a commitment to reduce our emissions per full-time equivalent person in the business. Setting absolute emissions reduction targets for a small business with an active growth strategy is currently not feasible. There just aren’t enough carbon neutral certified products and services in the market, and, with limited options for recycling for a large number of items, we will continue to see waste as a significant contributor to our overall emissions profile…

As more businesses commit to achieving carbon neutrality either at an organisation level or through Carbon Neutral Products and Services, HIP V. HYPE’s ability to set absolute emissions reduction targets will change and we will continue to review our commitments as a business.

In the meantime, what we can do is track our waste more closely and identify where we can make changes to reduce our waste related emissions. It’s also a reminder that if it’s challenging for those who live and breathe sustainability as we do, then it’s near impossible for the average business/ organisation. ?

We look forward to sharing more of our emissions reduction journey in 2024. And if your business or organisation is keen to begin your own carbon neutral journey we’d love the opportunity to assist by sharing our learnings to ensure your journey is as efficient and effective as possible.

Authored by Sara van der Meer , Head of Operations & Finance and Director of Sustainability at HIP V. HYPE.

About HIP V. HYPE

HIP V. HYPE is an ethical, socially conscious and environmentally focused property developer, sustainability consulting practice and work share provider.

For more information on HIP V. HYPE or our sustainability services, please email us at wedeservebetter@hipvhype.com.?

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