The Role of Carbon Offsets in the Net-Zero Journey
Our Privacy Policy has been updated! The Conference Board uses cookies to improve our website, enhance your experience, and deliver relevant messages and offers about our products. Detailed information on the use of cookies on this site is provided in our cookie policy. For more information on how The Conference Board collects and uses personal data, please visit our privacy policy. By continuing to use this Site or by clicking "OK", you acknowledge our privacy policy and consent to the use of cookies.  Our Privacy Policy has been updated! Detailed information on the use of cookies on this site is provided in our cookie policy and our privacy policy. 
TCB Tourch
Loading...
  • logoImage
  •  
    • US
    • EUROPE
    • ASIA
  • 2

    Close
    • Insights
        • Insights
        • Explore by Center
          • Explore by Center
          • CED
            Committee for Economic Development

          • Economy, Strategy & Finance

          • Governance & Sustainability

          • Human Capital

          • Marketing & Communications

        • Explore by Content Type
          • Explore by Content Type
          • Reports

          • Upcoming Webcasts

          • On Demand Webcasts

          • Podcasts

          • Charts & Infographics

        • Trending Topics
          • Trending Topics
          • Artificial Intelligence (AI)

          • Navigating Washington

          • Geopolitics

          • US Economic Forecast

          • Sustainability

          • Future of Work

    • Events
        • Events
        • Upcoming Events
          • Upcoming Events
          • People First: Opportunity and Access

          • CHRO Summit: Navigating through a Tsunami of Change

          • Future: People Asia

          • Executive Compensation in a Disruptive World

          • CED Distinguished Leadership Awards Celebration

          • The 2025 IBI/Conference Board Health and Productivity Forum

          • Explore all Upcoming Events

        • Member-Exclusive Programs
          • Member-Exclusive Programs
          • Center Briefings

          • Experts Live

          • Roundtables

          • Working Groups

          • Expert Briefings

    • Data
        • Data
        • Consumer Confidence Index

        • Data Central

        • TCB Benchmarking

        • Employment Trends Index

        • Global Economic Outlook

        • Leading Economic Indicators

        • Help Wanted OnLine

        • Labor Markets

        • Measure of CEO Confidence

        • Human Capital Benchmarking &
          Data Analytics

        • CMO+CCO Meter Dashboard

    • Centers
        • Centers
        • Our Centers
          • Our Centers
          • Committee for Economic Development

          • Economy, Strategy & Finance

          • Governance & Sustainability

          • Human Capital

          • Marketing & Communications

        • Center Membership
          • Center Membership
          • What Is a Center?

          • Benefits of Center Membership

          • Join a Center

    • Councils
        • Councils
        • Find a Council
          • Find a Council
          • Economy, Strategy & Finance

          • Governance & Sustainability

          • Human Capital

          • Marketing & Communications

        • Council Membership
          • Council Membership
          • What is a Council?

          • Benefits of Council Membership

          • Apply to a Council

    • Membership
        • Membership
        • Why Become a Member?
          • Why Become a Member?
          • Benefits of Membership

          • Check if Your Organization is a Member

          • Speak to a Membership Associate

        • Types of Membership
          • Types of Membership
          • Council

          • Committee for Economic Development

          • Economy, Strategy & Finance

          • Governance & Sustainability

          • Human Capital

          • Marketing & Communications

          • Insights

        • Already a Member?
          • Already a Member?
          • Sign In to myTCB®

          • Executive Communities

          • Member-Exclusive Programs

    • About Us
        • About Us
        • Who We Are
          • Who We Are
          • About Us

          • In the News

          • Press Releases

          • Our History

          • Support Our Work

          • Locations

          • Contact Us

        • Our Community
          • Our Community
          • Our Leadership

          • Our Experts

          • Trustees

          • Voting Members

          • Global Counsellors

          • Careers

          • This Week @ TCB

    • Careers
    • This Week @ TCB
    • Sign In to myTCB®
      • US
      • EUROPE
      • ASIA
    • Insights
      • Insights
      • Explore by Center
        • Explore by Center
        • CED
          Committee for Economic Development

