How do you go Carbon Neutral?

A couple of days back, Infosys announced that the company had reduced its carbon footprint and turned carbon neutral 30 years ahead of the 2050 timeline. So we thought we could look at this story and see how they got here.

The Story

Think of Carbon footprint as the amount of polluting gases (primarily CO2) you release into the atmosphere. Not you per se. But maybe a big corporation. Like Coca-Cola. The carbon footprint of the company includes the net amount of carbon dioxide emitted to produce, store, ship, use and dispose of the millions of Coca-Cola bottles manufactured each year. This means you have to look at your suppliers, your customers, and your own facilities to calculate the true impact. In fact, measuring your total carbon footprint in detail can cost quite a bit of money, especially if you’re a gigantic corporation. But if money is a bottleneck and you’re still serious about your commitment to the environment, you could simply estimate your emissions for a modest consideration and then start planning how to mitigate its impact.

Anyway, let’s look at Infosys — a multi-billion dollar corporation that should have no problem hiring consultants to work out its carbon footprint in detail. Unlike a manufacturing company, Infosys is a service company that mostly does consultancy work. Meaning, you should be able to trace a bulk of their emissions to energy use in its offices and data centres. Also, as another report notes — “Given the scale of its operations, emissions from business travel and employee commutes is particularly high as well". For context, Infosys has over 2,40,000 employees across 126 locations and carbon emissions across these facilities can quickly add up. So the first order of business is to figure out a way to reduce emissions in-house.

And the most obvious way to achieve this objective is by simply switching to renewable sources. If Infosys can partially power its offices and data centres using solar energy, for instance, they can cut emissions by a fair margin. And that’s exactly what they did. According to the company, over 44% of its electricity consumption is now being met through renewable sources.

And while that is an achievement in itself, it does not fully cut it.

So the company also established an internal carbon pricing system. Think of it this way. Emitting carbon has a cost associated with it. This cost is usually borne by the public. When their crops die because of climate change, that’s on you. When their healthcare costs rise, because of filthy air, that’s on you. When sea levels rise and threaten the surrounding ecology, that’s on you as well. And ideally, you should be able to attach a price for all the damage you caused. Once you have a pricing system, you can create more awareness internally. Maybe even incentivize different departments to cut their CO2 emissions. But even this doesn’t fully eliminate the problem.

Sometimes you'll be forced to use power generated by polluting coal plants. In which case, it is quite unrealistic to keep pursuing the lofty ambition of eliminating all emissions. Instead, you can plan to offset it by funding projects that reduce emissions elsewhere.

In fact, Infosys has been working on this little program for a while now. According to a report —

These offsetting programmes focus on rural communities and largely centre around using biogas-fueled, efficient cookstoves. These cookstoves reduce the amount of time spent cooking, dangerous smoke inhalation and free people from the strenuous and time-consuming work of gathering firewood. Infosys estimates that its offsetting programme has reached over 100,000 families, and reports that women and girls are the primary beneficiaries.

So technically by funding these projects, the likes of Infosys can pay to reduce the global greenhouse gas emissions instead of going carbon-free themselves. In effect, it still has the same impact of reducing the company’s carbon footprint. So by leveraging all these programs, the company now claims that the sum of all the greenhouse gases that the company emits into the atmosphere balances out with all the CO2 they take out of the atmosphere effectively rendering Infosys — Carbon Neutral.

Until next time…

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Also don't forget to check our daily brief. In today's issue we talk about why Spotify might have a problem with Joe Rogan and what the uptick in diesel sales might mean for India. Do read the full draft here.