Carbon offsetting projects up close: Rethinking voluntary carbon offsetting’s true value with Director of Sustainability at Philips  

Philips, is the first health technology company to have its entire value chain emissions reduction targets approved by the Science Based Targets initiative (SBTi). It integrates voluntary carbon offsetting as a strategic complement to its comprehensive decarbonisation efforts. 

In April 2024, Director of Sustainability at Philips, Alexandros Theodoropoulos, conducted field visits to three carbon offsetting projects in Africa: Borehole Uganda, TIST Kitalu, and Cookstove Hifadhi I & II. Accompanied by experts from EcoAct’s Nature-Based Solutions Team and local partners, Alexandros explored firsthand the projects Philips supports in Africa, showcasing the impactful blend of climate impact, environmental conservation, and community support that carbon offsetting projects can facilitate. 

Despite Africa’s minimal contribution to global emissions, it bears a disproportionate burden of climate change impacts, further compounded by socioeconomic challenges. The projects supported by Philips and EcoAct demonstrate how carbon offsetting projects can deliver tangible benefits aligned with broader Sustainable Development Goals (SDGs), offering practical solutions to pressing local and global issues. 

In Uganda, the Borehole Uganda Project enhances community health and resilience by providing access to clean water through the installation and repair of hand-pumped boreholes in arid regions. The project not only alleviates the daily burden on women and children but also decreases deforestation and reduces greenhouse gas emissions by reducing the need for wood fuel. In Kenya, the Kitalu Project leverages the TIST Programme to combat land degradation through reforestation and sustainable farming practices. By planting trees, local farmers not only stabilise the soil and improve water retention but also benefit economically from the sale of carbon credits. Similarly, both Cookstove Hifadhi I and II Projects transform household energy practices by distributing efficient cookstoves, which cut wood consumption by 60%, decrease carbon emissions, and improve indoor air quality—significantly enhancing health outcomes and providing over 200 local jobs. 

Following the field visits, I had the opportunity to sit down with Alexandros to unpack his experiences, focusing on the immediate and transformative impacts of these projects on the local communities, and reflecting on how these experiences shape Philips’ approach to climate action and corporate social responsibility. 

Given the significant role these projects play in supporting local communities while contributing to environmental conservation, it naturally leads to a broader question about Philips’ strategic objectives. How do voluntary carbon offsetting projects fit into Philips’ overall net-zero strategy? 

Philips began its journey toward sustainability early, aligning with the Paris Agreement as soon as it was signed in 2015. We were among the first companies to establish targets for Scope 1 and 2 emissions and, despite limited guidance at the time, we later expanded our efforts to include Scope 3 emissions, which encompass business travel and logistics.  

Over time, we have analysed and measured our operational carbon footprint, which covers all aspects of transportation and distribution. This thorough assessment is crucial as it represents the full scope of Philips’ operational impact. Recognising the time required to achieve a 90% reduction in emissions – essential for meeting our net-zero targets – it was clear that focusing solely on reduction was not enough. 

To address this, we began investing in voluntary carbon offsetting projects, which serve to address Philips’ operational residual emissions. Our collaboration with EcoAct, a trusted partner in developing offsetting strategies as well as nature and technology-based solutions projects, has helped us develop a portfolio that goes beyond meeting Sustainable Development Goal 13 for climate action. Our aim is to ensure that our contribution goes beyond climate impact and enhances the lives of people in the communities where these projects are implemented.   

It is interesting to see how these strategic decisions are strongly connected with Philips’ broader sustainability goals. Why has Philips predominantly engaged with voluntary carbon offsetting projects In Africa? Is there a link between Philips’ strategy and the specific projects that EcoAct has developed there? 

Availability and quality control are key reasons for our focus in Africa, especially given EcoAct’s strong involvement in the region. Initially, this was where our efforts were most needed, though I understand EcoAct has since expanded to more regions globally. 

There is great potential to make a difference in Africa. For example, cookstoves, which may not be as relevant in the Americas, are incredibly beneficial here. Boreholes, too, are essential for accessing clean water in Africa’s arid regions. While the concept of boreholes can be applied in other dry areas around the world, the need was particularly acute here when we first started. 

Then there is the Kitalu Project, which stands out not only for the carbon impact it provides but also as a remarkable project in terms of knowledge sharing and enhancing community well-being. It is a fantastic example of how we can impact lives beyond just environmental benefits. 
 
Could you share which aspects of the different projects you found most interesting during the field visits? Perhaps there were elements you were aware of but found particularly exciting to see firsthand, or even surprising discoveries that stood out to you. 

I believe it is the extreme positive impact that financing these projects has on local communities, creating sustainable long-term livelihood enhancements. Take the example of the boreholes. Ensuring communities have access to healthy drinking water without the need to boil or disinfect it – something often not done adequately – has made a significant difference.  

Before the boreholes, people had to walk for hours to fetch water from contaminated sources, then spend more time treating it. This entire process could take up to four hours before they could even begin cooking or other household activities, let alone attend to their business or children. 

