For an Increasing Number of Companies, Carbon Neutrality is the Future

By Elijah Labby Friday, October 9, 2020

An increasing number of companies are choosing to go “carbon neutral” in an effort to decrease their impact on the environment, but what is carbon neutrality, and how will it affect the future of business in the US?

Simply put, carbon neutrality is the process of canceling out one’s carbon emissions via the purchase of a carbon offset — that is, a monetary contribution to CO2 reduction efforts in a particular industry.

Such efforts can come in a variety of forms, including transitioning from gasoline-powered to electric machinery and donating money to organizations focused on reforestation and environmental activism.

Companies from Walmart to AT&T and Amazon have all made carbon neutrality pledges and have contributed large amounts of money to such efforts. While each company’s pledges attempt to reach the same goal of decreased carbon emissions, they vary in their individual expressions.

Amazon’s sustainability pledge includes the purchase of 100 thousand electric delivery vehicles, $100 million in investments in “reforestation projects and climate mitigation solutions,” and investments totaling $2 billion to develop “technologies and services that reduce carbon emissions and help preserve the natural world” by 2040.

Similarly, Walmart is aiming to reach carbon neutrality by the same year. Additionally, in a press release announced last week, Walmart announced its intention to “protect, manage or restore at least 50 million acres of land and one million square miles of ocean by 2030.”

AT&T has also announced a commitment to carbon neutrality by 2035. The company announced the virtualization of large swaths of its network and is moving toward a more energy-efficient infrastructure, as well as decreasing delivery truck fleet size and increasing the use of hybrid vehicles across its network.

The CEOs of these companies see their role in decreasing global carbon emissions as crucial.

“The commitments we’re making today not only aim to decarbonize Walmart’s global operations, they also put us on the path to becoming a regenerative company – one that works to restore, renew and replenish,” said Walmart CEO and president Doug McMillon.

While companies as large as Amazon are pledging to reduce carbon emissions within the coming years, smaller, lesser-known companies are also taking similar steps. According to Forbes, OmniEarth, a geoinformatics company, has also taken steps to offset carbon emissions by replacing pesticides with earthworms.

Further, Lush Cosmetics has decreased plastic packaging on products that do not require it and uses 100% renewable energy from wind and hydraulic energy generation technologies.

"The message is quite simple: there is no time to waste, we absolutely all have to address the current environmental situation,” said Agnes Gendry of the Lush Ethical Buying Team. “We all have to be conscious, determined and imaginative and constantly looking for ways to reduce our impact."

These changes are driven in part by social and political pressures on companies to take responsibility for their environmental practices.

A poll from the Pew Research Center found that three-quarters of Americans are concerned about the state of the environment, putting heat on companies to improve their environmental activism efforts.

Likewise, the legislative environment around climate change is driving the introduction of bills such as the Green New Deal and the Energy Innovation and Carbon Dividend Act of 2019, which aims to reduce carbon emissions significantly within the coming decades by implementing a compounding tax on each ton of such emissions.

The bill would charge a tax of $15 on each ton of carbon emissions in its first year. According to the Atlantic, taxes would then “[rise] by at least $10 a year—except in years when pollution does not decrease fast enough, in which case the fee would increase by $15.” By 2030, the article states, “the United States could see a carbon price in excess of $100 a ton, adding at least 90 cents to the cost of a gallon of gas.”

Such a tax was lauded by Democratic legislators upon its introduction.

“We didn’t leave the Stone Age because we ran out of rocks,” said Rep. Dean Phillips (D-MN) upon introduction of the bill. “We found a better way of doing things. Climate change is an urgent problem and we need to reach a solution as quickly as possible. The Energy Innovation and Carbon Dividend Act empowers a new generation of innovators to do just that.”

This legislative environment is unlikely to change amid extreme weather conditions in America, including widespread wildfires in California and hurricanes rattling the east coast.

These bills and corporate decisions have come despite, or perhaps as a reaction to, President Donald Trump’s decision to withdraw the United States from the Paris Climate Agreement, a historic international deal that would have seen American governmental measures taken to decrease carbon emissions across the country.

At the time, Trump said that the terms agreed upon in Paris would have major economic repercussions.

“The cost to the economy at this time would be close to $3 trillion in lost GDP and 6.5 million industrial jobs, while households would have $7,000 less income and, in many cases, much worse than that,” he said.

However, the Natural Resources Defense Council claims that it could actually “have major global rewards—to the tune of some $19 trillion.”

Despite the US’s withdrawal from the agreement, numerous multinational companies, including Ford, General Motors, and Hewlett-Packard, have continued to implement the Agreement’s required changes.

Whatever the case, it is clear that during a time in which climate change is causing rising sea levels and increasingly extreme weather conditions, the pledges made by these companies and politicians will only become more relevant.

About the Author


Headshot of Elijah Labby

Elijah Labby is a graduate of the National Journalism Center. He has previously written for Broadband Breakfast, a technology and internet policy website.

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