Takeaways

• Large global companies already using voluntary carbon credits plan to keep buying them, with many expecting volumes to rise.
• Firms yet to enter the market remain cautious, citing price uncertainty, regulation, and reputational risk.
• Demand is shifting toward higher-quality credits, but a limited supply could constrain market growth.

Voluntary carbon markets remain small compared with mandatory compliance systems, but corporate participation is becoming more structured and deliberate. A new survey by the Morgan Stanley Institute for Sustainable Investing shows that companies already active in these markets increasingly see carbon credits as a lasting part of their climate strategies, rather than a short-term fix.

The survey covered 225 global companies with annual revenues above $1 billion. It highlights clear differences between firms already purchasing credits, those planning to do so in the future, and those choosing not to participate at all.

Strong Commitment from Existing Buyers

Companies currently buying voluntary carbon credits are mostly large, listed firms with established net-zero targets. More than 90% say they intend to continue purchasing credits, and most expect demand to increase over time.

For these firms, progress in cutting emissions within their own operations and value chains is the biggest driver of future credit demand. Around 32% cited internal decarbonization progress as the main factor influencing volumes, well ahead of price considerations. This suggests carbon credits are being used to complement emissions reductions, not replace them.

On average, current buyers expect about two-thirds of their emissions cuts to come from their own operations or value chains. Another 28% is expected from grid decarbonization and similar measures, leaving just 7% of residual emissions to be addressed through carbon removals.

Read More: From Boom to Caution: Carbon Capture’s Shifting Fortunes

Caution among Future Participants

Companies planning to enter voluntary carbon markets show a more cautious approach. While they expect to reach similar purchase volumes to current buyers by 2030, more than half report low visibility on how many credits they will actually buy.

Pricing is the main concern, especially in North America and the Asia-Pacific. In Europe, the Middle East, and Africa, regulatory clarity is a bigger issue, reflecting stricter oversight and growing scrutiny of environmental claims. This uncertainty highlights the need for clearer rules and stronger market signals if voluntary markets are to scale further.

Why Some Firms Stay Out

Not all companies see a role for voluntary carbon credits. Among non-buyers, 39% believe they can fully decarbonize within their own value chains. However, this group shows weaker overall commitment to net-zero goals.

Only 25% of non-buyers have a net-zero target, compared with 95% of current buyers and 85% of future buyers. Nearly a third say they do not plan to set a net-zero target at all.

Sector mix also plays a role. Non-buyers include more healthcare firms and fewer energy companies, suggesting that lower carbon intensity reduces perceived reliance on voluntary markets.

Scope 3 Pressure and Quality Concerns

Across current and future buyers, more than 85% are pursuing or considering insetting projects, such as supplier efficiency programs and nature restoration, to tackle Scope 3 emissions.

Also Read: Singapore to Offset Emissions with Rwanda Carbon Credits Deal

“As Scope 3 becomes a priority, management teams are seeking strategies that combine emissions reduction with biodiversity and nature stewardship across their value chains,” says Cristina Lacaci of Morgan Stanley.

Demand is increasingly focused on high-integrity credits aligned with the Integrity Council for the Voluntary Carbon Market Core Carbon Principles, but supply remains limited. “We increasingly find that corporates have a clear idea of what instruments they want to buy, and what they are prepared to pay,” says Iain Mackay.

As corporate climate strategies mature, voluntary carbon credits look set to remain a supporting tool, provided supply, standards, and policy can keep pace.

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Source: ESG NEWS