Read more in the November 14 edition of Invert Insights.
The Carbon Credit Outlook 2025 by SE Advisory Services, Schneider Electric’s newly launched advisory division, analyzes the evolving voluntary carbon market as it transitions from uncertainty to strategic growth. The report combines survey data from global sustainability leaders with market analysis to uncover trends, challenges, and opportunities shaping corporate carbon strategies to help organizations understand how to integrate high-quality carbon credits into credible net-zero pathways while aligning with emerging global standards and policies.
Here are a few key findings from the report:
The carbon credit market is maturing rapidly. Only 12% of responding companies have no carbon credit strategy. Conversely, 40% of companies are already active in carbon markets, either purchasing (22%) or developing their own projects (18%). When looking at the use of credits by 2030, that number rises to 55%. This shows broad corporate engagement and that carbon credits are beginning to evolve from a voluntary, transactional tool into a strategic climate and business instrument that supports risk management, supply chain resilience, and reputation.
Credit quality and integrity are crucial. The confidence in quality standards has strengthened, and companies are no longer waiting for a perfect market to act; they’re using the frameworks that exist today to build credible, high-integrity portfolios. Two-thirds (66%) of surveyed companies rely on ICROA-endorsed standards (including Gold Standard, Verra’s Verified Carbon Standard, and CAR) and over half (55%) use the Integrity Council for the Voluntary Carbon Market’s (ICVCM) Core Carbon Principles (CCPs) as their primary or secondary measure of quality. Further, 15% have already applied the CCP label as their primary quality indicator, with another 40% listing it as secondary, signalling broad trust in the ICVCM framework even though it’s still relatively new.
Hesitation comes from a lack of clarity and policy gaps. While standards are improving, many organizations still hesitate because the landscape feels fragmented. 46% of respondents cite a lack of clear guidance on how carbon credits fit into net-zero targets as one of their top barriers for voluntary carbon market (VCM) participation, and uncertainty about how voluntary credits interact with frameworks like the Science Based Targets initiative (SBTi), ISO’s Net-Zero Standard, and Article 6 mechanisms leads to cautious engagement. Yet, those who do engage find that established standards already provide sufficient assurance when paired with their own due diligence and third-party verification, including site visits and baseline reviews.
Carbon credit portfolio preferences reflect two goals. Corporate portfolios are evolving beyond simple offsetting to balance immediate climate impact with long-term innovation and transformation. Nature-based removals (reforestation, restoration) are the top priority for 50% of respondents and avoidance/reduction projects (like renewables and forest protection) rank second at 34%, providing immediate and cost-effective impact. Technology-based removals (like DAC, BECCS, ERW) are gaining traction (16%), showing growing interest in long-term innovation despite high costs.
The business case extends beyond carbon reduction and mitigation. Companies increasingly value co-benefits like biodiversity, ecosystem protection, and community development, and they are increasingly recognized as core to corporate sustainability strategies rather than secondary outcomes. For many organizations, investing in ecosystem protection aligns with their operational dependencies (like agricultural supply chains, water security, or natural resource resilience). The report notes that nature-based credits are no longer seen as offsets; rather, they are strategic investments in natural capital and a means of aligning business value with planetary health.
The path forward shows an evolution from voluntary to vital. Carbon markets are entering a defining transition period, moving from a fragmented, voluntary system into a core component of global climate policy and finance. Historically, the VCM was driven by corporate climate leadership and companies using credits to go beyond their operational boundaries. Now, that leadership is being validated and reinforced by governments, which increasingly see carbon markets as a necessary complement to public decarbonization finance. The report emphasizes that this evolution does not mean credits replace direct emissions reductions. Instead, they play a complementary role in addressing residual emissions that remain even after decarbonization efforts. After years of scrutiny and reform, the VCM is converging with compliance systems as governments and multilateral initiatives begin to institutionalize carbon credits within national and international frameworks. 37 jurisdictions have already implemented direct carbon pricing mechanisms, including emissions trading systems (ETS) and domestic crediting programs, and several now allow partial use of carbon credits for compliance, bridging the voluntary and regulated markets. The creation of the Coalition to Grow Carbon Markets in 2025 marks a major step toward global alignment of standards, verification, and cross-border trading systems.
Ultimately, the report findings position carbon credits not as optional offsets, but as essential tools for financing climate action, protecting nature, and driving long-term business resilience. The report concludes with a 5-part call to action to stakeholders, essentially providing a blueprint for how the VCM can evolve from fragmented progress to coordinated global impact:
To corporations: Lead with strategy and long-term commitment. Companies should view carbon credits as bridges, not endpoints or tools that fund real climate action today while deeper decarbonization technologies and policies scale.
To governments: Turn recognition into policy and incentives. Governments must move beyond rhetoric and provide the policy backbone and financial incentives needed to scale private-sector engagement confidently. Policymakers should officially recognize high-integrity credits within national climate plans, emissions trading systems, and tax frameworks.
To standard-setters & civil society: Align integrity with action. The credibility of carbon markets depends on alignment between global standard-setters and integrity initiatives, yet companies today face a maze of overlapping or inconsistent guidance. Standards must emphasize both environmental integrity and practical usability, ensuring that ambitious companies can act without fear of greenwashing accusations. Civil society organizations play a vital role in building public trust and ensuring that human rights, transparency, and equitable benefit-sharing remain central to the system.
To Investors: Deploy capital at scale. Institutional investors and financial institutions have the capital needed to bridge the funding gap between climate ambition and implementation. The report envisions a near future where carbon is a defined financial asset class, enabling institutional-scale investment into verified nature-based and technology-based projects worldwide.
To project developers & local communities: Build genuine partnerships. At the heart of every credible carbon project are the people and ecosystems that make it possible. The report emphasizes that carbon projects must be development interventions with climate benefits, not carbon factories. Developers must design projects that create real, lasting benefits for local people, from employment and income to education, energy access, and gender equality. As SE Advisory notes, the most successful carbon projects are collaborative ecosystems combining scientific rigor, local ownership, and measurable community value.
Invert Insights.
💡 Harmonization of international frameworks is critical as inconsistent national approaches create friction and uncertainty for multinational companies. Establishing and maintaining trust with investors is crucial for the future success of the VCM. De-risking mechanisms, like insurance, long-term purchase contracts, or price floors, would help attract mainstream investors. Investors must also prioritize impact verification and transparency to maintain trust.
💡The Coalition to Grow Carbon Markets has recently released its Shared Principles and Plan of Action. Together, these initiatives can unlock ambitious international climate action. By providing consistency across countries to boost corporate demand for high-integrity credits through the Shared Principles, and by enabling supportive policies and incentives in line with the Plan of Action, the Coalition is helping unlock the powerful role of carbon markets.
💡 The most effective and efficient way forward is to prioritize tangible, near-term benefits across climate, biodiversity, and communities while investing in research and innovation into tech-based solutions as the next frontier, which offer durability and scalability for deep decarbonization in the coming decades. This dual focus of acting now and investing in tomorrow’s solutions marks a clear sign of market maturity. As Matthew Borden, Principal Manager, Portfolio & Partnerships, North America Nature & Technology-Based Solutions, SE Advisory Services, said, “Nature-based carbon projects drive climate action now—restoring ecosystems, supporting communities, and delivering immediate climate impact. As tech-based removals scale to meet long-term net-zero goals, the Oxford Offsetting Principles remind us: prioritize high-integrity, near-term solutions, such as nature, which is available at scale today.”
