Looking at the gas bills from his diesel-powered delivery truck depressed Scot McCracken, the CEO of Concord, Mass.-based coffee wholesaler La Bean Coffee. He knew using an older-model box truck to deliver coffee throughout the traffic-congested Northeast wasn't just wasting money. It was polluting, too. "Doing our own deliveries was so inefficient and carbon-terrifying," he says.
Determined to reduce La Bean's emissions, McCracken turned to an up-and-coming sustainability approach known as carbon-neutral shipping.
The goal of carbon-neutral programs isn't to eliminate all carbon emissions associated with shipping, a practical impossibility. Instead, they aim to offset those emissions by removing an equal amount of carbon from the atmosphere, says Eric Lowitt, founder of green-business consultancy Nexus Global Advisors and author of The Collaboration Economy. Typical projects fund initiatives like planting trees in depleted forests and building solar, hydroelectric and wind energy plants.
With more companies looking for solutions to reduce their environmental impact, carbon-neutral shipping is gaining attention.
"We used to be wrapped up in whether a product was green [and] whether the packaging was green," says Lowitt. "Now we're getting to the least sustainable portion of the supply chain: shipping."
Going carbon-neutral involves two steps. First, a business needs to measure how much carbon its shipping activities generate. Resources for figuring out your carbon output are available on the websites of the U.S. Environmental Protection Agency and the Center for Climate and Energy Solutions (C2ES).
Once you quantify the pollution generated by your shipping program, you can purchase carbon offsets for that amount. That's where it gets complicated, says Janet Peace, a vice president at C2ES.
Outside of California, where there is a mandated compliance program for controlling emissions, there are no laws requiring companies to offset carbon emissions. As a result, the unregulated offset market has some less-than-scrupulous participants, Peace says. It's up to business owners to ask questions and find a reputable program.
Here are three signs of a good carbon-offset program:
1. It's certified by a third-party agency. Carbon-offset programs should be evaluated by an independent organization, says Peace. Trusted organizations include the Gold Standard, the Climate Registry, and Verified Carbon Standard.
2. The parameters of the project are well-defined. Know what you're buying, Peace says. Is it a greenhouse-gas project at a landfill? A forestry project? Also ask when the project began. Shady operators may try to sell you an investment in a project that happened years ago.
3. It's permanent. This is particularly important in forestry programs, says Peace. Ask for written assurances that trees planted or spared from harvesting today will not be cut down in the future.
Worried your small business can't make a difference on its own? Consider teaming up with other ecologically minded businesses. For example, if you're looking to source milk from a carbon-neutral farm but there isn't one nearby, Nexus's Lowitt suggests getting together with other businesses to donate the necessary equipment to a local farm. Voila: Now you have a carbon-neutral vendor up the road. "Don't allow your limited scale to prevent you from going this far," he says.
After reviewing several programs, La Bean's McCracken decided to sell his delivery truck and shift his shipping to a major shipping company's carbon-neutral program. Because its trucks follow more efficient routes, it substantially cuts his emissions. The program is also easy to use and affordable. Each shipment costs a small carbon-offset fee of about 3.5 percent of the total shipping cost, or $1.75 for a $50 shipment.
McCracken also receives quarterly reports on the offset programs his funding supports, which are vetted by London-based carbon-emissions consulting firm the CarbonNeutral Company. "I pay a small fee for the emissions I generate, and I get to see those dollars in play," he says.
The author is an Entrepreneur contributor. The opinions expressed are those of the writer.