As global temperatures continue to rise, the effects of the climate crisis are becoming ever more apparent: stronger and more frequent hurricanes, enormous wildfires around the globe, the acidification of the ocean, and increasingly accelerated arctic sea ice melt. With growing concern over carbon emissions, many people have taken action to reduce their carbon footprint.
The three steps to doing so are:
- Measure your carbon footprint
- Reduce what you can of your carbon emissions
- Offset the rest
Carbon offsets are a resource utilized by many individuals and companies (including Abacus) to reduce their carbon footprint more mindfully. If you’re someone who cares about the environment and are wondering how else you can add sustainability into your lifestyle, carbon offsets are an excellent option. In fact, we are often asked about carbon offsets by clients looking to align their money with their values beyond their investments. Let’s review how you can get started and incorporate carbon offsets into your carbon footprint budget.
Your Carbon Footprint
So what exactly is your carbon footprint? Your personal carbon footprint is a measure of how much carbon dioxide is released into the atmosphere by your day-to-day activities. Virtually everything you do – driving to work, switching on a light, plugging in an appliance or computer, taking a flight – utilizes energy resources that release carbon into the atmosphere. More carbon in the atmosphere means more consequences for the environment.
A Journey to Creating Impact
Since our founding, Abacus has focused on how our business impacts our communities and world at large. Beyond investing, our firm has taken a number of steps to reduce our environmental footprint. Through prioritizing intentional reduction of carbon emissions and carbon offsets, Abacus has been a carbon neutral company since 2012.
As employees who work at a firm that takes these environmental efforts to heart, it’s only natural for us to wonder, ‘What else can we personally do?’ To find out, our team organized an expert consultation from our friends at Align Impact who explained how we could take action ourselves. We learned that individuals can indeed use strategies to measure, reduce, and offset their own carbon footprint. Here’s a quick rundown on how to get into the carbon offset game.
Measuring Your Carbon Footprint
In helping clients with their finances, we often say you can’t change what you don’t measure. This also applies to your carbon footprint. Like budgeting your money, knowing where you stand today with your carbon budget is key to getting started.
The United States is the second largest producer of carbon emissions. While gas, oil, and coal companies produce a significant amount of carbon emissions by extracting their resources at the beginning of the supply chain, consumers contribute at the end of the supply chain from their use of cars, airplanes, electricity, and shipping lines.
With global temperatures rising, it is critical for carbon emissions to be reduced. For our planet to remain below the threshold of 2°C, and with a global carbon budget of 750 billion tonnes of CO₂ until 2050, it is estimated that each individual would need to reduce their carbon emissions to 2.3 tonnes/year. Today, the average person produces 4.5 metric tons of carbon dioxide annually, while Americans produce a whopping average of 16 tons.
Making small changes in your daily habits can create a better quality of life for you and the planet. And it’s not just for your lifetime, but also the lifetimes of your future children, grandchildren, and great grandchildren, who will all be affected by choices we make today.
Here are a few tools to help you evaluate your current carbon footprint:
- For a quick estimate, this UN Carbon Footprint Calculator takes 5 minutes.
- For a more comprehensive option there’s Carbonfootprint.com.
What Can I Do to Reduce My Carbon Footprint?
Now that you know what your footprint looks like, consider making a personal carbon budget and set targets to reduce it. Becoming more mindful every day of how your actions contribute to the many ways carbon gets released into the atmosphere is the first step in doing something about it. Subsequent steps include:
Reducing Your Footprint
This one is obvious but important. Cutting back on all types of energy use, from driving to flying, is a good start. The more you can walk, run, bicycle, or generally use your body to get around, that cuts down immeasurably on having to use fossil fuels. If you do have to drive, use an electric vehicle, carpool, or public transportation to minimize how much carbon you’re personally expending.
Next, look at your consumption patterns. Reducing your use of consumer goods and animal products will also help reduce your footprint and maximize sustainability. Every time you buy something, whether it’s online or from the grocery store, think about all the energy it takes to get to you (and then think about all the energy it takes to dispose of the leftover packaging).
Becoming aware of all the energy and waste around you will help you get creative with how you can conserve.
Carbon Offsets
Once you’ve done what you can to reduce your own footprint, neutralize your personal impact by offsetting the rest of your emissions. By purchasing carbon offsets, you effectively invest in a project elsewhere that reduces emissions of carbon dioxide or other greenhouse gases to counter your carbon footprint. These projects range from clean water to wind energy to reforestation and you can choose which projects resonate most with you.
Here are some trusted offset platforms:
- UN Carbon Offset Platform – This is like crowdfunding for climate action. Buying Certified Emission Reductions (CERs) is a direct financial contribution to helping communities run cleaner.
- Gold Standard – This company creates robust environmental standards that not only increase sustainability, but also help companies innovate in a cleaner way.
- TerraPass – Using a monthly subscription-based service, this company focuses on unique sustainable living projects, everything from using farm animal waste as fuel to harnessing landfill gases for power.
How Does This Fit Into My Financial Plan?
If you decide to use carbon offsets to neutralize your footprint, you’ll want to treat it like any other budget expense. Estimate your carbon offset monthly expense, incorporate it into your budget, and reassess your strategy on an annual basis or whenever something significant in your life changes. Naturally, the more you are able to reduce your carbon footprint altogether, the smaller your offset expense will be. If you’d like to learn more on socially responsible investing, reach out to me or an Abacus financial planner to learn how you can create a financial plan that supports your values.
