Insights

How new standards, regulation and innovation are restoring offsetting as a credible tool to reduce carbon dioxide in the atmosphere.

From controversy to credibility

The first wave of carbon offsetting in the 2000s was plagued with controversy. But now, offsets offer building developers and asset managers a more credible, strategic way to manage residual emissions and demonstrate leadership to regulators, clients, and investors.

Companies used to buy cheap credits from questionable projects, often accused of displacing communities or overstating carbon savings. Sectors as diverse as oil, airlines, consumer brands and even film production companies were heavily criticised, this cemented offsets as a “licence to pollute”.

But we see the landscape shifting. Our analysis finds that the new standards are tougher, regulatory scrutiny is rising, and new frameworks allow firms to invest in and report offsets as part of credible, long-term climate strategies.

The regulatory reset

Globally, carbon policy is heating up. The EU’s Carbon Border Adjustment Mechanism (CBAM) will take effect next year, signalling the move towards a global carbon price, with COP30 discussions likely to accelerate this shift. A global carbon price could benefit building developers and property owners seeking to offset emissions, as it would help create a more level playing field.

Meanwhile, voluntary frameworks are cautiously integrating offsets. In 2025, the Science-Based Targets initiative (SBTi) updated its guidance to allow credits only for residual emissions that cannot be directly eliminated, keeping pressure on genuine decarbonisation.

Other standards reinforce this approach. We contributed to the development of the UK Net Zero Carbon Building Standard (NZCBS), which permits the use of offsets but requires alignment with either the Integrity Council for the Voluntary Carbon Market (ICVCM) or the International Carbon Reduction and Offset Alliance (ICROA). Both organisations have established Core Carbon Principles to screen out poor-quality credits, making it easier to identify credible investments in an otherwise fragmented marketplace. At Hoare Lea, we apply this in practice by using the Gold Standard, an ICROA-endorsed independent crediting programme, to offset our own emissions.

Why offsets are back on the agenda

We have been tracking three forces that are driving offsetting’s revival:

1. Credibility – Clearer definitions of additionality, permanence and transparency are revealing low-quality credits so that firms can opt for high-quality instead.
2. Accountability – Disclosure rules mean firms need to be specific when reporting their offsetting; strategies must stand up to scrutiny.
3. Technology – Asset owners can now invest in innovations that are scaling, such as biochar and direct air capture

Implications for the built environment

Offsetting provides a bridge for developers and asset owners grappling with hard-to-abate embodied carbon in materials like steel and cement, and emissions tied to tenants and supply chains. High-quality credits can cover these gaps while low-carbon solutions mature.

The challenge is credibility. We work with the UK Green Building Council, Better Buildings Partnership and NZCBS and their guidance is evolving rapidly, making it harder to keep pace, but crucial for maintaining integrity. For forward-thinking firms, opportunities exist. Forward agreements, allow companies to secure offsets now, locking in lower prices before demand and costs rise. Some developers are even exploring selling assets with years of emissions pre-paid, potentially adding value to asset.

Offsetting as catalyst, not crutch

Offsetting is no longer the loophole it once was, but neither is it a silver bullet. Emissions reduction remains the priority, with offsets reserved for the truly unavoidable.

To further increase credibility over time purchasers should look to transition from reduction projects, such as renewable energy, toward long-term removal solutions like direct air capture or ecosystem restoration. While these approaches are not without challenges, being costly, energy-intensive, or vulnerable to risks such as fire and disease, they currently represent the most effective options available.

But as the supply of credits increases the risk of quality deterioration also increases. This can be avoided through careful policing and governance over global projects.

Offsetting could lead to billions being channelled into technologies and ecosystems that underpin a net-zero future, transforming offsets from a crutch into a catalyst for climate action.

To hear more about how Hoare Lea can help contact RobertWinch@HoareLea.com.