        • Economy, Strategy & Finance

        • Governance & Sustainability

        • Human Capital

        • Marketing & Communications

      • Explore by Content Type
        • Explore by Content Type
        • Reports

        • Upcoming Webcasts

        • On Demand Webcasts

        • Podcasts

        • Charts & Infographics

      • Trending Topics
        • Trending Topics
        • Artificial Intelligence (AI)

        • Navigating Washington

        • Geopolitics

        • US Economic Forecast

        • Sustainability

        • Future of Work

    • Events
      • Events
      • Upcoming Events
        • Upcoming Events
        • People First: Opportunity and Access

        • CHRO Summit: Navigating through a Tsunami of Change

        • Future: People Asia

        • Executive Compensation in a Disruptive World

        • CED Distinguished Leadership Awards Celebration

        • The 2025 IBI/Conference Board Health and Productivity Forum

        • Explore all Upcoming Events

      • Member-Exclusive Programs
        • Member-Exclusive Programs
        • Center Briefings

        • Experts Live

        • Roundtables

        • Working Groups

        • Expert Briefings

    • Data
      • Data
      • Consumer Confidence Index

      • Data Central

      • TCB Benchmarking

      • Employment Trends Index

      • Global Economic Outlook

      • Leading Economic Indicators

      • Help Wanted OnLine

      • Labor Markets

      • Measure of CEO Confidence

      • Human Capital Benchmarking & Data Analytics

      • CMO+CCO Meter Dashboard

    • Centers
      • Centers
      • Our Centers
        • Our Centers
        • Committee for Economic Development

        • Economy, Strategy & Finance

        • Governance & Sustainability

        • Human Capital

        • Marketing & Communications

      • Center Membership
        • Center Membership
        • What is a Center?

        • Benefits of Center Membership

        • Join a Center

    • Councils
      • Councils
      • Find a Council
        • Find a Council
        • Economy, Strategy & Finance

        • Governance & Sustainability

        • Human Capital

        • Marketing & Communications

      • Council Membership
        • Council Membership
        • What is a Council?

        • Benefits of Council Membership

        • Apply to a Council

    • Membership
      • Membership
      • Why Become a Member?
        • Why Become a Member?
        • Benefits of Membership

        • Check if Your Organization is a Member

        • Speak to a Membership Associate

      • Types of Membership
        • Types of Membership
        • Council

        • Committee for Economic Development

        • Economy, Strategy & Finance

        • Governance & Sustainability

        • Human Capital

        • Marketing & Communications

        • Insights

      • Already a Member?
        • Already a Member?
        • Sign In to myTCB®

        • Executive Communities

        • Member-Exclusive Programs

    • About Us
      • About Us
      • Who We Are
        • Who We Are
        • About Us

        • In the News

        • Press Releases

        • This Week @ TCB

        • Our History

        • Support Our Work

        • Locations

        • Contact Us

      • Our Community
        • Our Community
        • Our Leadership

        • Our Experts

        • Trustees

        • Voting Members

        • Global Counsellors

        • Careers

        • This Week @ TCB

    • Careers
    • Sign In to myTCB®
    • Download TCB Insights App
  • Insights
    Insights

    Our research and analysis have helped the world's leading companies navigate challenges and seize opportunities for over 100 years.

    Explore All Research

    Economic Indicators

    • Explore by Center
    • CED
      Committee for Economic Development
    • Economy, Strategy & Finance
    • Governance & Sustainability
    • Human Capital
    • Marketing & Communications
    • Explore by Content Type
    • Reports
    • Upcoming Webcasts
    • On Demand Webcasts
    • Podcasts
    • Charts & Infographics
    • Trending Topics
    • Artificial Intelligence (AI)
    • Navigating Washington
    • Geopolitics
    • US Economic Forecast
    • Sustainability
    • Future of Work
  • Events
    Events

    Our in-person and virtual events offer unmatched opportunities for professional development, featuring top experts and practitioners.

