Australian Firms Ditch Carbon Offsets for Real Emissions Cuts
- Impact X
- 6 days ago
- 3 min read
Corporate leaders are abandoning carbon neutrality claims in favour of absolute emissions reductions as supply chain decarbonisation becomes the new competitive battleground.
Australian companies are fundamentally rethinking their approach to climate action, with industry leaders revealing they're shifting investment away from carbon offsets toward direct emissions reductions across their entire value chains.
The transformation reflects growing recognition that scope 3 emissions – those generated throughout a company's supply chain – represent the largest untapped opportunity for climate impact. For global flooring manufacturer Interface, this accounts for 97% of total emissions, with half of those lying directly with suppliers.
The Death of Carbon Neutrality
"The word net zero does not really mean anything anymore," said Aidan Mullan, Sustainability Manager at Interface Australia & New Zealand, announcing the company's decision to abandon carbon neutrality claims.
Mullan outlined the company's strategic shift:
"Our big decision was we're not being carbon neutral anymore. It's a furphy. We will take that funding and drive innovations to achieve real emissions reductions."
The 30-year sustainability veteran revealed Interface will redirect offset funding toward innovation projects that accelerate actual carbon reduction and storage, targeting carbon negative operations by 2040. This represents a significant departure from the carbon accounting practices that have dominated corporate sustainability strategies for decades.
Supply Chain Regeneration
The shift extends beyond emissions accounting to fundamental business model transformation. Brambles, one of the world's largest circular economy companies, is pioneering what Senior Director Lachlan Feggans calls "regenerative supply networks" – ecosystems designed to deliver climate resilience alongside nature and people-positive outcomes.
"We depend on nature, probably more so than many businesses," Feggans explained, referencing the company's 365 million reusable packaging items across 60 countries. "That's the circular economy that we want to see thrive in the 2030 world."
Brambles' approach includes working directly with timber suppliers to integrate nature-positive programmes at forest level, ensuring sustainable sourcing while measuring biodiversity outcomes. The company is piloting a reforestation project in Tabasco, Mexico, combining productive timber plantations with a 20,000-hectare biodiversity reserve.
Built Environment Transformation
In the property sector, where buildings account for 40% of global carbon emissions, JLL's Connor McCauley is pushing for blockchain-enabled transparency in construction materials. The company envisions a future where carbon intensity follows every product through the construction process, enabling informed purchasing decisions.
"We need more transparency, more accountability," McCauley said. "Whenever you're buying a new product, you're looking at a different type of green cement versus traditional cement. What's the difference in that carbon intensity?"
The challenge is particularly acute given that 80% of buildings that will exist in 2050 have already been constructed, yet retrofit rates remain stubbornly low at 1-2% annually – half the required pace.
The Collaboration Imperative
Beyond Zero Emissions CEO Heidi Lee highlighted the scale of opportunity available through coordinated action. Her organisation's analysis suggests Australia could keep $215 billion in the domestic economy by 2035 through local production of clean energy technologies, creating 53,000 new jobs across mining, manufacturing, and installation.
"There is going to be vast quantities of things like solar panels, batteries, electric vehicles, heat pumps, and wind turbines," Lee said. "We already supply some parts of those supply chains here in Australia – we could just do a little bit more of it."
Strategic Implications
The panel discussion revealed three critical shifts reshaping corporate sustainability:
First, the transition from carbon accounting to carbon elimination, with companies rejecting offset-based strategies in favour of direct emission reductions. This demands fundamental changes to procurement, manufacturing, and partnership strategies.
Second, the emergence of collaborative competition, where traditional rivals share resources and data to address systemic challenges. Interface's participation in the flooring industry's Resi Loop initiative exemplifies this approach, with competitors jointly tackling end-of-life waste management.
Third, the integration of natural capital into corporate decision-making, moving beyond traditional financial metrics to include ecosystem services, biodiversity outcomes, and climate resilience.
Forward-Looking Challenges
Mullan highlighted the urgency of private sector leadership in climate action:
"Industry and business is the only sector really with the resources and the power to make real change. If you're waiting for government, if you're waiting for church, if you're waiting for education, they're too slow."
Despite decades of international climate agreements, atmospheric CO2 concentrations continue rising, underlining the need for accelerated corporate action.
The discussion highlighted a fundamental tension between the urgency of climate action and the pace of systemic change. While individual companies can transform their operations, the scale of required transformation demands coordinated action across entire value chains and geographic regions.
As Australian companies navigate this transition, success will depend on their ability to build resilient supply networks, integrate sustainability into core business processes, and collaborate with competitors to address shared challenges. The companies abandoning carbon neutrality claims today may well be positioning themselves as tomorrow's climate leaders.
