Carbon Offsets - Thematic Intelligence

More than half of the world’s largest listed companies use carbon offsets to offset some or all of their GHG emissions. Carbon offsets are typically used to claim a company or product is carbon neutral or as part of a longer-term pathway to net zero. Critics say most offsets are low-quality and criticize firms for using them as a “license to pollute.”

Key Highlights

Regulators and standard-setters have become more skeptical of nature-based offsets, especially those that avoid emissions rather than remove existing emissions. While such offsets are cheap to buy (as low as $1 per ton of CO2), many offsets are unlikely to comply with emissions trading systems and cannot be used to meet emissions targets verified by the Science-Based Targets Initiative (SBTi).

A small and growing number of companies are investing in technology-based carbon dioxide removal (CDR) projects such as biochar and direct air capture. These are more reliable when measuring the amount of carbon removed and have long-term storage capabilities. However, they are much more expensive (over $200 per ton of CO2) and have yet to scale, accounting for an estimated 3% to 5% of the offset market today with years-long wait times for delivery.

Scope

• This report provides an overview of carbon offsets, a major topic within the ESG theme.
• It includes a comprehensive introduction to carbon offsets and how they are used to offset greenhouse gas emissions.
• It includes a guide to corporate offset strategies and advice on how companies should approach carbon offsets.
• An appendix provides an overview of the carbon offsetting strategies of the largest 100 companies by market capitalization.

Reasons to Buy

• The number of carbon offsets issued climbed 359% to 291 million between 2015 and 2022.
• Demand for carbon offsets has been driven by some of the world’s largest companies incorporating them into their net-zero strategies.
• This report will help you understand more about carbon offsets and provide guidance on how to incorporate them into your net-zero strategy.