What is carbon neutral?

When insurance companies talk about being carbon neutral, they mean balancing a measured amount of carbon emissions with an equivalent amount that is captured through one process or another. With net emissions being zero it becomes ‘carbon neutral’.

The most environmentally aware insurance companies will always seek to firstly reduce their own emissions and those of their customers. This will include making their buildings more eco-friendly and cutting energy use. Customers will be encouraged to drive more fuel efficient cars and given advice and incentives to reduce their carbon footprint. Only after this will unavoidable emissions be offset.

Carbon emissions can be offset in a number of ways. For example, carbon dioxide released into the atmosphere from burning fossil fuels can be balanced against renewable energy that creates a similar amount of useful energy, so that the carbon emissions are compensated. More dubiously, insurance companies can pay others to remove carbon emissions by planting trees or by funding 'carbon projects' that lead to the prevention of future greenhouse gas emissions, or by buying carbon credits to remove them through carbon trading.

Always be wary of companies who claim to be carbon neutral by simply paying for their emissions to be offset!

Avoid ‘green-wash’

Avoid insurance companies that cynically allude to being environmentally friendly by introducing token gesture benefits. For example, always inquire about what they are doing to cut their own emissions, how they are contributing to combating climate change, and find out if they give discounts for low emission vehicles and eco-friendly initiatives. More tellingly, ask them what car their CEO drives!

Did you know?

Samsø island in Denmark is the largest carbon-neutral settlement on the planet, with a population of 4200, based on wind-generated electricity and biomass-based district heating. They currently generate extra wind power and export the electricity to compensate for petro-fuelled vehicles. There are future hopes of using electric or biofuel vehicles.

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