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Telstra moves away from carbon offsets to redirect investment in reduction

The decision was driven by increased scrutiny and changing consumer expectations, says CSO Justine Rowe.
Melodie Michel
Telstra moves away from carbon offsets to redirect investment in reduction
Photo by Cameron Tidy on Unsplash

Carbon neutral since 2020 through the purchase of carbon offsets, Australian telecom operator Telstra has decided to redirect its offsetting budget towards carbon reduction projects.

As of July 1, 2024, the company will no longer be offsetting emissions from its operations, investing instead in accelerating its carbon reduction efforts. Alongside this announcement, Telstra also unveiled a newly increased 2030 target of cutting Scope 1 and 2 emissions by 70% (instead of 50%). Its 50% reduction goal for Scope 3 emissions remains unchanged.

Carbon offsetting has been under increased scrutiny in recent years, and the debate around their use for the achievement of net zero targets picked up again in April 2024, when the Science-Based Targets Initiative (SBTi) suggested it might allow companies to use them for Scope 3 decarbonisation – even prompting a letter of concern by H&M Head of Sustainability Leyla Ertur.

Telstra Chief Sustainability Officer Justine Rowe explained that the decision was largely driven by “increased public and industry interest in how corporates are using carbon credits”, as well as consumers “increasingly expecting organisations to take more direct and transparent climate action”. 

“We are now looking to drive more investment in reducing the emissions of our operations rather than offsetting what remains,” she added. “This includes achieving further energy efficiency from our operations, decommissioning technology that isn’t as energy-efficient in favour of new equipment that is, and even sourcing electric vehicles for our field teams.”

Telstra: 8.5 million carbon credits purchased since 2020

The company follows others that recently chose to redirect the money they would normally use on carbon offsets towards more direct reduction initiatives: flooring manufacturer Interface, for example, is set to repurpose millions of dollars this way

Rowe added that the company is proud of its partnership with Climate Active, through which it purchased over 8 million carbon credits, each equivalent to removing one tonne of greenhouse gas emissions from the atmosphere.

In 2023 alone, Telstra purchased approximately 2.26 million carbon credits: over 99% from wind, solar and energy-efficient manufacturing processes in India, and the remaining volume from Indigenous-led savanna burning projects in Australia. These helped offset the telco’s operational emissions (910,607 tonnes), as well as Scope 3 emissions (1.8 million tonnes).

Carbon reduction progress

Since 2019, the company has achieved a 30% reduction in Scope 1 and 2 emissions, reduced Scope 3 emissions by 28% and supported new solar and wind farm projects worth more than A$1.2 billion, to provide renewable energy into the grid. 

“This means we are now contracted to enable renewable energy generation equivalent to 100% of our consumption by 2025,” noted the CSO.