Now, with the boreholes, it is as simple as pumping a few dozen times to fill up a jerry can. The time saved is incredible and has a multitude of benefits. One aspect that really struck me, and something we didn’t fully realise before, was the gender-specific risks associated with water collection. Women, often walking long distances alone or with their children, were vulnerable to harassment and threats. This was not something that initially came to mind, but seeing it firsthand made me understand the basic, yet essential, challenges these communities face—challenges that are exacerbated by global inequalities and often overlooked by those in more privileged regions. 

These insights showed us the profound impact that such seemingly simple solutions can have on everyday lives. It is not just about providing water or stoves; it is about fundamentally enhancing safety, health, and well-being for these communities. Witnessing these changes was truly eye-opening and reinforced the importance of our continued efforts in these projects. 

It is truly impactful to see how these projects reshape day-to-day activities that we often take for granted. From your conversations with the local communities, what were their main priorities and demands for the continuation of these projects? Were there any specific needs or suggestions they shared that particularly resonated with you? 

One of the recurring themes that stood out to me was the strong appreciation from the people on the ground for the funding provided through the carbon offsetting projects. This funding ensures the continuation, extension, and renewal of these projects, creating employment opportunities for a fantastic team.

We interacted with artisans in each village who are dedicated professionals responsible for maintaining and repairing the cookstoves. These individuals, drawn from the communities themselves, earn a fair daily wage while giving back to their own community. Their dedication is remarkable, and without the project, they would need to find other jobs. They are incredibly skilled and committed to their work. 

What impressed me is how this creates a self-sustaining mechanism within the community. By providing employment and ensuring the maintenance of these projects, we are helping to activate a cycle of ongoing benefit. It is a powerful example of how targeted support can foster resilience and self-reliance in these communities. 

I believe one of the aspects that my colleagues, who were also part of the field visits, mentioned was seeing how proud the local communities were when showing the farms or cooperatives they had built. This empowerment and training seem to be key objectives of these projects, enabling communities to organise and develop independently.  
 
One of the reforestation projects we visited was truly impressive. It was a closed-loop system where not only was knowledge exchanged, but they also had a nursery producing small avocado plants. These plants were distributed within the community at a very low price compared to the market, benefiting everyone involved. The new plants were incorporated into the project, sharing knowledge and resources effectively. 

I wasn’t surprised, but I was certainly relieved and happy to see that they confirmed what I believe is the ideal approach to agriculture: chemical-free and fully organic. This method is much more efficient and doesn’t have the harmful side effects that chemicals and pesticides can cause. Previously, people might get sick from overusing these substances, but now, through this project, they have a more efficient and cost-effective model. This success is largely due to their willingness to share knowledge and strive to become the best farmers they can be with the resources available. 

What is truly inspiring is that this isn’t just a one-way street. There is a lot we can learn from their approach. Perhaps we should rethink some of our practices in the West. By adopting some of these organic and community-focused methods, we might not only improve our agricultural efficiency but also do so in a way that is healthier for people and the environment. It is a great example of mutual learning and how we can benefit from each other’s experiences. 

When you visited these projects, what kind of impact did it have on you in terms of quality assessment and your future decisions about engaging with voluntary carbon offsetting projects? How did seeing these projects firsthand influence the way you talk about voluntary carbon offsetting to your colleagues and other stakeholders? Did it change your perspective on the value and implementation of these projects? 

I think it made me more aware of the broader benefits that the financial mechanism of voluntary carbon offsetting can achieve. For instance, access to clean water, the improvement in health and well-being of the people involved in these projects, and the employment opportunities created. These benefits are far more valuable, in financial terms, than the cost Philips pays for the carbon credits. 

It really amplifies the impact beyond just the environmental effects and carbon avoidance or removal. The positive impact on the people on the ground is very clear and very significant. I think I will be more conscious about highlighting these aspects in my future conversations than I was before visiting the projects. 

Lastly, do you believe that the mechanism of voluntary carbon offsetting and the role of voluntary carbon markets are well understood by local actors, or do you think that further efforts are needed to enhance their understanding?  

Yes, the benefits are vivid and clear to the local actors involved in the voluntary carbon offsetting projects in the countries where they are implemented. However, there is a stark contrast when it comes to the off-takers, customers, and legislators in the West who play a key role in voluntary carbon markets but often do not fully understand the many positive side effects of financing these projects.  

I have noticed that many decision-makers are not aware of all the details before making decisions or drafting new legislation. It would be beneficial for everyone in the market to contribute insights and educate stakeholders, helping to inform relevant parties about the comprehensive impacts of these projects. Through a collective effort of sharing knowledge and experiences, we can ensure a better understanding and more informed decision-making in the future. 

Thank you, Alexandros, for sharing your experiences and insights. They align closely with our perspective at EcoAct. With numerous projects employing varied methodologies and generating diverse impacts, comprehending their overall effect can be challenging. This underscores the importance of engaging in further discussions, educating stakeholders, and sharing knowledge to better understand the significant impacts these projects have.  

Your firsthand observations provide valuable insight into the true value of these projects, demonstrating how voluntary carbon offsetting can be a powerful tool for both environmental conservation and community development when implemented thoughtfully and responsibly.