How to use carbon offsets credibly

Despite a strong surge in demand, carbon offsetting through credits remains a contentious subject within the sustainability discussion, with experts on both sides regularly debating in public forums over the how’s and why’s it does or doesn’t work. For some, it offers a route to help us navigate to a sustainable future. To others, it’s just another ineffective strategy that is high-cost and low-impact.

The use of carbon offsets has become a popular tool for businesses that are looking to account for, compensate, or reduce their carbon footprint. It is essential that carbon offsets are used credibly to ensure that these investments genuinely contribute to climate action.

To use carbon offsets correctly, we first must understand what they are. A carbon offset is a financial investment in projects that avoid, reduce, or sequester and store greenhouse gas emissions. These projects can come in various forms such as reforestation and afforestation, rolling out renewable energy, carbon storing agricultural practices, better waste management and many others. The sentiment behind carbon offsets is to balance out carbon emissions by investing in projects that reduce the equivalent amount of carbon elsewhere.

The Oxford Offset Principles (2020) lays out a robust framework for credible carbon offset usage. These principles emphasise the significance of ensuring that carbon offsets genuinely contribute to climate action (1).

The principles of credible offsetting on route to net zero are clearly outlined in the framework. Prioritising the reduction of your own emissions is the first premise. Carbon offsets should complement, not substitute, efforts to minimise your own emissions. Secondly, ensuring that you are choosing high-quality carbon credits that are verified, certified, and adhere to recognised standards. The next principle is additionality, make sure you are investing in a project that wouldn’t have occurred without your support. Simply, it should be an additional reduction in emissions. Credible offset developers and retailers should be transparent about their projects and the impacts they have. Finally, short term offsets will not deliver the same sustained impact as long term investments, so consider supporting longer term offset project.

Whilst carbon offsetting has its critics, it can be a useful method to demonstrate a business’s commitment to climate action. The most common question that is asked by critics is how can we be sure that a carbon offset project is producing high quality carbon credits? Quality issues of course vary and depend on the project in question. That said, they are usually rooted in one or more of the following practices:

Additionality: Was the carbon that generated the credit going to have been avoided / stored / removed anyway without financing from the carbon market? If so, then the claim cannot be made (but often is) that a company has genuinely offset their own emissions through the purchasing of those credits.

Permanence: The carbon you emit into the atmosphere is going to be there for 100 to 200 years. Therefore, any carbon offset through the sale of credits needs to be kept from entering the atmosphere for at least that long, or else the credit is void.

Leakage: If a credit generating project has an indirect effect of creating more carbon emissions elsewhere, then the carbon saved through the project is again reduced or void. For example, picture an area of forest protected through a credit generating forestry project. If the protection of this forest leads to deforestation elsewhere then the credits sold aren’t worth the same level of carbon that they represent.

When carbon offsets are used correctly, they can offer significant benefits to the planet and the economy, providing a market-based instrument that helps to drive investment in nature-restoration or the transition to a greener, cleaner economy. But how can you utilise carbon offsets credibly? Firstly, you need to calculate your existing emissions. It is important to consider all three scopes of emissions: direct, indirect, and supply chain related emissions. Once you have calculated your emissions, you then need to set your net zero target and carbon reduction goals. Start by prioritising emissions that you have the most control over, you should always reduce emissions at the source to begin with.

Now you can choose your offset provider. Research and select reputable offset providers. Those that are reputable will be registered with recognised offset standard organisations. Have a look at the specific projects they offer and choose those that relate best to your business. Maybe there is a project that aligns with your brand identity or business focus or locations? Or one that resonates with your clients? Be sure to choose your provider wisely through adequate research.

Finally, you must monitor and report your carbon calculation, reduction and offset activities. Transparency is key and by keeping your stakeholders informed on your reduction efforts and reasons for purchasing offsets demonstrates commitment to climate responsibility. When monitoring be sure to review the progress of your projects. Innovations and standards are constantly evolving in this fast-paced space, and you should keep an eye out for improved and best practice strategies for using carbon Offsets in your portfolio of climate actions.

Navigating your way through carbon offsetting can be quite difficult, and at times confusing. When used responsibly and correctly they can be a valuable tool for achieving investment in nature and the transition to a greener, cleaner economy. It is important to follow the Oxford principles, so that you can make informed decisions and ensure credibility in your approach.

At mdsustain we can help your organisation to understand the carbon credit market and how to identify and purchase credible carbon offsets. Our ‘Navigating credible carbon offsets’ module is included within our sustainability packages or can be purchased as an individual session. For more information, please see our sustainability services, or email one of our sustainability specialists at

Lead the change, get sustainable.