Carbon credit intelligence
A carbon credit report and an emissions inventory are not the same document. Getting that distinction right is the difference between a compliant SECR, UK SRS or CSRD disclosure and one that has quietly misstated its gross emissions.
Offsets never reduce the gross Scope 1–3 figures a company reports under SECR or UK SRS. The GHG Protocol Corporate Standard requires companies to calculate and disclose gross emissions before any credits are considered, and treats project-level offset accounting as a separate discipline from corporate inventory accounting — see the GHG Protocol Corporate Standard and its published standards FAQ. The same principle now appears, worded slightly differently, in every major framework a UK company is likely to touch:
The 2018 regulations require disclosure of gross Scope 1 and 2 emissions (and, for large unquoted companies, transport). There is no mechanism in SECR for netting purchased carbon credits against those figures.
Paragraph 36(c) requires a net emissions target to be shown against its associated gross target. Paragraph 36(e) then requires four specific disclosures about any carbon credits a company plans to use.
ESRS E1 paragraph 34(b) requires gross GHG emission-reduction targets that exclude removals, carbon credits or avoided emissions; E1-6 does not permit credits to be disclosed as an offset against reported emissions.
EFRAG’s draft amended ESRS E1 (submitted to the European Commission in November 2025) is explicit on this point — see the published draft — and the UK text is worded almost identically to IFRS S2, which the government chose to adopt without adding a UK-specific requirement to disclose credits actually purchased and retired, preferring any such change to come from the ISSB.
UK SRS S2 paragraph 36(e) is the specific requirement. It applies where a company has a net greenhouse gas emissions target and plans to use carbon credits to help reach it, and it asks for four items — UK SRS S2, Department for Business and Trade, February 2026:
The extent to which, and how, achieving the net target relies on carbon credits
A quantified share, not a sentence saying credits "may" be used
Which third-party scheme or schemes will verify or certify the credits
Name the programme — VCS, Gold Standard, Woodland Carbon Code and so on
The type of credit: nature-based or technological removal, and reduction or removal
Two independent axes, both required, commonly conflated
Any other factors necessary to understand credibility and integrity
Permanence is the standard’s own named example; additionality is the obvious companion
Only planned use has to be disclosed under paragraph B71 — credits already bought may be mentioned if that helps a reader understand the target, but it is not required. The four items build a disclosure skeleton, not an emissions calculation; the emissions calculation is the gross inventory above, and the two never merge.
Disclosing credits correctly in a report is one question. What a company may then say in marketing — “carbon neutral”, “net zero”, “offset” — is a separate one, governed in the UK by the Competition and Markets Authority’s Green Claims Code. In outline, the Code asks that an environmental claim be truthful and accurate, clear and unambiguous, not omit or hide material information, avoid unfair comparisons, consider the full life cycle of the product or service, and be substantiated with evidence — see the CMA’s own guidance, collected at GOV.UK and at the Green Claims Code campaign site, for the exact wording rather than a paraphrase.
The CMA published further supply-chain guidance on 22 January 2026 — Making green claims: getting it right, across the supply chain — making clear that a business cannot rely blindly on a supplier’s assurances about a claim and is expected to take reasonable steps to verify it. Offset-based claims are a recurring focus area, which is exactly why paragraph 36(e)(ii)’s requirement to name the verifying scheme, and 36(e)(iv)’s catch-all on credibility and integrity, matter as much for marketing risk as for reporting compliance.
A credit that clears every rating agency’s screen still does not license a downstream marketing claim by itself. The two are assessed separately, by different bodies, against different tests.
The Integrity Council for the Voluntary Carbon Market’s Core Carbon Principles are the closest thing the voluntary market has to a common supply-side integrity benchmark, and they sit behind the “credibility and integrity” language in paragraph 36(e)(iv). Ten principles fall into three groups: governance (effective oversight, tracking, transparency, independent verification), emissions impact (additionality, permanence, robust quantification, no double counting), and sustainable development (co-benefits and safeguards, contribution to the net-zero transition).
A credit only carries the CCP label if both its issuing programme and its specific methodology have separately passed assessment — see the ICVCM’s assessment status table for the current list. The four risk factors that do most of the work inside that assessment — additionality, baseline and over-crediting, permanence, and leakage — are covered in depth, including how the main rating agencies each assess them, in carbon credit risk analysis, and the rating agencies and their scales are introduced in carbon credit ratings explained.
SRS Credit provides independent carbon credit risk analysis to support the credibility-and-integrity disclosure paragraph 36(e)(iv) asks for.
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