Although carbon credits are valuable tools, a poorly planned portfolio can generate significant risks and challenges. Below are some of the main risks that must be carefully managed within the carbon market:
Low-integrity credits:
The most serious risk is acquiring credits that do not represent real emission reductions. Non-additional projects—those that would have occurred anyway—or poorly verified initiatives can create a false perception of neutrality. To avoid this, companies should require credits issued by independent certification bodies and registered in reliable registries, ensuring that each compensated ton is unique and not counted by more than one entity. Inadequate registration may lead to double counting, undermining the credibility of the compensation strategy.
Non-permanence of reductions:
As mentioned earlier, projects based on natural carbon stocks (such as forests and soils) carry the risk of reversal due to fires, deforestation, degradation, or policy changes. If sequestered carbon is released back into the atmosphere, the environmental validity of the credit is lost. This risk can be mitigated by selecting projects with long-term management plans and buffer mechanisms to address adverse events, or by diversifying the portfolio with more permanent removal credits (e.g., geological CO₂ capture). A well-known example is forest credits lost due to wildfires, where permanence is not achieved and stored carbon is re-emitted.
Regulatory and market changes:
The carbon market—particularly the voluntary segment—is still evolving. New regulations may emerge defining which credit types are acceptable for specific environmental claims. International discussions under Article 6 of the Paris Agreement, for instance, may affect the eligibility of voluntary credits in corporate inventories to prevent double counting between countries. At the national level, regulations may introduce stricter criteria or limits on offset use. In addition, supply and demand fluctuations can impact credit prices. Companies must monitor these trends closely, ensuring that their portfolio remains adaptive to regulatory and market evolution while avoiding over-reliance on a single credit type or exposure to assets that may lose value or acceptance.
Reputational risk (greenwashing):
If a company opts for low-cost, low-quality credits merely to “check the box” on emissions, it may face accusations of greenwashing. Stakeholders increasingly scrutinize the integrity of carbon-neutral commitments, expecting internal emission reductions combined with high-quality, transparent compensation. Clear communication of the strategy—why specific credits were chosen, which standards ensure their validity, and what additional benefits they generate—is essential to achieving positive reputational outcomes. Otherwise, offsetting initiatives may lead to skepticism or brand damage. In short, not all carbon credits are equal, and an ideal portfolio must avoid questionable sources to protect corporate climate credibility. (Tip: use integrity frameworks such as IC-VCM guidance or independent credit rating systems to screen reliable projects.)
Opportunities and Benefits of a Well-Planned Portfolio
When properly structured, a carbon credit portfolio delivers multiple benefits beyond simple emission neutrality:
Contribution to global climate goals:
Each carbon credit finances projects that reduce or avoid emissions, directly contributing to climate-change mitigation. By purchasing credits, companies enable initiatives that might not otherwise occur—such as reforestation, solar energy deployment in rural communities, or conservation of threatened ecosystems. This mechanism supports immediate climate action and is recognized as part of the solution under the Paris Agreement.
Social and environmental co-benefits:
Many carbon projects deliver additional positive impacts. A carefully selected portfolio can improve local air quality, create jobs and income in vulnerable communities, protect biodiversity, strengthen traditional communities, and accelerate the adoption of clean technologies. Renewable energy projects, for example, reduce air pollution and expand access to electricity, while forest projects can support Indigenous communities and protect water sources. These co-benefits strengthen the investment rationale beyond CO₂ compensation.
Corporate image and stakeholder value:
Companies that invest seriously in climate compensation enhance their reputation and increase attractiveness to consumers and investors who prioritize responsible environmental practices. Carbon-neutral brands are increasingly preferred, and financial institutions are directing capital toward ESG-aligned businesses. Demonstrating a robust, transparently managed carbon credit portfolio signals genuine commitment to sustainability, differentiating the company from competitors. Over time, this can translate into commercial advantages, access to low-carbon markets, and stronger relationships with governments and civil society.
Preparation for future regulation:
By acting voluntarily today, companies gain experience in emission management and internal carbon pricing—capabilities that become highly valuable if stricter carbon policies are introduced. Early adopters of carbon credits develop expertise that eases adaptation to mandatory schemes. If future interoperability between voluntary and regulated markets emerges, organizations with high-quality portfolios may be able to use credits for compliance or trade surplus credits, turning emissions liabilities into financial assets. In this sense, investing in credits today also serves as a hedge against a more carbon-constrained economy.
Turning Risk into Strategic Advantage
Choosing the ideal carbon credit portfolio is a strategic exercise that requires reliable information, due diligence, and alignment with business objectives. Given the complexity of the credit carbon ecosystem, working with specialized partners can make a decisive difference.
GETS Carbon—an extension of Brazil-based GETS Ambiental—acts as a bridge between forward-thinking companies and certified environmental projects worldwide. With a global presence, GETS Carbon operates across both voluntary and regulated markets, offering end-to-end support for organizations seeking to align economic growth with sustainability and progress toward being carbon neutral in business.
Contact GETS Carbon today to discover how a high-integrity carbon credit portfolio can reduce risk, enhance credibility, and unlock long-term value for your business in the low-carbon economy.
