Corporate Emission Performance and the Use of Carbon Credits

This report was originally published on trove-research.com. MSCI acquired Trove Research — now known as MSCI Carbon Markets — in November 2023.

We analyzed the emissions performance of over 4,000 global companies and the link with the use of carbon credits. Based on Trove Research’s extensive corporate emissions data and carbon credit use, companies that use material quantities of carbon credits are, on average, decarbonizing at twice the rate of companies that do not use carbon credits.

The results are statistically significant at the global level and at some national and sectoral levels. Companies that use higher quality and more expensive credits have better emissions performance.

These findings refute the assertion that companies voluntarily buying carbon credits are creating a ‘license to pollute,’ In fact, the evidence of the last five years suggests that the voluntary purchase of carbon credits provides companies an incentive to accelerate their emission reductions.