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How Do Carbon Offsets Work In Ecommerce? Our Solution

how do carbon offsets work

Many ecommerce companies purchase carbon offsets, or carbon offset credits, to compensate for emissions produced while running business. Purchasing carbon offset credits funds projects that either remove greenhouse gas emissions or keep emissions from getting to the air. This guide will explain what a carbon offset is, how carbon offset credits work, and how ecommerce businesses can offset their own carbon emissions.

What Are Carbon Offsets?

Carbon offsets, or carbon offset credits, are a form of trade. When you buy an offset, you essentially fund projects that remove or avoid greenhouse gas (GHG) emissions. These projects can range from forest restoration to renewable energy advancements. Each carbon offset credit represents the reduction of one metric tonne of carbon dioxide or its equivalent in other greenhouse gasses.

These offsets are bought and sold through a number of platforms and standards. For businesses and individuals alike, purchasing carbon offset credits offers a way to compensate for any carbon emissions they cannot eliminate.

This mechanism not only helps in balancing out emissions but also supports sustainable development in various sectors, from reforestation efforts to the development of clean energy technologies.

how do carbon offsets work

How Do Carbon Offsets Work?

The process of carbon offsetting unfolds through several key steps, designed to ensure that the impact on greenhouse gas (GHG) emissions is real, measurable, and contributes to a net decrease in global carbon levels.

  • Emission Calculation: The first step involves calculating the carbon footprint of an individual, company, or specific event. This entails accounting for all sources of GHG emissions that are directly or indirectly associated with the activity in question, measured in tonnes of CO2 equivalent (CO2e). For example, EcoCart offers a Life Cycle Analysis to determine the impact of your products.
  • Selection of Offset Projects: Once the footprint is calculated, the equivalent amount of carbon offset credits can be purchased to mitigate these emissions. These offsets come from a variety of projects focusing on either preventing new emissions from occurring or removing existing CO2 from the atmosphere. Projects can include renewable energy (like wind or solar farms), methane capture, reforestation, and energy efficiency upgrades. See EcoCart’s Impact Projects.
  • Verification and Certification: For an offset to be credible, the project it supports must be verified by third parties according to certain standards, such as the Verified Carbon Standard (VCS), Gold Standard, or the Clean Development Mechanism (CDM). These standards ensure that the projects produce the emissions reductions they claim to and that these reductions are additional (meaning the reductions would not have occurred without the offset project), permanent, and not double-counted. Learn more about how carbon credits are verified.
  • Purchase and Retirement: After verification, carbon offset credits can be bought on a carbon market by individuals or corporations looking to offset their emissions. Each carbon offset credit represents the removal or avoidance of one tonne of CO2e. Once purchased, these carbon credits are “retired,” meaning they cannot be sold again, ensuring that each tonne of CO2e is only offset once. Learn more about carbon markets.
  • Ongoing Monitoring and Reporting: Projects are regularly monitored to confirm they continue to deliver the expected environmental benefits over time. This ongoing process provides transparency and assures contributors that their investment in carbon offsets continues to support genuine, impactful environmental projects.

Through this systematic approach, carbon offset credits facilitate direct engagement with global climate action efforts, allowing individuals and businesses to play an active role in reducing overall GHG emissions and moving towards a more sustainable future.

Why Carbon Offsetting Matters In Ecommerce

Carbon offsetting allows businesses to take responsibility for their carbon footprint, encompassing everything from production to shipping. By investing in carbon offsetting projects, ecommerce companies not only contribute to global efforts against climate change but also enhance their brand’s sustainability profile, meeting the growing consumer demand for eco-friendly practices. This proactive approach not only aids in reducing global carbon emissions but also positions companies as leaders in sustainability, fostering a positive image among consumers.

Here are the most notable reasons an ecommerce business should offset emissions:

  • Increased Cart Conversion: Our customers have had a noticeable bump in cart conversion rates since installing EcoCart’s checkout widget, which allows customers to offset emissions from their order at checkout. Nuzest saw a 22% increase and Tribe Kelley a 19% increase in cart conversions after installing EcoCart.
  • Increased Average Order Value (AOV): Installing a carbon offsetting widget at checkout can boost your AOV by 38%.
  • Customer Expectations: Modern consumers increasingly prefer to shop from environmentally responsible brands, making carbon offsetting a key differentiator.
  • Regulatory Compliance: As regulations around carbon emissions tighten, offsetting helps companies stay ahead of legal requirements.
  • Brand Image: Supporting projects that remove or avoid emissions improves a company’s image, attracting eco-conscious customers and building loyalty.
  • Market Advantage: Being a sustainable brand can position a company favorably in competitive markets, appealing to a broader customer base.

Download our FREE ebook:

How To Mitigate Ecommerce Carbon Footprint With Carbon Offsets

At EcoCart, we believe that investing in carbon offsetting is an important element of sustainability strategies, not the whole strategy. Carbon offsetting projects are a great way to help companies mitigate their impact while they invest in systems that reduce emissions in the long term.

You’ll first want to identify where most of your greenhouse gas emissions are coming from. With EcoCart’s Life Cycle Analysis, you can evaluate your carbon footprint per product. Our Sustainability Insights Dashboard will collect all of the data along your supply chain and show you exactly where your carbon emissions are coming from and how many tonnes of those emissions you have mitigated through carbon offsetting. 

We will also make recommendations for reducing emissions and what kinds of sustainability initiatives your business would benefit from. To compensate for the greenhouse gas emissions that you cannot yet reduce in your supply chain, our checkout widget allows customers to offset their carbon emissions from their order during purchase.

Want to know where your business stands? Get your sustainability scorecard with our quiz:

Ready To Offset Your Business Emissions?

Engaging in carbon offsetting is a meaningful step towards environmental stewardship and positions your eCommerce business as a leader in sustainability. By understanding your own emissions and actively participating in carbon offset projects, you can not only mitigate your impact on the planet but also meet the growing consumer demand for responsible practices. 

EcoCart empowers you with the tools and insights to seamlessly integrate carbon offsetting into your operations, enhancing your brand’s appeal and contributing to a more sustainable future. Request a demo to get started.

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