2024 was the warmest year ever recorded and this year is expected to beat it. Meanwhile, greenhouse gas emissions continue to rise. It is alarming that the issue of commitments to reduce greenhouse gas emissions was not addressed at COP29. We have very little time left to avoid pushing the planet into a new era of catastrophic weather events and irreversible threshold effects.

Businesses have two tools at their disposal to take climate responsibility: reducing their own emissions and voluntarily investing in climate projects through the purchase of carbon credits (previously known as carbon offsets). This means that the same amount of greenhouse gases that are emitted are also removed from the atmosphere.

As the thermometer continues to break records, there are calls, especially from scientists and environmental organizations, for companies to have climate targets that mean zeroing out all their emissions. But this view ignores a fundamental truth: a company cannot reduce all its greenhouse gas emissions. There will always be emissions that cannot be influenced, and these are the emissions from the company's value chain, i.e. the suppliers that have not yet reduced their emissions. Nor is the use of a company's products by its customers something that companies can influence themselves. The concept of net zero - not gross zero - has emerged from this realization.

Scolel'te Mexico - Plan Vivo forest

One reason given for requiring total reduction of all emissions is that there is a risk that companies will use the purchase of carbon credits as a PR method instead of reducing emissions or covering up the fact that they are not reducing more. The consequence of this is that voluntary investments outside the value chain are completely removed.

With the new requirements imposed by the EU in particular on companies to report and reduce emissions and also to audit their annual sustainability reports, the risk of greenwashing using carbon credits will more or less end. And while there will be exceptions, this cannot be allowed to set the climate agenda, at a time when all the tools to tackle emissions must be in place.

Upper Tana, Kenya - Plan Vivo forest

Another reason put forward is that carbon credits are of substandard quality. But with increased demands for reduction measures, the carbon credit market is being cleaned up. What remains are so-called 'high integrity projects'. Projects that do not deliver the promised sequestration or removal of emissions will not be certified. This means that, for example, a large number of wind and solar projects cannot be certified, as they would have been built even without the industry's voluntary financing through carbon credits.

Unfortunately, a grossly unrealistic approach has created doubts in the business community about whether investments in carbon credits should be used - or even allowed. At the same time, they wonder whether all emissions can be removed. This is not surprising, as it is based on a myth and a pious hope and not on the reality in which companies operate. All available means must be used to reduce emissions. The carbon credit system must also be a powerful tool in this regard.