It is increasingly popular for private companies to label their activities as carbon (or climate) neutral, set “net-zero” emissions targets or otherwise seek to green their image by buying offset credits from climate projects. Further, a number of financial market actors have shown a growing interest in participating in carbon credit markets. These developments come with opportunities but also risks and challenges.
The climate impact of projects financed through the sale of carbon offset credits remains difficult to establish. There is also a severe lack of transparency around both the projects and the corporate claims. Without transparency, effective monitoring of the projects and corporate pledges is impossible. At the same time, projects generating carbon credits may also have negative environmental and social impacts.
Carbon Market Watch monitors the use of carbon offsets by companies and investigates the quality of the financed projects, in particular of forestry offset projects. Focusing on the quality of the credits used and their role in companies’ climate strategies, we call for greater transparency in company reporting of the use of offsets. We continue our long-standing engagement in discussions around offsetting and promote alternative models to bring much-needed climate finance to countries that need it the most.
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