The acceleration of ESG (environment, social and governance) statements adorning corporate websites has been staggering. Response for a multitude of ESG elated questions is now required in every government tender and many corporate versions. 

The rush to establish environmental credibility by using carbon offsets for emissions targets got me thinking, and no, not of climate activists, rather the wisdom of near centenarian Charlie Munger, Vice Chair, Berkshire Hathaway. 

The quote, from Munger at Berkshire 2003 annual general meeting sticks in my mind: “I think that, every time you see the word EBITDA, you should substitute the words "bullshit earnings.””

While the complete video is worth watching, skip to 5:40 for the Mungerism: https://www.youtube.com/watch?v=l82kIjqBtqw

Back to ESG. Companies use carbon offsets from vendors that "apparently" plant and protect trees, install renewables or other environmental activities. They are mostly based on offsets being is paired with tonnes of carbon saved or removed. As the industry is largely unregulated, the quality and integrity of offsetting schemes is questionable as their offset calculations. Is it just a licence to pollute?

Let me leave you with this…the term “carbon footprint” was first promoted and popularised, coincidentally a year after Munger quote in 2004, by BP. They hired a PR firm to push that climate change was not the result of oil consumption, rather, consumers choices. It was coined the Carbon Footprint Calculator.