More Public Companies Are Using Carbon Offsets to Meet ESG Goals
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More Public Companies Are Using Carbon Offsets to Meet ESG Goals

/ Quick Take

The percentage of Russell 3000 public companies disclosing carbon offset use increased from 10% in 2021 to 26% in 2023. Among S&P 500 companies, nearly 60% reported using offsets in 2023, up from 37% in 2021. Carbon offsets, or carbon credits, are financial instruments that allow companies to balance their emissions by investing in projects, such as renewable energy or forest conservation, that reduce or remove emissions elsewhere.

The percentage of Russell 3000 public companies disclosing carbon offset use increased from 10% in 2021 to 26% in 2023. Among S&P 500 companies, nearly 60% reported using offsets in 2023, up from 37% in 2021. Carbon offsets, or carbon credits, are financial instruments that allow companies to balance their emissions by investing in projects, such as renewable energy or forest conservation, that reduce or remove emissions elsewhere.

Trusted Insights for What’s Ahead™

As companies work toward reducing their emissions and meeting ambitious climate targets, carbon offsets will be vital for many industries. To maximize their impact, companies should:

  • Set clear objectives: Define goals for offset use, such as covering unavoidable emissions or achieving a specific percentage of overall emissions.
  • Ensure additionality: Use offsets that deliver verifiable emissions reductions that would not have occurred without the project, while meeting recognized standards.
  • Conduct rigorous due diligence: Thoroughly vet projects and regularly monitor them, including conducting site visits, to ensure effectiveness. Engage third-party auditors accredited by the chosen certification standard to verify that claimed reductions are real, measurable, and additional.

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Author

Andrew Jones, PhD

Andrew Jones, PhD Andrew Jones, PhD

Senior Researcher, ESG Center
The Conference Board

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