Stop wasting your CSR budget—fund impact, not greenwashing offsets

Stop “offsetting” your negative environmental impact. Most enterprise attempts at offsetting currently fail, usually because they involve token payments for positive-sounding projects that are either non-permanent, being built anyway, are double-counted, or harm communities. And big-name companies are finding themselves in court, not only wasting their budget but also embarrassing themselves in front of their customers and finding that greenwashing comes with its own costs.

Those responsible for funding sustainability and corporate social responsibility (CSR)—the CFO, CSO, and board in their risk management capacity—should fund proven positive contributions to the environment and society, which is what CSR was meant to be. Unproven, expensive offsets are at best worthless and at worst constitute “greenwashing” that can damage your brand or lead to a lawsuit.

Over 80% of offsets fail individually, and carbon markets are a total system failure

A recent study in Nature found that less than 16% of offsets are effective in reducing emissions. Companies should behave as they want to be regulated. The leaders and enterprises that prove the best carbon removal, nature restoration, and social impact programs will now be the ones policymakers, consumers, and businesses look to as examples of the systems change sustainability needs.

Several major enterprises are also falling foul of greenwashing lawsuits, including H&M, Vanguard, Lululemon, TotalEnergies, Shein, and Adidas. Many fines go into millions and tens of millions. And remember Volkswagen, which has faced $35 billion in various global penalties for the “Diesel-gate” emissions-hiding scandal?

Another review study illustrated five deep-seated issues in carbon markets. Regulators are closing in; your next audit could expose liabilities:

• Double-counting of emissions reductions by buyers and sellers;
• Credits for projects that would have been built anyway, such as profitable solar and wind farms;
• Non-permanent projects, for instance, trees planted that then burn in wildfires;
• Leakage due to negative side effects or emissions resulting from simply moving elsewhere, like logging;
• Environmentally positive projects failing on social justice, for instance, by negatively impacting indigenous communities.

So, up your game. Follow the lead of the organizations redefining CSR.

Long-term projects prove credibility—short-term PR is a reputational and legal liability

Eden Greenspace is trying to move the needle toward positive contributions as CSR— projects with staying power, not short-term payments for PR certificates that lead to no positive impact.

Coral reefs, for instance, have been a longstanding indicator of climate change, bleaching through rising water temperatures and decimating marine animal and plant life. Tourism and fishing are also negatively impacted.

Restoring reefs is an undeniable positive contribution, provided they can adapt and withstand the effects of rising temperatures, and that the projects have a long-term impact. Eden Greenspace has worked on several such projects spanning over 10 years, including projects in Hawaii and Mexico, where it has monitored and addressed threats to preserve reefs, restore aquatic life, increase carbon sequestration, and reduce pollution.

The 2025 Earthshot Prize recently provided another example. re.green in Brazil aims to make protecting the Amazon and Atlantic Forest financially viable; Nestlé and The Brazil Climate Fund are partners. Nestlé and re.green are restoring 2,000 hectares of Atlantic Forest by planting and regenerating 3.3 million native trees as part of a broader sustainability and resilient value chains initiative.

Devastation like deforestation is too often simply moved elsewhere—so fund watertight projects

There is an ongoing debate around whether a “watertight” carbon removal or nature restoration project must cover 100 years or 1,000. While the debate goes on, monitoring is crucial, as is adaptation, as temperatures and ecosystems continue to change despite the efforts of individual projects.

It is especially important that your enterprise’s contributions do not shift emissions elsewhere; for example, projects that avoid logging often lead to that same logging happening elsewhere. Changing the project’s location did not eliminate its impact. Projects, therefore, must look to add clear outcomes that hold and that otherwise would not have come about.

Too many enterprises fall for carbon capture bullsh*t that is orders of magnitude away from the hype—fund new, scalable outcomes instead

Power purchase agreements or renewable energy certifications you buy, for instance, should clearly demonstrate they are funding new energy projects, not projects already running or that would be built anyway due to the increasingly positive economics of clean energy.

This is where leadership should consider CSR and “offsetting” budgets; however, in general, they should prioritize directly reducing the impact of their organization. This is especially true given that abatement technology, such as carbon capture and storage (CCS), is still far from being effective at the scale needed to make a difference.

We need to fund scalable projects that work now. CCS currently accounts for approximately 50 million tons per year, or 0.1% of the roughly 50 billion tons of global emissions, despite being vocally pushed as a savior (and an excuse not to directly reduce emissions) by industries like oil and gas. Scaling CCS in the near future—before the far more vital immediate task of direct emission reductions (through adopting clean energy, efficiency, new materials, and circular supply chains)—is a waste of funding for most outside the R&D field. It remains worth developing as part of the toolbox… but not as a reason to delay action now.

Flippantly, if the oil and gas industry is so confident that CCS is the solution that will allow them to continue operating as they do now, let them fund it.

Fund socially-just projects—trees won’t impress greenwashing courts or customers if you’ve left people homeless

Any environmental project must also protect communities, indigenous peoples, and all affected in the scope of sustainability efforts. Companies will also fail in the eyes of their customers if they plant trees but lay off employees en masse.

Kernel and Sentinel Earth, for instance, are developing agricultural carbon certificates in Ukraine to go beyond token payments as offsets to deep environmental outcomes—and for a people still battling Russia’s invasion.

The Seeds of Recovery project aims to transform climate actions from a cost center into a value driver with cross-sectoral benefits, with a focus on supporting Ukraine’s recovery.

— Marta Trofimova, Head of Sustainability, Kernel

Kernel’s goal is to tailor the project to the needs of Ukrainian agricultural producers whose land requires remediation after humanitarian demining and the impacts of war. The monetized project aims to incentivize soil productivity restoration and carbon removal.

We have long covered Kernel’s work in the most challenging circumstances, including here at COP29 in Baku, where sustainability’s inherent positive outcomes encompass energy security, mental health support for veteran employees and their families, and food security for the local population.

To highlight a second Earthshot prize winner as an example of social justice, Friendship helps vulnerable communities in Bangladesh access public services, healthcare, and education, while also preparing them for natural disasters.

Avoid double-counting; regulation is coming down hard on greenwashing

Ensure your contributions are valid—the board will thank you. Bodies like the Integrity Council for the Voluntary Carbon Market (ICVCM) assess the science and approve effective offsets. Other ratings agencies validate projects through various methods, such as auditing or more constant monitoring. The Anti-Greenwash Charter (TAGC) is another example of an independent standard that helps organizations communicate sustainability efforts clearly and honestly. TAGC aims to build trust, avoid the reputational risk of greenwashing, and stay ahead of growing global regulations.

The Bottom Line: Greenwashing is embarrassing and increasingly criminal. Cut the offsets and fund proven positive outcomes—to keep your customers and stay out of court.

CSR has attracted plenty of criticism. But by taking a positive contribution approach like the successful examples in this report—not offsetting or greenwashing—you’ll achieve more than a tick box. You’ll win the trust of customers, partners, employees, and the law.