Carbon credits have become essential for companies targeting climate neutrality. The voluntary carbon market reached $2 billion in 2021, quadrupling from its 2020 value (BCG). Yet behind this growth lies a major problem: integrity issues affect buyers just as much as the projects themselves. Purchasing carbon credits isn’t enough, you need to do it right for it to genuinely serve the climate.
We hear a lot about low-quality projects: forests that weren’t really threatened, overstated emission reductions, credits sold multiple times. These problems exist and damage market credibility. But the other half of the problem comes from buying companies.
Some businesses buy credits speculatively, hold them without retiring them, or use them to make misleading climate claims. Others treat offsets as permission to delay real emission reductions, buying cheap credits instead of changing their operations. Some purchase tiny volumes just for marketing while their actual emissions keep rising. These practices defeat the whole purpose: mobilizing private money toward genuine emission reductions that wouldn’t happen otherwise.
At hummingbirds, we develop high-quality carbon projects, but we also screen our buyers carefully. We want our credits to support real climate action, not greenwashing. That’s why understanding what responsible buying looks like matters for both sides of the market.
You can’t offset what you haven’t measured. Companies need to track their greenhouse gas emissions across three categories (called “scopes”). Scope 1 covers direct emissions from things you own: factories, company vehicles, facilities. Scope 2 covers the energy you buy: electricity, heating, cooling. Scope 3 is everything else in your value chain: suppliers, transportation, business travel, even how customers use your products.
Most companies only measure scopes 1 and 2 because they’re easier. But scope 3 often represents 70-90% of total emissions. Without measuring all three, you’re making purchasing decisions based on incomplete information.
Once you know your real footprint, set science-based targets. These goals align with what climate science says we need, like the Paris Agreement’s 1.5°C pathway, not just convenient marketing timelines. The Science Based Targets initiative (SBTi) provides a framework for companies to set credible decarbonization goals validated against climate science. Your targets should cover all three scopes with clear milestones for the next 5, 10, and 15 years.
The climate mitigation hierarchy goes: Avoid > Reduce > Offset. Many companies interpret this as “wait to buy credits until you’ve reduced everything possible”. That’s a mistake. It delays climate action by years.
Better approach: tackle both simultaneously. Aggressively reduce emissions where you can (switching to renewable energy, improving efficiency, changing suppliers) while buying credits for emissions that won’t disappear quickly (aviation, certain industrial processes, agricultural emissions). As your reductions progress, your credit purchases should decrease over time.
Credits serve a specific purpose: compensating hard-to-abate emissions while your reduction work continues. They’re not a substitute for that work: they’re a complement.
What makes a good carbon credit ? Three essential qualities
Words matter. Regulators across Europe and North America are cracking down on vague environmental claims. Here’s what different terms actually mean:
Avoid vague terms like “climate positive,” “carbon negative,” or “eco-friendly” unless you can back them up with transparent methodology and verification. When communicating about credits, disclose the details: quantities purchased, project types, geographic locations, standards used, and retirement dates. Transparency builds credibility that marketing slogans can’t manufacture.
At hummingbirds, we’re selective about who buys our credits. We ask potential buyers about their decarbonization targets, emission accounting practices, and credit retirement timelines.
This works both ways. Buyers benefit from partnering with project developers whose work withstands scrutiny. If you’re buying credits from projects later exposed as low-quality, that becomes your reputational problem too. Third-party certifications like Science Based Targets initiative (SBTi) or Voluntary Carbon Markets Integrity Initiative (VCMI) help demonstrate your commitment to robust climate strategy.
The concept of Beyond Value Chain Mitigation (BVCM) is gaining traction. Instead of claiming offsets, companies invest in emission reductions outside their operational footprint as pure climate contribution. You might fund renewable energy projects, support cookstove distribution, or protect threatened ecosystems, generating climate benefits without the accounting complexities of traditional offsetting. Many companies now pursue both: offsetting residual emissions while funding additional climate projects as contribution.
Carbon markets have grown complex. Understanding project methodologies, verification standards, buffer pools, contract structures, and communication strategies requires specialized knowledge. Most sustainability teams need external expertise to navigate this landscape successfully.
hummingbirds helps companies build defensible carbon credit strategies from both sides of the market. We develop high-integrity projects and help buyers incorporate them responsibly into their climate plans. Our demand integrity approach ensures buyers meet the same standards we apply to project development: complete emissions accounting, science-based targets, prompt retirement, transparent disclosure.
We design portfolios balancing cost constraints against strategic goals, source high-quality credits through direct relationships with verified projects, and help build communication strategies that maintain credibility as regulations evolve. The voluntary carbon market’s future depends on elevating standards for both supply and demand. Companies meeting that challenge can turn carbon credits from reputational risk into strategic advantage.
