In recent years, as global awareness of climate change has surged, corporations have increasingly sought to align their business models with sustainability goals. Among the strategies promoted, carbon offsetting has emerged as a popular tool, often heralded as a straightforward way for companies to neutralize their greenhouse gas emissions. By investing in environmental projects such as reforestation, renewable energy, or methane capture, firms claim to compensate for the emissions they produce, thus presenting an image of responsibility and progressiveness in climate action. However, as a landmark study published in Nature Communications by Stolz and Probst reveals, the effectiveness and real impact of carbon offsetting within corporate climate strategies may be far more limited—and even negligible—than commonly believed.
The phenomenon of carbon offsetting gained momentum in the early 2000s with the proliferation of voluntary carbon markets. These markets allow businesses to purchase carbon credits calculated to correspond to specific amounts of reduced or sequestered carbon dioxide elsewhere. At face value, this mechanism seemed to offer an elegant solution to complex emission challenges, enabling companies to buy their way to net-zero targets while continuing business operations as usual. Yet Stolz and Probst’s meticulous analysis suggests that this mechanism is riddled with conceptual flaws and practical shortcomings that undermine its purported environmental benefits.
At the heart of the study lies a critical examination of offset quality, additionality, and permanence. Additionality refers to whether the offset projects truly cause emission reductions that would not have occurred otherwise—without the purchase of carbon credits. The authors demonstrate that many projects lack adequate monitoring and verification frameworks, leading to inflated claims of impact. For instance, reforestation projects often count carbon sequestered by trees that would have grown regardless of offset investments, while renewable energy projects sometimes receive credit for displacing emissions that were already decreasing due to other regulatory or market forces. Thus, the supposed environmental gains are frequently illusory or overstated.
Permanence, or the durability of offset benefits over time, also emerges as a deep vulnerability. Carbon stored in biological sinks such as forests or soils is inherently subject to reversal through fires, pests, or land-use changes. Stolz and Probst highlight how significant portions of purported offset carbon can be released back into the atmosphere within decades, raising questions about whether these offsets counterbalance emissions genuinely or merely delay their climatic impact. This temporal mismatch challenges the foundational logic of equal exchange between carbon emitted today and carbon sequestered elsewhere under fallible conditions.
The study further scrutinizes the scale and scope of corporate reliance on offsetting within broader climate strategies. According to Stolz and Probst, many firms prominently publicize offset purchases as a flagship climate initiative, sometimes dedicating limited resources to actual emission reductions. This trend risks perpetuating a “license to pollute” culture, wherein offsetting serves primarily as a reputational shield rather than a driver of transformative change. The study’s data compile evidence that offsets often represent only a fraction of total corporate emissions and are frequently combined with insufficient internal reduction targets, thereby perpetuating a gap between stated neutrality goals and actual environmental impact.
Beyond the quantitative analysis, the authors shed light on governance and transparency concerns surrounding carbon offset markets. With a fragmented regulatory environment and varying standards across regions, stakeholders often struggle to verify the legitimacy and outcome of offset projects. Weak reporting requirements mean that offset developers and corporate buyers alike can engage in “greenwashing” practices, misleading investors, consumers, and policymakers by presenting inflated progress narratives unsupported by robust evidence. Stolz and Probst argue that this opacity undermines trust and hampers the development of effective climate policy frameworks.
Importantly, the study does not advocate the outright abandonment of carbon offsetting but rather calls for a recalibration of expectations and practices. The authors emphasize that offsetting must be nested within comprehensive mitigation portfolios prioritizing direct decarbonization across scopes 1 and 2 emissions—those produced directly by corporate operations and energy consumption. Offsets, in their view, should function as a last-resort measure to address residual emissions that are technically difficult to eliminate, rather than as a foundational pillar of climate strategy. This reorientation requires stricter standards, enhanced monitoring, and transparent disclosure mechanisms to ensure offsets contribute real and verifiable climate benefits.
The researchers also discuss emerging technological innovations that could complement or eventually surpass traditional offsetting methods. For example, carbon capture and storage (CCS) and direct air capture (DAC) hold promise for achieving more reliable and permanent sequestration of CO2. However, these technologies remain nascent, expensive, and energy-intensive, posing deployment challenges at meaningful scales. The study urges policymakers to incentivize rapid advancement in these domains while maintaining skepticism toward conventional offset approaches as sole or alternative solutions.
Intriguingly, Stolz and Probst’s work highlights the potential for offsetting to distract from more systemic shifts necessary for sustainable business transformation. They argue that an overreliance on offset credits may decrease urgency for redesigning supply chains, optimizing energy efficiency, and investing in green innovations. The paper frames this dynamic within the broader context of corporate social responsibility and environmental justice, noting that offset projects located primarily in low-income regions run the risk of perpetuating inequities by shifting environmental burdens abroad rather than addressing root causes of emissions domestically.
The findings resonate strongly in the current policy landscape marked by ambitious net-zero pledges and mounting scrutiny of corporate climate commitments. As governments and investors increasingly demand accountability, the study’s critique of offsetting underscores the need for more rigorous climate governance frameworks. These frameworks must integrate granular emissions accounting, third-party audits, and enforceable standards that prevent double counting and ensure additionality and permanence. Stolz and Probst encourage multi-stakeholder collaboration to develop internationally harmonized protocols that enhance market integrity and social co-benefits.
From a scientific standpoint, this study enriches the discourse on climate mitigation by integrating atmospheric science, economics, and corporate governance perspectives. By meticulously unpacking the limitations of carbon offset markets, Stolz and Probst contribute new empirical evidence that challenges popular narratives and calls for empirical rigor. Their approach bridges academic inquiry with policy relevance, offering actionable insights for regulators, sustainability professionals, and civil society advocates committed to meaningful climate action.
The implications of this study extend beyond corporate boardrooms and policy offices, touching the heart of global climate responsibility. The authors urge a shift away from simplistic and transactional notions of emissions neutrality toward embracing transformative strategies that decouple economic growth from environmental degradation. Such strategies demand sustained investments in clean energy infrastructure, circular economy models, and behavior change initiatives, supported by transparent communication and stakeholder engagement. The study’s cautionary message serves as a wake-up call to ensure that well-intentioned climate initiatives do not fall victim to complacency or misdirection.
As the climate crisis accelerates, the dissection of carbon offsetting’s real-world impact provided by Stolz and Probst offers a vital compass for navigating corporate climate action. Their work reaffirms the importance of confronting the carbon challenge with honesty, scientific precision, and ethical commitment. It also highlights the formidable complexity involved in translating lofty sustainability goals into tangible environmental outcomes—a complexity that demands diligence, innovation, and courage from all sectors of society.
In sum, this study represents a pivotal contribution to understanding how corporations engage with climate mitigation tools and where current practices fall short. By peeling back the layers of offsetting myths, Stolz and Probst open avenues for more robust and credible climate strategies that prioritize actual emission reductions and systemic transformation over cosmetic fixes. Their findings compel a reexamination of corporate climate narratives and provide a foundational resource for enhancing the efficacy and integrity of global climate governance in this critical decade.
Subject of Research: Carbon offsetting and corporate climate strategies, focusing on the effectiveness, limitations, and role of offsets in achieving corporate greenhouse gas emission reduction goals.
Article Title: The negligible role of carbon offsetting in corporate climate strategies
Article References:
Stolz, N., Probst, B.S. The negligible role of carbon offsetting in corporate climate strategies. Nat Commun 16, 7963 (2025). https://doi.org/10.1038/s41467-025-025-62970-w
Image Credits: AI Generated
