The Role of Carbon Credits in Your CRP
A question worth exploring as suppliers navigate Net Zero, procurement requirements and sustainability reporting
Over the last few months, I've noticed an increasing number of conversations about carbon credits, particularly among suppliers preparing Carbon Reduction Plans (CRPs), developing Net Zero strategies, or responding to public sector tenders.
It got me thinking:
What role should carbon credits actually play within a Carbon Reduction Plan?
The question is becoming increasingly relevant as organisations seek to balance commercial realities, environmental responsibilities and growing stakeholder expectations. Yet despite the attention carbon credits receive, there remains considerable uncertainty about how they fit within the wider context of carbon reduction and public procurement.
My intention here is not to advocate for or against carbon credits. Rather, I would like to explore where they might sit within a credible carbon reduction journey and how procurement professionals, sustainability practitioners and suppliers may wish to think about them.
Understanding the Purpose of a Carbon Reduction Plan
The primary purpose of a Carbon Reduction Plan is to demonstrate how an organisation intends to contribute towards Net Zero through a structured programme of measuring, managing and reducing greenhouse gas emissions.
For many suppliers seeking to win public sector contracts, a CRP has become an important part of demonstrating environmental responsibility and alignment with the UK's wider climate ambitions.
At its core, a Carbon Reduction Plan is typically focused on:
Establishing an emissions baseline.
Measuring Scope 1, Scope 2 and relevant Scope 3 emissions.
Identifying opportunities to reduce emissions.
Setting reduction targets.
Reporting progress over time.
In my experience, the emphasis is generally placed on demonstrating genuine efforts to reduce emissions at source and embedding environmental considerations into day-to-day operations.
So Where Do Carbon Credits Fit?
This is where the conversation becomes interesting.
Carbon credits can undoubtedly play a role within an organisation's wider sustainability strategy. They can support projects that remove, avoid or reduce greenhouse gas emissions elsewhere and may help organisations address emissions that are difficult or currently impossible to eliminate.
However, many sustainability frameworks and Net Zero pathways tend to place carbon credits towards the latter stages of the journey.
A simplified illustration might look something like this:
Measure → Reduce → Improve → Address Residual Emissions → Consider Carbon Credits
Viewed through this lens, carbon credits are not necessarily an alternative to emissions reduction but rather a potential mechanism for addressing residual emissions that remain after reasonable reduction efforts have been made.
What Does This Mean in a Procurement Context?
Having spent time supporting suppliers with bid submissions and sustainability initiatives, I often find myself reflecting on what procurement teams are actually seeking when they ask for Carbon Reduction Plans.
Whilst every procurement exercise is different, there appears to be a growing focus on evidence of:
Carbon measurement and reporting.
Continuous improvement.
Environmental governance.
Practical reduction initiatives.
Long-term commitment to Net Zero.
In other words, buyers often seem interested in understanding how suppliers are reducing their environmental impact rather than simply how they are compensating for it.
That does not mean carbon credits have no place. Rather, it suggests that they may be most powerful when presented as part of a broader carbon reduction strategy rather than as the strategy itself.
The Importance of Transparency
Another aspect worth considering is transparency.
As carbon markets continue to evolve, organisations are increasingly expected to explain how carbon credits are being used, why they have been selected and how they complement wider reduction efforts.
Stakeholders, investors, customers and procurement teams are becoming more sophisticated in their understanding of environmental claims. As a result, organisations may benefit from clearly communicating:
What emissions have been reduced.
What emissions remain.
Why certain emissions are currently unavoidable.
How any carbon credits have been selected and verified.
Transparency can often build trust more effectively than ambitious claims alone.
Looking Ahead
The UK's journey towards Net Zero is creating new expectations for both public and private sector organisations. Carbon Reduction Plans, sustainability reporting and environmental disclosures are becoming increasingly important tools for demonstrating progress.
As this landscape continues to develop, I suspect the conversation will become less about whether organisations use carbon credits and more about how they use them, when they use them and how they communicate their role within a wider environmental strategy.
Perhaps the question is not:
"Should organisations use carbon credits?"
but rather:
"At what point in their carbon reduction journey do carbon credits become appropriate?"
For many organisations, the most compelling environmental story will continue to be one built on measurement, transparency, continuous improvement and genuine emissions reduction.
Carbon credits may well have an important role to play within that journey, particularly in addressing residual emissions that cannot yet be eliminated. However, they are unlikely to replace the value of demonstrating real and measurable progress.
