A carbon footprint is defined by the greenhouse gases (GHG) emissions associated with any specific activity or transaction. The carbon footprint is often broken down into 3 scopes of emissions:

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(i) scope 1 emissions are direct emissions and cover GHG emissions by an organization. This could be the emissions that are directly generated by manufacturing goods. It also includes fuel combustion, company vehicles, and fugitive emissions.

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(ii) scope 2 emissions are indirect GHG emissions from consumption of purchased electricity, including heating, steaming, or cooling.

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(iii) scope 3 emissions are all other indirect emissions (or value chain emissions) related to the company’s activities, including emissions caused by vendors within the supply chain, outsourced activities, employee travel, and commuting. In many industries, Scope 3 emissions account for the largest amount of GHG emissions.

When organizations offset their carbon footprint, funds paid are used to support projects that reduce, capture, or avoid greenhouse gases (GHG) emissions in an amount equivalent to that of their calculated carbon footprint. The funds paid are dedicated to purchasing and canceling third-party certified carbon offsets. The carbon offsets made available on the platform are Voluntary Emission Reduction (VER) units, certified by various credible and internationally recognized carbon certification standards such as the VCS, the Gold Standard, American Carbon Registry, and Climate Action Reserve, as well as Certified Emissions Reduction (CER) units certified by the United Nations. The offset price that organizations pay is the total cost to deliver the carbon offset.

Each carbon offset (or carbon credit) represents 1 tonne of greenhouse gases (GHG) emissions, in carbon dioxide (CO2) equivalent, that has been reduced, captured, or avoided through the implementation of a project activity that would not have taken place without the sale of carbon offsets. The terms "carbon offset" and "carbon credit" can be used interchangeably.

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Carbon offsets are issued by independent carbon certification bodies once a project has demonstrated it has reduced, avoided, or captured emissions of carbon, following the guidance of the respective carbon certification body it is certified or registered with. Each emission reduction needs to meet basic principles to qualify as carbon offset: be additional, be measurable and auditable, be permanent, and be unique.

Emission reductions enabled by project activities and certified to a credible carbon certification body must adhere to the principle of “additionality” to be materialized and monetized as carbon offsets. This means that the projects are being implemented as a result of the (expected) proceeds from the sale of carbon offsets, enabling project developers to overcome the difficulties they face. In other words, organizations are not supporting a project that would have been carried out anyway.

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The carbon offsets are funding additional carbon mitigation. Often, projects are not financially attractive to investors without the sale of these carbon offsets and would therefore not materialize. The additionality case is checked by third-party auditors and the respective carbon certification body at project inception.

Science is clear: a quantity of greenhouse gas (GHG) emissions emitted in one place has the same global warming potential as the same quantity of GHG emissions emitted anywhere else. It is the same thing for a quantity of GHG emissions reduced or avoided. Climate change is happening due to the increasing concentration of GHG emissions in the atmosphere and it is of the utmost importance to reduce the pace at which GHG emissions enter the atmosphere. One way to do so is to support low-carbon and modern project activities that displace high-carbon and traditional alternative activities. In many sectors and countries, these low-carbon activities are uneconomical and face barriers that prevent them from taking place. As a result, they are allowed to sell carbon offsets, which enable projects to take place and reduce emissions. By offsetting its carbon emissions, an organization is outsourcing emission reductions and mitigating climate change by supporting relevant project activities.