    See Everything Happening This Week

    Sponsor a Program

    • Upcoming Events
    • People First: Opportunity and Access

      June 12 - 13, 2025

      CHRO Summit: Navigating through a Tsunami of Change

      June 24, 2025

      Future: People Asia

      September 04 - 05, 2025

    •  
    • Executive Compensation in a Disruptive World

      September 16 - 17, 2025

      CED Distinguished Leadership Awards Celebration

      October 08, 2025

      The 2025 IBI/Conference Board Health and Productivity Forum

      October 16 - 17, 2025

    • Member-Exclusive Programs
    • Center Briefings
    • Experts Live
    • Roundtables
    • Working Groups
    • Expert Briefings
    • Explore by Type
    • Events
    • Webcasts
    • Podcasts
    • Member-Exclusive Programs
    • Center Briefings
    • Experts Live
    • Roundtables
    • Working Groups
    • Expert Briefings
  • Data
    Corporate Disclosure Data

    TCB Benchmarking

    Real-time data & analytical tools to benchmark your governance, compensation, environmental, human capital management (HCM) and social practices against US public companies.

    Economic Data

    All Data

    See current direction and trends across key indicators

    Consumer Confidence Index

    US consumers' thoughts on the economy, jobs, finances and more

    Data Central

    One-stop, member-exclusive portal for the entire suite of indicators

    Labor Markets

    Covering all aspects of labor markets, from monthly development to long-term trends

    Measure of CEO Confidence

    Examines the health of the US economy from the perspective of CEOs

     

    Recession & Growth Trackers

    See the current and future state of 16 economies.

    Global Economic Outlook

    Track the latest short-, medium-, and long-term growth outlooks for 77 economies

    Leading Economic Indicators

    Track the state of the business cycle for 12 global economies across Asia and Europe

    Help Wanted OnLine

    Track the status of job markets across the US through online job listings

    Other Featured Data

    Human Capital Analytics Tools

    Tools to understand human capital management and corporate performance

    CMO+CCO Meter Dashboard

    Tracks the impact, resources, and satisfaction of CMOs and CCOs

  • Centers
    Centers

    Centers offer access to world-class experts, research, events, and senior executive communities.

    Our Centers
    • Committee for Economic Development
    • Economy, Strategy & Finance
    • Governance & Sustainability
    • Human Capital
    • Marketing & Communications
    Center Membership
    • What Is a Center?
    • Benefits of Center Membership
    • Join a Center
  • Councils
    Councils

    Councils are invitation-only, peer-led communities of senior executives that come together to exchange knowledge, accelerate career development, and advance their function.

    Find a Council
    • Economy, Strategy & Finance
    • Governance & Sustainability
    • Human Capital
    • Marketing & Communications
    Council Membership
    • What Is a Council?
    • Benefits of Council Membership
    • Apply to a Council
  • Membership
    Membership

    Membership in The Conference Board arms your team with an arsenal of knowledge, networks, and expertise that's unmatched in scope and depth.

    • Why Become a Member?
    • Benefits of Membership
    • Check if Your Organization is a Member
    • Speak to a Membership Associate
    • Types of Membership
    • Council
    • Committee for Economic Development
    • Economy, Strategy & Finance
    • Governance & Sustainability
    • Human Capital
    • Marketing & Communications
    • Insights
    • Already a Member?
    • Sign in to myTCB®
    • Executive Communities
    • Member-Exclusive Programs
  • About Us
    About Us

    The Conference Board is the global, nonprofit think tank and business membership organization that delivers Trusted Insights for What's Ahead®. For over 100 years, our cutting-edge research, data, events and executive networks have helped the world's leading companies understand the present and shape the future.

