The Role of carbon credit in ESG

May 16, 2025

Carbon credits play a crucial role in advancing Environmental, Social, and Governance (ESG) goals by enabling companies to offset greenhouse gas emissions and reduce their environmental impact. Each carbon credit represents the reduction or removal of one ton of carbon dioxide (CO₂) or its equivalent from the atmosphere. By investing in carbon credits, organizations can compensate for emissions that are difficult to eliminate through direct operational changes, aligning with sustainability and environmental objectives.

Integrating carbon credits into a company’s ESG strategy not only supports achieving Net Zero emissions but also demonstrates a strong commitment to environmental responsibility. This approach can enhance a company’s reputation among key stakeholders, including investors, customers, and regulators, who are increasingly prioritizing sustainability. Additionally, supporting carbon credit projects often contributes to biodiversity conservation and community development, aligning with the social aspects of ESG.

Examples of Carbon Credit Initiatives in Asia

Singapore’s Climate Impact X (CIX): Singapore has developed Climate Impact X (CIX), a global marketplace for carbon credit trading. This platform allows businesses to purchase verified carbon credits from forestry conservation and renewable energy projects worldwide.

Thailand’s ReAcc (Renewable Energy Accreditation Platform): Thailand has been actively promoting carbon credits and renewable energy. One of the key initiatives supporting this movement is ReAcc, developed by PTT Group. This platform leverages blockchain technology to facilitate the trading of Renewable Energy Certificates (RECs). It allows companies to buy and sell credits from verified renewable energy sources, ensuring transparency in carbon emissions reduction. ReAcc provides businesses with access to clean energy projects, helping them transition to a low-carbon economy in a structured and verifiable way.

However, it is crucial for companies to ensure that the carbon credits they purchase are credible and effective. Engaging with recognized carbon credit programs and adhering to strict standards is essential to avoid potential pitfalls such as greenwashing—where companies claim to be environmentally responsible without making a real impact. Integrating carbon credits into a company’s ESG strategy not only supports achieving Net Zero emissions but also demonstrates a strong commitment to environmental responsibility.

References

Seneca ESG – Explanation of carbon credits and their role in ESG reporting.

https://senecaesg.com/insights/carbon-credits-explained-in-markets-and-esg-reporting/

Carbon Engineering – Discussion on how carbon credits contribute to achieving ESG goals.

https://www.carboneg.com/blog-en/the-role-of-carbon-credits-in-achieving-esg-goals

ISS Insights – Overview of carbon credits and associated controversies in the context of ESG.

Carboncredits.com, coin telegraph, Crypto star – Case study

https://cointelegraph.com/news/carbon-credit-nfts-are-only-effective-if-burned-experts-say

https://carboncredits.com/the-top-5-carbon-crypto-companies-to-watch-in-2023/

Climate impact X– Case study

https://www.climateimpactx.com/

ReAcc – renewable energy in Thailand – Case study

https://www.reacc.io/

The Role of carbon credit in ESG

Examples of Carbon Credit Initiatives in Asia

References

The Role of Blockchain in ESG & Carbon Credit