Carbon credits have long allowed companies to claim that their products or services are “carbon neutral” by relying on mitigation projects elsewhere in the world. But these claims are now facing growing challenges from courts and regulators.

Our latest briefing explores landmark cases and regulatory developments across the EU, the United Kingdom, Australia and the United States. From tech, fossil-fuel and food companies to airlines, climate claims based on carbon credits are increasingly being reviewed by judges and other regulatory authorities. Although their approaches vary across jurisdictions, the direction of travel is clear: misleading offsetting claims are in jeopardy. Regulatory frameworks are evolving too, with the EU tightening rules through the ECGT Directive, while the US continues to rely on the outdated FTC Green Guides.

The way forward? Companies should place internal emissions reductions at the centre of their climate strategies and communicate their progress transparently; policymakers should move towards phasing out all offsetting-based claims and consumers should approach such claims with greater caution.