    Learn more about Membership

    • Who We Are
    • About Us
    • In the News
    • Press Releases
    • Our History
    • Support Our Work
    • Locations
    • Contact Us
    • Our Community
    • Our Leadership
    • Our Experts
    • Trustees
    • Voting Members
    • Careers
    • This Week @ TCB
Check if You're a Member
Create Account
Forgot Your Password?

Members of The Conference Board get exclusive access to the full range of products and services that deliver Trusted Insights for What's Ahead ® including webcasts, publications, data and analysis, plus discounts to conferences and events.

Climate Change

  • Email
  • Linkedin
  • Facebook
  • Twitter
  • Copy Link
  • HOME

The Role of Carbon Offsets in the Net-Zero Journey

April 21, 2022 | Report

Copy Link
Share
  • Email
  • Facebook
  • LinkedIn
  • Twitter
  • Copy Link Copy Link

Executive Summary

The Russian invasion of Ukraine is a stark reminder that fossil fuels—a major contributor to climate change—are highly vulnerable to geopolitical risks. While governments and business leaders may turn to a greater share of fossil fuels to supplement their energy needs over the next few years, we expect an accelerated effort to tackle climate change as the crisis eases.1 Reframing commitments to net zero—achieving a balance between emissions produced and emissions taken out of the atmosphere—not only as a climate goal but as a stable and a safer way to achieve energy security and decarbonization could be helpful to reconcile short-term energy needs and long-term climate commitments.

A corporate net-zero commitment seeks to reduce emissions as far as possible as the primary strategy. Offsets are only considered once strategies to avoid, reduce, and substitute have been implemented. 

Climate change has become front and center for many investors, regulators, customers, and employees, and an increasing number of companies are making net-zero commitments. These pledges can play a central role in guiding emission reductions and have grown in popularity in the last few years; over 20 percent of all companies in the Forbes Global 2000 list have a net-zero target in place.2 But this momentum currently has limits: Asia is by far the largest carbon emitter, but committing to net zero is still a nascent practice for Asian companies.3 Carbon offsetting—the principle of paying someone else to reduce the greenhouse gas (GHG) emissions you have generated—has long been a tool to address climate change; however, opinions are divided on whether using it does more harm than good to the environment and climate change efforts. Some critics see offsets as a form of greenwashing, a way for buyers to pay someone else to adopt climate-friendly actions rather than cutting their own emissions. There are also concerns that offsets may not represent valid additional GHG reductions or may cause further harm by not taking into account other important environmental objectives such as water access, waste, and biodiversity management. Nevertheless, given the urgent need to reduce emissions and remove CO2 from the atmosphere, the use of “high-quality” carbon offsets is a necessary part of the long-term journey to net zero.

