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As global efforts to mitigate climate change intensify, carbon credits have become a critical tool for organizations to meet their sustainability goals. This guide, based on insights from our October 2024 webinar, offers valuable information to help you navigate the evolving Voluntary Carbon Market (VCM) and make informed decisions about your carbon credit investments.
We had the privilege of hosting our webinar with leading experts in the carbon market and climate space. Jodi Manning, CEO of Cool Effect, discussed how her nonprofit drives meaningful climate action through high-quality carbon projects. Anna Lerner Nesbitt, CEO of Climate Collective, brought perspectives from her global work at the intersection of climate finance and technology. Uti Agarwal from BP shared insights from his decade-long experience in compliance and voluntary carbon markets. The conversation was skillfully moderated by Bella Corpora, Director at Carbon Business Council, who guided the discussion on innovative climate solutions.
Missed the webinar? Watch the full recording.
IPCC research confirms that all pathways to limit global warming to 1.5°C depend on removing carbon from the atmosphere. Despite growing investment in high-quality carbon credits, we remain off track. There is a 22 gigatonne emissions gap between current emission projections and what’s needed to avoid catastrophic climate impacts. Alongside rapid decarbonization, carbon credits are essential for closing this gap and driving meaningful climate action.
Carbon credits, especially high-quality ones, enable businesses to compensate for unavoidable emissions while directly funding projects that have an immediate impact. They’re an essential part of any climate strategy, especially for those working toward net-zero goals.
The world of carbon credits can seem overwhelming, but starting with manageable, measurable actions is the key. For many companies, a simple and effective entry point is to measure and offset corporate travel emissions. Travel-related emissions are easily quantifiable and widely understood across organizations, making them a great place to begin.
“We have a number of corporate buyers who, five, six, seven years ago, started simply by just accounting for their corporate-mandated travel. And then every year they add something onto it… But again, it’s an iterative process. And the most important point is to just get started.” – Jodi Manning, CEO, Cool Effect
Starting small and gradually expanding your portfolio allows you to build a comprehensive strategy aligned with your business goals and sustainability targets.
Different types of carbon credit projects play distinct roles in addressing climate change. Nature-based solutions (NBS), like mangrove restoration and soil carbon sequestration, offer co-benefits such as biodiversity conservation, water quality improvement, and community resilience. In contrast, engineered solutions, like methane capture or ozone-depleting substance destruction, address emissions from industrial sources directly. Some credits focus on avoidance (preventing emissions), while others target removals (actively drawing carbon from the atmosphere). Corporate buyers should allocate investments based on priorities such as co-benefits, price efficiency, or alignment with their value chains. The optimal strategy depends on each company’s goals, budget, and sustainability approach.
“We need all of the above for a fighting chance to keep temperature rise below 1.5 or 2 degrees. We need to incentivize the protection of tropical forests in Brazil and subsidize the distribution of cookstoves and water filters in Guatemala and Vietnam. We need to capture methane from landfills and industrial facilities. We need to destroy ozone depleting substances that disproportionately have a higher greenhouse gas warming potential and therefore contribute to the greenhouse gas effect. We also need to invest in reforestation of degraded lands and implanting of mangroves and we need to incentivize farmers and ranchers to sequester more carbon in the soil. And equally, we need to scale engineered technologies that work… Every ton of carbon removed or reduced makes a difference.” – Uti Agarwal, Americas Carbon Originator, BP
Not all carbon credits deliver high-quality results. To make an impactful contribution, invest in third-party certified credits with transparent reporting, and data integrity, along with robust climate, community, and biodiversity co-benefits. These projects ensure your money supports real, measurable climate action.
“There’s higher demand for high-quality credits. Buyers are a lot more picky about what they want, and I think that’s fantastic because that means that we’re putting money where we want money to go. So, we’re seeing people allocating funding and investment to project developers that are really transparent, are doing a really good job involving communities or indigenous people, having strong co-benefits, et cetera.” – Anna Lerner Nesbitt, CEO, Climate Collective
With the rise of technologies like AI, geospatial tools, and blockchain, the market now offers better data integrity, making it easier to verify outcomes and increase confidence in the credits you purchase.
Pick a portfolio of carbon credits that resonates with your company’s values and engages your employees. Whether it’s supporting renewable energy or reforestation, you can tailor your investments to reflect your corporate identity.
“Pick and mix something that is inspiring and feels aligned with your corporate priorities.” – Anna Lerner Nesbitt, CEO, Climate Collective
Choosing projects that resonate with your mission makes your sustainability efforts more meaningful and engaging. For example, a company committed to social impact might focus on credits that support community co-benefits, like improving local livelihoods. By aligning your carbon credit investments with your values, you not only enhance employee engagement but also strengthen brand authenticity, making it easier to communicate your climate efforts internally and externally.
