Carbon credits aren’t a shortcut — they’re a strategic asset. Here’s how to leverage them in aThe world is set to cross 1.5°C, most likely within the next few years. For companies with climate commitments, this shifts the finish line and impacts the tools required to get there have. decarbonization strategy that stands up to scrutiny.
On September 2, the UN Environment Programme released its Limiting Overshoot report, confirming what climate scientists have signalled for some time: global temperature rise is on track to exceed 1.5°C above pre-industrial levels, likely within the next few years. Even in the most optimistic scenario modelled, warming peaks at 1.8°C. Most scenarios show a higher peak.
The report is not a resignation. It lays out an “overshoot, peak, and decline” pathway. This is a pathway to keep the overshoot as small and short as possible and eventually bring temperatures back below 1.5°C through sustained emissions cuts and large-scale carbon removal.
What the Report Actually Says
The report warns that every additional fraction of a degree increase and year at elevated temperatures increases the risk of crossing irreversible tipping points such as destabilized ice sheets, Amazon degradation, and disruption of Atlantic Ocean currents. This changes how companies should approach their climate commitments and implement their strategy:
- Overshoot is now the operating assumption. Global temperatures will exceed 1.5°C. The credible question is no longer whether to prevent it, but how to minimize its magnitude and duration.
- Net-zero is a checkpoint, not the finish line. The report is explicit that net-negative emissions, pulling more carbon out of the atmosphere than we’re emitting, are required to bring temperatures back down. Removals are now a necessary addition, rather than an optional complement, to sustained reductions.
- Governance of carbon removal is now critical. Scaling removal projects responsibly, with environmental integrity, equity, and appropriate scale, is called out as essential.
Why This Matters for Corporate Carbon Strategies
Most corporate net-zero targets were designed against a “stay below 1.5°C” scenario. The overshoot pathway doesn’t invalidate those targets, but it raises the bar on how they must be met.
- Reduction ambition needs to accelerate. The shorter and shallower the overshoot, the smaller the long-term removal burden. Companies that delay reductions today are effectively passing a larger residual footprint to their future selves.
- Removals become strategically important, not optional. As global pathways depend increasingly on CO2 removal, buyers will need durable, verifiable removals as part of their portfolios, particularly for hard-to-abate residual emissions.
- Quality and permanence will face increased scrutiny. In an overshoot world, a credit that fails to deliver its promised climate benefit isn’t just a reputational risk. It contributes to a longer and more damaging peak.
Three Shifts Buyers Should Make Now
The report is a signal to act, not to panic. For companies already engaged in the voluntary carbon market, there are three practical shifts worth considering:
- Revisit your reduction pathway. If your current plan assumes gradual improvement to 2050, ask whether it can be accelerated. Front-loading reductions are the single most valuable contribution most companies can make to minimizing the overshoot.
- Start building removal capacity into your portfolio. Durable removal credits like reforestation with strong permanence safeguards, biochar, and direct air capture are currently more expensive and less abundant than avoidance credits. Buyers who begin engaging now will secure better project access and better prices than those who wait.
- Raise your quality bar deliberately. Screen credits against the ICVCM’s Core Carbon Principles, verify additionality and permanence project by project, and align internal teams on what your organization will and will not buy. In an overshoot world, a defensible portfolio matters more than a large one.
The Bottom Line
The UNEP report is a hard read, but not a hopeless one. An “overshoot, peak, and decline” pathway is still possible. Corporate action is a meaningful part of what makes it possible. What has changed is the margin for error.
For companies with credible climate commitments, now is the time to sharpen the reduction pathway, integrate durable removals into long-term planning, and hold every credit purchase to a standard that would survive scrutiny at a higher temperature and a longer time horizon.
Our team at Deduci specializes in developing high-quality and defensible carbon credit portfolios. We work with you to customize your approach in alignment with your company’s preferences and industry best practices. Reach out to us at info@deduci.com or drop into one of our webinars to learn more about incorporating carbon removal into your strategy.