Insights for What’s Ahead

  • Growing stakeholder engagement on climate will continue to drive net-zero pledges. Achieving net zero will need active participation from all actors including businesses. More than 70 countries, including the biggest polluters—China, the United States, and the European Union—have set a net-zero target, covering about 76 percent of global emissions.4 We may see these jurisdictional pledges translate into increased corporate ambition and action on climate. Companies will be urged to set “science-based targets” (SBTs) as well as encompass targets that include Scope 1 emissions (from direct activities), Scope 2 emissions (indirect, from electricity and heat), and Scope 3 emissions (from the full value chain, often the greatest proportion of total emissions).5
  • Voluntary carbon markets will undergo a rapid transformation that includes adhering to minimum global standards, primarily to enhance carbon credit integrity. As an S&P Global article notes, “Voluntary carbon markets allow carbon emitters to offset their unavoidable emissions by purchasing carbon credits emitted by projects targeted at removing or reducing GHG from the atmosphere.”6 While compliance markets (which form to address regulatory requirements) are currently limited to specific regions, voluntary carbon markets are unregulated and lack global governance. This has resulted in a two-tier market characterized by high-cost/high-quality certified and verified offsets and low-cost/low-quality offsets with questionable integrity. With a view to changing this in the coming years, the Taskforce on Scaling Voluntary Carbon Markets, a private sector initiative under the sponsorship of the Institute of International Finance, is seeking to establish a new umbrella governance body to oversee the voluntary carbon markets. Such a body will also develop minimum standards for carbon credits to ensure integrity and create a connected ecosystem to better enable accurate carbon accounting and avoid double counting or claiming. Formalized carbon markets can play a role in mitigating the worst effects of climate-related risks, but offsetting should not be the primary mechanism through which companies aim to reduce their carbon footprint.
  • Rising demand for and pursuit of high-integrity credits will drive up carbon credit prices. Decarbonization and net-zero commitments will continue to increase carbon offset demands; the voluntary offset market is expected to grow fifteenfold by 2030 compared to 2019.7 The current average voluntary carbon credit price is around US$3-5 per metric tonne of carbon dioxide equivalent (tCO2 e); the push toward high-quality offsets may drive prices up to US$20-50/tCO2 e or more by 2030.8 Offsets should be seen as a long-term strategic investment rather than a tactical purchase. It is essential to have a cross-functional team (e.g., chief financial officer, chief procurement officer, and chief sustainability officer) to oversee and execute the offsetting strategy.
  • Reaching net zero will require complete business transformation. While many companies have set ambitious climate targets, not all have backed those commitments with substance.9 Often, this is because a climate strategy is not integrated within business strategy and capital expenditure plans. Companies will need to forgo stand-alone climate strategies and embed and align net-zero targets into their business strategies. This approach includes oversight and accountability by the board, changes in operating models to support transformation, engagement across the value chain to enable and encourage partners and customers to decarbonize, and sustainable innovation to develop new products and services that deliver on net-zero commitments.
  • Realizing net-zero targets will require companies to use carbon offsets, but offsetting can only be credible as a secondary strategy. Carbon offsets should only be considered as part of the net-zero journey to balance out residual emissions that are unfeasible to eliminate. As companies operationalize their net-zero strategies and go through the carbon mitigation hierarchy—avoid, reduce, and substitute—some 5–10 percent of emissions will remain unavoidable or ineliminable. Companies can choose to use offsetting to become carbon neutral today, provided they do not use it as a proxy for real climate action. A company’s offset strategy should include a timeline of when and where the company would integrate offsets into its net-zero strategy.
  • Companies should prioritize near-term emissions mitigation and reduction and consider offsets in the long term. Offsetting alone will not tackle climate change and can only be credible if it comes after concerted efforts to avoid, reduce, and substitute emissions.
  • Companies that choose to use carbon offsets must ensure their credibility. It is of paramount importance that a company purchase quality offsets that meet specific standards and are recognized by a credible program such as the Verified Carbon Standard. Offsets can undermine the credibility of a company’s climate and sustainability strategy and, over time, be quite an expensive undertaking. Even more importantly, poor-quality offsets may offer no real benefit to the environment and may even potentially turn into a reputational risk for buyers. Companies should proceed with caution and conduct offset quality due diligence. Ideally, companies should commit to purchasing only offsets that are auditable, verifiable, and certified in their environmental integrity. 
Read more

To get complimentary access to this publication click "Read more" to sign in or create an account.

AUTHORS

AnujSaush

Anuj Saush

Head, TCB Advisory International
The Conference Board

IoannisSiskos

Ioannis Siskos

Senior Research Fellow, Governance & Sustainability Center, Europe
The Conference Board

Julia Stanfield

Julia Stanfield

Research Fellow, Governance & Sustainability Center
The Conference Board

  • CREATE AN ACCOUNT SIGN IN
  • DOWNLOAD REPORT
    Complimentary. Sign in or create an account to access.

