Business ecology: Compensation is cheating

Behind this slightly provocative title is a sad reality: too many companies are content to think about their ecological policy through compensation. And this is very harmful to the ecological transition, the real one.

In recent years, companies have come under increasing pressure to adopt a green transition strategy. Private organizations are being asked to take into account the global ecological crisis, global warming and biodiversity degradation, and adapt their activities to keep up with a changing model.

For this, there are a multitude of levers: impact reduction, transformation of business models, circular economy, sobriety… But one of these levers is particularly high: compensation. The idea is simple: when a company causes damage to the environment, it can compensate, through an equivalent positive action. The most classic example is carbon offsetting: we emit CO2, but we plant trees, which absorb it to compensate.

It is this mechanism that is now at the heart of many environmental policies in companies (and not only). And that’s a real problem, because compensation should only be a last resort. It’s time to say: compensating is a bad way of approaching the environmental problem, a strategy even counterproductive.

Ecological transition: it pays, it doesn’t pay off

First of all, it should be remembered that the very concept of ecological compensation is very imperfect. The idea of ​​compensation is defended by those who have an accounting view of the reality of ecosystems. In this logic, a plus would be worth a minus, as in a financial statement. But the environmental reality is much more complex.

In fact, a tree planted here or there does not offset the carbon emissions generated by the use of fossil fuels, for example. The temporalities are not the same, the carbon absorbed is not absorbed in the same proportion as the carbon emitted. Ecologically, the damage caused by human action is never fully compensated by positive action. How to compensate for the destruction of an ecosystem, the loss of a living species, pollution and its consequences on health? In fact, it’s almost impossible. At the scientific, factual level, ecological compensation is always imperfect, partial. In short, to say that one compensates is an abuse of language, a bit like when one claims to “compensate” for a moral or physical damage through monetary compensation.

Compensation: useful but far from miraculous

Nonetheless, compensation has a role to play in the ecological transition. By definition, human activity transforms ecosystems and, in order to limit the negative consequences of these transformations, it will be necessary, at one time or another, to implement compensation measures. Develop forest areas, create living spaces for biodiversity in urban areas, clean soil and water, restore ecosystems, absorb excess CO2, for example.

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In the last part of the IPCC report on the mitigation of global warming, the entity also recalls that in order to avoid an uncontrolled climate, and in the face of emissions that have not fallen for decades, carbon offsetting (natural or artificial) will certainly have to be massively developed. . Imperfect as it may be, offsetting will therefore have to be an integral part of the climate transition. And this applies to other big ecological issues: biodiversity crisis, various types of pollution, destruction of ecosystems. If some ecological damage is unavoidable, it will be necessary to take measures to repair it, to compensate for it, in order to preserve the conditions of a viable ecosystem for human life.

The problem is that compensation now occupies a very important place in the environmental strategy of many socio-economic actors. It even became the basic reflection of environmental action. We emit CO2, we compensate. And, by some miracle, we became “carbon neutral”, “green” or “climate-friendly”. When in fact… no.

Avoid – reduce – compensate, in that order

Environmental policy experts have long defined the sequence that should guide the environmental strategy of companies in particular. This sequence, called ERC, AVOID – REDUCE – COMPENSATE, should serve as a methodological guide for those who wish to contribute to the ecological transition. And if these three words are placed in this order, it is no wonder. Compensation comes last because that’s where it comes into its own. We must only compensate for what is impossible to avoid or reduce. Compensation is the last resort for incompressible and unavoidable damage.

However, when we look at the environmental policy of the majority of actors who practice ecological compensation, we realize that this actually has the role of a simple palliative, which we apply by default when we don’t know what else to do. From now on, it is necessary to communicate well to say that we are committed to the ecological transition, so compensation allows, at a lower cost, to give the illusion of ecological action. As far as climate change is concerned, it has even become fashionable: now everyone is carbon neutral, from laundry detergent cans to airports, to the point where we wonder where the 60 billion tons of CO2 that are added to the atmosphere are. every year and is worsening the climate crisis.

Compensating for the thoughtlessness of a true ecological transition

Everything happens as if, through lack of reasoning, we were compensating. Because to Avoid and Reduce, obviously we would have to think. Think differently about your business model, think differently about your product design strategies, think differently about your place in the global economic system. And this is complex. More complex, in any case, than paying a company to plant some oaks or some mangroves somewhere.

The true ecological transition involves truly reducing the damage we cause to nature at the source, rethinking our relationship with it and with the living, profoundly transforming our economic and social models to bring them into greater harmony with our ecosystems. For companies, the challenge is obviously enormous. It is a logic of profound change, particularly with regard to returns and financial returns on investment, which can no longer be forever disconnected from environmental or social realities.

So it’s easy to understand that today it’s easier to look away and prefer compensation instead of feeling helpless. But sooner or later, and preferably sooner than too late, we will have to get out of this thought process and get to work.

Compensation distracts us from real problems

Meanwhile, compensation diverts us from actions that could be implemented today to act in the prevention and reduction of our impacts. All the time, the money and energy that companies today invest in ecological compensation are not invested in policies that aim to avoid and reduce. However, this is what is urgently needed today.

The situation is even worse: compensation, through its rhetoric, relativizes the urgency of acting on our impacts at the source. Why would a company that everywhere proclaims that it is “carbon neutral” take the time to reduce its CO2 emissions? After all, calling me carbon neutral creates a kind of immunity totem: if I’m already carbon neutral, there’s no need to do more. The optimistic and self-satisfied discourse surrounding compensation strategies anesthetizes us, makes us forget the hierarchy of environmental problems.

To avoid this, CSR efforts today must focus on something other than offset projects that are, by definition, incidental to the ecological transition. Emphasis must be placed on every small investment, whether structural, organizational or technological, that allows us to reduce our environmental impacts, and that would be a real step in the ecological transition.

Especially since these steps follow an incremental dynamic: the return on ecological investment will only strengthen over time, as new investments and synergies are found in the future. It will take years to bring to light economic models centered on sobriety, or on greener production processes. As of today, it will be possible to have a short-term impact, but above all, a tenfold impact in the long term. In any case, not investing today means having one more delay that we can no longer bear.

Putting compensation back in its place

It is not, therefore, a matter of completely denigrating ecological compensation, nor of saying that it has no place in environmental policies. It is simply a matter of putting it back in its proper place, that is, as a last resort. Because today, obviously, compensation is used in excess, to the point that it seems more and more like a way of evading commitments, of seeming to do nothing.

On this subject, it is also worth remembering that when the IPCC itself says that compensation will be necessary, this is an acknowledgment of failure. What the IPCC is really saying is that offsetting has become necessary because of our lack of action to limit our emissions at source in recent decades. It is therefore precisely because we have wasted too much time without acting on the substance that we are reduced to having to invest in absorbing carbon.

It is this trap that companies must avoid today. It is no longer possible for a company committed to a sincere approach to the ecological transition to continue investing in compensation, highlighting it, communicating it, without investing first of all in a true environmental strategy, based on the transformation of business models and sobriety. It is no longer possible to see companies laughing about their so-called neutrality, without having implemented a business model compatible with planetary limits.

There may be players who are already doing this job well, and for whom compensation is effectively only a last resort after they have really changed their model. But they should be very few, given the enthusiasm generated by offsets in general and the little progress made by economic sectors in the ecological transition. For the vast majority, we will have to stop hiding behind compensation so we don’t actually have to act. Is fast.

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