2024 was the warmest year ever measured, and this year is expected to break that record. At the same time, greenhouse gas emissions continue to increase. It is alarming that the issue of commitments to reduce greenhouse gas emissions was not raised at COP29. We have very little time left to avoid driving the planet into a new era of catastrophic weather conditions and irreversible threshold effects.

The business community has two tools at its disposal to take climate responsibility: reducing its own emissions and voluntarily investing in climate projects through the purchase of carbon credits (what was previously called climate compensation). This means that the same amount of greenhouse gases emitted is also removed from the atmosphere.

While the thermometer continues to break records, positions are being put forward, especially by researchers and environmental organizations, that companies should have climate goals that mean zeroing out all their emissions. But this view ignores a fundamental truth: a company cannot reduce all of its greenhouse gas emissions. There will always be emissions that cannot be influenced, and these are emissions from the company's value chain, i.e. the suppliers who have not yet reduced their emissions. Nor is customers' use of a company's products something that the companies themselves can influence. The concept of net zero – not gross zero – has been added based on that insight.

Scolel’te Mexico – Plan Vivo forest

One reason put forward for demanding a total reduction of all emissions is that there is a risk that companies use the purchase of carbon credits as a PR method instead of reducing emissions or covering up that they are not reducing more. The consequence that is then ignored is that voluntary investments outside the own value chain are completely removed.

With the new requirements that the EU, not least, places on companies to report and reduce emissions and also to audit their annual sustainability reports, the risk of greenwashing with the help of carbon credits will more or less cease. And even if there will be exceptions, this cannot be allowed to set the climate agenda, in a time when all tools to manage emissions must be included.

Upper Tana, Kenya – Plan Vivo forest

Another reason put forward is that carbon credits are of substandard quality. But with increased demands on reduction measures, a clean-up of the carbon credit market is taking place at the same time. What remains are so-called high integrity projects. Projects that do not deliver the binding or removal of emissions that has been promised 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 added even without the business community's voluntary financing via carbon credits.

Unfortunately, an unrealistic gross-zero approach has created doubt within the business community as to whether investments in carbon credits should be used – or even allowed. At the same time, one wonders if all emissions can be removed. No wonder, because 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. Then the system with carbon credits should also be a powerful element.