How Are Companies Approaching Voluntary Carbon Markets?
Voluntary carbon markets continue to play a complementary role in corporate net zero strategies. A recent study published by the Morgan Stanley Institute for Sustainable Investing highlights a clear shift in how global companies perceive and use voluntary carbon credits.
Based on a survey of 225 global companies with annual revenues exceeding $1 billion, the report shows that while existing buyers are committed to scaling their use of carbon credits, companies that have not yet entered the market remain cautious due to pricing, regulatory, and credibility concerns.
Corporate Spending on Voluntary Carbon Markets Is Rising
According to the report, more than 90% of companies currently purchasing voluntary carbon credits plan to continue doing so and increase their purchasing volumes over time. These companies are primarily large, publicly listed organizations with clearly defined net zero targets and mature sustainability strategies.
Despite growing corporate interest, the total market size remains limited. In 2024, the global value of traded carbon credits was approximately $500 million, significantly below the $2+ billion peak recorded in 2021.
However, a major structural shift is underway: companies are moving away from short-term spot purchases and toward long-term carbon removal offtake agreements. By 2025, annual contracted volumes in this segment exceeded $7 billion, signaling a transition toward higher-quality and more integrated climate solutions.
Emission Reductions Take Priority in Net Zero Strategies
The research clearly shows that companies do not view carbon credits as a primary decarbonization solution, but rather as a complementary mechanism. Current buyers expect to achieve roughly two-thirds of their required emission reductions within their own operations and value chains.
Survey results indicate that:
32% of respondents say that real emission reductions will directly determine their credit needs,
28% rely on grid decarbonization and other solutions,
only 7% classify emissions as “residual” and plan to offset them through carbon removal.
This highlights a growing corporate focus on Scope 1, Scope 2, and especially Scope 3 emissions.
Pricing, Regulation, and Credibility Drive Decision-Making
Companies that plan to enter the voluntary carbon market remain more cautious. While many expect to reach purchasing levels comparable to current buyers by 2030, more than half report uncertainty regarding their future volumes.
The main drivers of this uncertainty include:
carbon credit pricing volatility,
regulatory and policy uncertainty,
concerns around credit integrity and reputational risk.
Regional differences are also evident. Companies in North America and Asia-Pacific emphasize price sensitivity, while those in Europe, the Middle East, and Africa place greater weight on regulatory clarity and policy frameworks.
Why Some Companies Stay Out of Voluntary Carbon Markets
The study also explores why certain companies do not plan to participate in voluntary carbon markets. Nearly 39% of these companies believe they can fully decarbonize their operations and value chains without relying on carbon credits.
However, only around 25% of non-participating companies have a net zero target, compared to 95% of current buyers and 85% of future buyers. Furthermore, 31% of non-participants do not plan to set a net zero target at all, while 44% state that their strategies are still evolving.
Sectoral distribution supports this trend: healthcare companies are overrepresented among non-participants, while energy companies are less so, indicating that lower-carbon-intensity sectors remain more hesitant to engage with voluntary carbon markets.
Companies Prioritize Decarbonization Within Their Value Chains
Both current and future buyers plan to achieve approximately two-thirds of their emission reductions within their own operations and supply chains. More than 85% of surveyed companies are already implementing or evaluating initiatives such as supplier energy efficiency programs, nature restoration projects, and other value-chain interventions.
This reflects a broader shift toward addressing Scope 3 emissions and embedding sustainability deeper into corporate value chains. According to Cristina Lacaci, Head of Global Sustainability Structuring and EMEA Sustainable Capital Markets at Morgan Stanley, companies are increasingly adopting holistic strategies that extend beyond direct emissions to include biodiversity and nature-based solutions.
Quality, Reputation, and Limited Supply Remain Key Constraints
The research confirms that quality and reputational risk remain central considerations in voluntary carbon markets. Nearly half of current buyers identify reputational risk as one of the most critical factors in their carbon credit strategy. Still, more than 80% believe the benefits of participation outweigh the risks.
To manage project-related risks, companies increasingly adopt a portfolio approach. Demand for high-integrity credits—particularly those aligned with the ICVCM Core Carbon Principles (CCP)—continues to rise, while supply remains constrained.
According to Iain Mackay, Head of Environmental Markets at Morgan Stanley, companies now have a much clearer understanding of what type of credits they want and how much they are willing to pay. The strongest demand is for nature-based solutions priced between $15 and $30 per tonne.
Conclusion: Voluntary Carbon Markets Are Becoming More Selective and Quality-Driven
While voluntary carbon markets may not experience rapid volume growth in the short term, they are evolving toward a more selective, credibility-focused, and strategically integrated structure. Current buyers expect to increase their credit purchases by more than 25% by 2030 and over 43% by 2035. Future buyers aim for similar levels but continue to face higher uncertainty.
Overall, the findings suggest that the future of voluntary carbon markets will be defined not by scale alone, but by quality, long-term impact, and integration into corporate decarbonization strategies.