The demand for carbon offsets is skyrocketing, despite criticism from some that companies’ use of these tools is a form of greenwashing. Indeed, critics argue that companies purchase offsets — which provide credits for funding carbon capture, reforestation, renewable energy, and other projects — as a substitute for real and necessary carbon emissions reduction.
However, in the midst of the global decarbonization transition, many companies will have no choice but to use these credits to achieve their net-zero targets, at least in the short to medium term, sources say.
As a result, companies planning to purchase credits may find themselves subject to public and investor scrutiny. Therefore, they need to ensure that offsets are verified, relate to the company’s own emissions reduction goals, and are transparent. Boards should require up-to-date data on emissions reduction plans from management, including offset projects, and make sure disclosures are up to par, sources say….
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