“Is your business focused in one area of the world? That can really help you. Is there a mission that is really important to your business, such as benefits to health or women and children?… Let’s start with what’s right for your business.” – Jodi Manning, CEO, Cool Effect
For those looking for cost-effective nature-based solutions, soil organic carbon projects are an excellent option. They offer immediate, scalable, and affordable carbon removal while delivering co-benefits like enhanced biodiversity and food system resilience.
“Soil organic carbon projects are an excellent way and an available way today to introduce nature-based removals into corporate portfolios. From a cost perspective, they can help balance the higher costs of afforestation or reforestation.” – Uti Agarwal, Americas Carbon Originator, BP
As the carbon credit market continues to evolve, buyers are increasingly exploring long-term agreements with project developers. These multi-year commitments help stabilize prices, provide greater predictability, and secure a steady stream of high-quality credits.
An example of this is the Symbiosis Coalition, a recent initiative where a group of leading technology companies committed to purchasing high-quality, nature-based carbon credits through advance market commitments. This coalition demonstrates a growing trend in which companies are pooling resources to secure credits for future use, ensuring long-term access to high-quality projects while driving investment into essential carbon removal initiatives.
“We’re seeing a lot of buyers move from spot buys to multi-year buys. This can certainly help stabilize pricing.” – Jodi Manning, CEO, Cool Effect
Begin with what you can manage and expand your efforts as you gain experience and confidence in the market. Following the leaders in this space can also be beneficial—larger organizations with established teams are conducting research and due diligence, providing smaller or newer organizations with valuable insights to guide their own carbon credit purchases.
Every action counts toward creating a more sustainable future. You’ll be in good company.
“Even if you have just started counting your emissions and you feel overwhelmed by it, I guarantee if you start this year, it’ll get better next year and it’ll get more accurate every year you do it… It’s really important to drink from the cup and not the fire hose and really just start somewhere.” – Jodi Manning, CEO, Cool Effect
“Look towards climate leaders like Amazon and Microsoft that have been very clear about their sustainability plans and the role carbon credits will play in neutralizing emissions and removing historical emissions.” – Uti Agarwal, Americas Carbon Originator, BP
If you’re new to the market, there are plenty of resources and experts available to help you navigate the complexities of selecting the right carbon projects. Many organizations also offer tools to help you track and report your emissions and carbon credit purchases. Ultimately, we all share the same goal: to mitigate climate change and create a more sustainable, equitable future.
“This is the place to be. This is what we should do. This is the right thing. And I, for one, am so happy and honored to be part of this community and help it grow and change. And if you want to join in too, there are so many people you can reach out to rely on. I mean, all of us on the webinar and a whole army of other great people. So don’t hesitate to reach out and connect if you’re interested in doing more on the voluntary carbon market. There are lots of great resources out there.” – Anna Lerner Nesbitt, CEO, Climate Collective
Here are some valuable resources recommended by our panelists to help you better understand and navigate the voluntary carbon market. To dive into deeper insights, watch the full 1-hour webinar. Any questions, contact our sales team.
Cool Effect’s Carbon 101: A comprehensive introduction to carbon credits and how they work.
VCM Landscape Guide: An in-depth overview of the voluntary carbon market, produced by Climate Collective & Rocky Mountain Institute.
Microsoft Criteria for High-Quality Carbon Dioxide Removals: This report offers shared principles to help carbon credit buyers characterize high-quality CDR projects.
Senken Academy Guide on Carbon Credit Quality: A breakdown of carbon credit quality, useful for new buyers.
ICVCM’s Core Carbon Principles: Ten fundamental, science-based principles for identifying high-quality carbon credits that create real, verifiable climate impact.
Indigenous Shareholdership in Environmental Markets: Practical steps to ensure Indigenous Peoples have greater ownership across environmental markets created by Climate Collective.
CDR Responsible Deployment Trainings: Resources created by Carbon Business Council for responsible deployment of carbon credits and engaging with local communities.
Buyers Guide to Carbon Credit Data Quality: This guide produced by Climate Collective & Rocky Mountain Institute provides a data-driven, analytical, and actionable framework to help buyers find, compile, analyze, and test the data behind each carbon credit.
Brown University Article on Carbon Offsets: Thoughtful commentary on the role of carbon offsets in sustainability.
Amazon Carbon Neutralization Report: Discover how Amazon is using carbon credits to neutralize emissions.
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