Copy Link
Share
  • Email
  • Facebook
  • LinkedIn
  • Twitter
  • Copy Link Copy Link

Publications

Biodiversity and Deregulation: Navigating a Fragmented Regulatory Landscape

Biodiversity and Deregulation: Navigating a Fragmented Regulatory Landscape

April 21, 2025 | Report

Endless Power Revisited: Recent Fusion Energy Breakthroughs & Near-Term Outlook

Endless Power Revisited: Recent Fusion Energy Breakthroughs & Near-Term Outlook

April 08, 2025 | Article

Sustainability Without the SDGs: US Policy Shifts and Corporate ESG

Sustainability Without the SDGs: US Policy Shifts and Corporate ESG

March 17, 2025 | Report

Beyond Mitigation: Embracing Regenerative Climate Action

Beyond Mitigation: Embracing Regenerative Climate Action

January 24, 2025 | Article

Sustainable Finance Is Growing Up

Sustainable Finance Is Growing Up

January 23, 2025 | Article

Climate Resilience Gaining Momentum as an Environmental Priority

Climate Resilience Gaining Momentum as an Environmental Priority

January 22, 2025 | Quick Take

View Less View More

On Demand Webcasts, Podcasts and Videos

C-Suite Perspectives

We're Falling Behind on Climate: Can COP29 Undo This Trend?

November 21, 2024

C-Suite Perspectives

Net Zero Isn’t Enough. So What's Plan B?

August 19, 2024

C-Suite Perspectives

Flooding Is Getting Worse. What Should Businesses Do?

August 05, 2024

The Role of Markets in Reaching Net Zero

May 16, 2024 12:00 PM ET (New York)

Let's Talk Sustainable Business

S5E9 - Transforming Harmful Algae Into Everyday Goods

March 07, 2024

C-Suite Perspectives

Climate Change and Business: What Are the Implications?

August 03, 2023

View Less View More

  • Tags
  • Climate Change
EVENT PORTAL

Forgot Password | Resend account confirmation
Conference Board Sample Web Chat
chatbot-Icon TCB Logo
chatbot-Icon
Navigating Washington - Sign up to receive the latest business insights related to executive orders, new laws, and changing regulations.
ABOUT US
  • Who We Are
  • Annual Report
  • Our History
  • Our Experts
  • Our Leadership
  • In the News
  • Press Releases
MEMBERSHIP
  • Become a Member
  • Sign In to myTCB®
  • Access Experts
  • Member-Only Events
  • Data & Benchmarking
  • Manage Account
EXPLORE
  • Centers
  • Councils
  • Latest Research
  • Events
  • Webcasts
  • Podcasts
  • This Week @ TCB
CONTACT US
  • Americas
    +1 212 759 0900
    customer.service@tcb.org
  • Europe/Africa/Middle East
    +32 2 675 5405
    brussels@tcb.org
  • Asia
    Hong Kong | +852 2804 1000
    Singapore | +65 8298 3403
    service.ap@tcb.org
CAREERS
  • See Open Positions
Terms Of Use | Privacy Policy | Event Code of Conduct | Trademarks
© 2025 The Conference Board Inc. All rights reserved. The Conference Board and torch logo are registered trademarks of The Conference Board.
The use of all The Conference Board data and materials is subject to the Terms of Use. Reprint requests are reviewed individually and may be subject to additional fees.The Conference Board reserves the right to deny any request.
Terms of Use | Privacy Policy | Event Code of Conduct | Trademarks
© 2025 The Conference Board Inc. All rights reserved. The Conference Board and torch logo are registered trademarks of The Conference Board.
The use of all data from The Conference Board data and materials is subject to the Terms of Use. Reprint requests are reviewed individually and may be subject to additional fees.The Conference Board reserves the right to deny any request.

Thank you for signing up. You will now receive CEO Insights for What's Ahead every Wednesday morning. You can unsubscribe at any time or manage your preferences to receive more content from The Conference Board.

Announcing The Conference Board AI Virtual Conference Series

Explore the Impact of AI on Your Business

Members receive complimentary registration - Learn more >>