Carbon credits in sustainability reporting: what must, and must never, appear

No. UK SRS S2 paragraph 29(a) requires absolute gross greenhouse gas emissions, SECR contains no netting-off provision, and the revised ESRS E1 says an undertaking shall not include purchased, sold or transferred carbon credits in the calculation of its GHG emissions. Credits are disclosed separately from the inventory, never subtracted from it.

CSRD and ESRS approve no provider, registry or scheme. The revised ESRS E1 asks for the amount of carbon credits, in tonnes of CO2e, that are verified against recognised quality standards and cancelled in the reporting period, the amount purchased and not yet cancelled, and the share from removal projects. So a credit used in a CSRD report needs to be traceable to a named quality standard and a cancellation record; which standard counts as recognised is for the undertaking to explain.

In a UK SRS S2 report, paragraph 36(e) sets what must be said about planned credit use against a net target. What a company then says in marketing is governed by general consumer law: the Digital Markets, Competition and Consumers Act 2024 prohibits misleading actions and omissions from 6 April 2025, with CMA penalties of up to £300,000 or 10% of turnover, whichever is higher. The CMA Green Claims Code and CAP Code section 11 set out how the regulators read that law. In the EU, Directive (EU) 2024/825 bans product-level neutrality claims based on offsetting from 27 September 2026.

Where a company has a net greenhouse gas emissions target and plans to use carbon credits to achieve it, paragraph 36(e) requires four items: how far the target relies on credits, which third-party scheme will verify or certify them, the type of credit, and any other factors needed to understand their credibility and integrity. Paragraph B71 says only planned use must be disclosed.

Not as a hard requirement. UK SRS S1 and S2 were published by the Department for Business and Trade on 25 February 2026 for voluntary use. On 30 September 2026 the FCA published Policy Statement PS26/19, whose final rules require in-scope listed companies to report against UK SRS on a comply or explain basis for accounting periods beginning on or after 1 January 2027, with first reporting in 2028. CP26/5 had proposed making UK SRS S2 mandatory; the final rules apply comply or explain across all categories of disclosure.

No. Paragraph B71 states that an entity is required to disclose only its planned use of carbon credits. Information about credits already bought may be included where it helps a reader understand the target, but it is not required.

Not under paragraph 36(e), which is triggered by a net greenhouse gas emissions target. A company with no net target can buy and retire credits without a 36(e) disclosure. Any marketing claim it makes about them is still subject to consumer law and the advertising codes.

Not on its own. The ICVCM approves carbon crediting programmes as CCP-Eligible and methodologies, version by version, as CCP-Approved. The label says a credit was issued under an approved methodology by an eligible programme; it is not an assessment of how an individual project has performed.

No. No UK instrument bans them outright, and the DMCC Act blacklist in Schedule 20 names nothing about carbon, climate or offsetting. They are actionable if they mislead, and the ASA position is that an unqualified carbon neutral claim is misleading, so the basis of the claim, including any offsetting, has to be clear.