Carbon Credits 101
Carbon Credits for Every Step of Your Climate Journey
Rachel Engstrand
January 27, 2025

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Carbon Credits for Every Step of Your Climate Journey

Sustainability is no longer a nice-to-have—it's a must-have. Consumers, investors, and stakeholders are all holding businesses accountable for their environmental impact. However, it can be daunting to understand where carbon credits fit into your sustainability strategy. 

Depending on where they are in their climate journey, companies are using carbon credits in a variety of ways.

According to Allied Offsets’ 2024 Corporate Emissions Data report, there is a wide range of the proportional amounts companies are offsetting their own emissions. ~13% of companies who purchase credits offset 100% of their corporate emissions, while the remaining 87% purchase credits to address some portion of their emissions. This wide spread in the data suggests that most companies are either new entrants to the market or just offsetting a proportion of their emissions, while others are using large amounts of credits to reach net zero goals.

Source: Allied Offsets Corporate Emissions Data & Findings, Nov 2024

In this blogpost, we dive into some of the ways carbon credits can work for your company, no matter what stage of your sustainability journey you’re at.

For those just getting started

For those just getting started in their carbon credit journey, there are multiple ways you can test the waters of how they provide both climate and business impact. You can start small with specific climate initiatives like: 

  • Travel: Offset emissions from a specific team offsite or conference
  • Product: Offset emissions from the production of a specific product, to provide customers with carbon-neutral offerings
  • Services: Offset emissions from a specific building you operate or program you run

By getting started, you’re able to get familiar with the process of credit sourcing and procurement as well as develop expertise in carbon accounting and sustainability reporting. Your team will also begin to better understand their environmental impact, establish measurement systems, and build the skills needed for more comprehensive sustainability initiatives. 

You can also gauge how your stakeholders respond to these initial efforts – seeing which initiatives resonate most with employees, what messaging best captures customer attention, and what metrics matter to investors – helping you shape a more targeted sustainability strategy moving forward.

For companies building on their goals and setting commitments

For companies who are ready to expand their climate action or have set climate commitments, carbon credits are a critical tool for immediately addressing your residual corporate emissions. Carbon credits deliver significant value through Beyond Value Chain Mitigation (BVCM) – funding crucial climate action beyond your direct operations which plays an important role in:

  • Offsetting Corporate Emissions: It is near impossible for most companies to operate with true net zero emissions today. While your company implements long term solutions like renewable energy adoption and supply chain optimization, carbon credits help fill the gap between hard to eliminate emissions from activities like travel or manufacturing.
    • Measure your GHG emissions and develop a plan to reduce emissions in your value chain where possible, through operational or supply chain improvements
    • Complement emissions reduction efforts by using carbon credits to offset any emissions that remain 
  • Securing Climate Certifications: Communicate your impact to stakeholders by securing climate certifications such as The Climate Label and The Climate Pledge.

By investing in carbon credits, you're not just offsetting emissions; you're supporting projects that scale up essential carbon reduction and removal technologies, while achieving your climate goals. 

For trail blazers looking to go above and beyond

For companies striving to do even more and go beyond conventional sustainability practices, carbon credits can be used to support the continuous development of future climate solutions. This could be a commitment to buy future carbon credits from emerging carbon removal technologies like direct air capture, enhanced mineralization, or novel approaches to ocean carbon removal. Such early investments not only secure your future supply of high-quality carbon credits, but also help accelerate the development and commercialization of the next generation of climate solutions.

Taking the next step

Carbon credits are a strategic investment that can be used to advance your most immediate sustainability goals through the broader transition to a low-carbon economy. Every carbon project also has its own powerful story about community impact, ecosystem restoration, or technological innovation that helps bring your sustainability commitment to life for employees, customers, and other stakeholders. 

Whether you're just starting your sustainability journey, working toward established goals, or paving the way for climate innovation, carbon credits can play a valuable role in your strategy. The key is to use them thoughtfully, as part of a comprehensive approach to sustainability that matches your organization's capabilities and ambitions. By choosing the right approach to carbon credits, you can create immediate positive impact while building toward your long-term sustainability goals.

Talk to us to learn more about how our climate solutions can help you reduce your carbon footprint.