Will Richardson explains three regulatory shifts taking effect September 27, 2026 that will ban carbon-neutral marketing claims based on offsets. The EU fines companies at least 4% of turnover for product-level offset claims, SBTi now requires 90% absolute emissions cuts before offsets count, and most historic offset credits lack real impact. Companies need to measure emissions accurately, cut Scope 2 via renewables, and remove offset language from marketing before the deadline.
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Hey, thanks so much for listening. I would love to be able to help you more on what it is that you are listening to and why you're listening to, to me. If you could click on the link in the show notes, that would be awesome because it will help me define what it is that we should be talking about on this podcast. If your business has ever used the words carbon neutral, climate neutral, or net zero on a product, a website, or an ad, you have a problem most leadership teams have not noticed yet. From the 27th of September 2026, the European Union is banning those claims when they rely on offsets. France already banned them. German courts are already striking them down. The penalty floor is That is 4% of national turnover. 80% of listed companies have a net-zero target. Only 11% have actually cut their emissions. That gap is where carbon offsets have lived for the last decade. And the rules that let them live there are about to disappear. In the next 10 minutes, I'm going to show you 3 things. Exactly what changed and when. Why most offsets bought in the last 10 years did not actually do what they claimed. And the order of priority you should be using instead, starting this quarter. I've spent 25 years in sustainability consulting. I've seen the offset market build up, and I'm now watching it get rebuilt from scratch. Let's go through it. What carbon offsetting actually is. A quick refresher first, because I want everyone watching to be on the same page. Carbon offsetting lets a company pay for a ton of carbon it has emitted by buying a credit that claims to remove or avoid a ton somewhere else. Plant trees here, fund efficient cookstoves there, capture methane a landfill. Maths is meant to balance. 1 tonne emitted, 1 tonne offset, net zero. In theory, a business can emit as much as it likes and still call itself carbon neutral as long as it buys back the equivalent. And for years, that is exactly what happened. Companies emitted, bought credits, updated the website, and moved on. Regulators looked the other way. Marketing teams ran with it. That entire model has quietly dismantled over the last 3 years, and 2026 is the year the consequences land. The 3 things that have changed. 3 things shifted at the same time, and together they have rewritten the rules completely. I want to walk you through all 3, because if you understand these, you understand exactly where this is going. The first is the integrity floor. The Integrity Council for the Voluntary Carbon Market set a new global benchmark: the Core Carbon Principles. So far, they have approved 40 carbon credit methodologies and rejected 25. Around 107 million credits now carry the new high-integrity label. That sounds like a lot. until you compare it to the historic issuance. 107 million credits is a tiny fraction of what has been sold over the years. This tells you something really important. The vast majority of the legacy offset market did not meet the bar. Most of what businesses bought, by volume, would not pass today's standard. The second change is the Science Based Targets initiative. Held the line. Despite heavy lobbying in 2024 to allow more offset use, the SBTi continues to require companies to cut absolute emissions by around 90% first before any credits can be used to neutralise what is left. Offsets do not count towards your Scope 1, 2, or 3 reduction targets. They are an extra On top, only for genuinely irreducible 10%. The third change is the one most marketing teams have not registered yet. The law changed. From the 27th of September 2026, the EU's Empowering Consumer Directive bans product-level carbon neutral, climate neutral, and net zero claims if they rely on offsetting. France did it in 2023. German courts have already struck down vague climate-neutral marketing. And the penalty floor is 4% of national turnover, which for a mid-sized European business is a number that gets the board's attention. Put those 3 changes together and the conclusion is unavoidable: offsetting on its own is no longer a credible climate strategy. And saying it is one On a label or a website is now a legal risk. Did offsets ever actually work? Now, the question I get asked the most often is, did offsets ever actually remove carbon in the first place? The honest answer: sometimes. Not always. And the gap between the two has been the whole problem. Investigations from 2023 onwards into rainforest credits from one of the world's biggest credit registries found that the large majority of those credits did not represent real additional emission reductions. Read that again: the majority— not a fringe minority— the bulk of what was being sold. Independent reviews submitted to the SBTi reached similar conclusions: a meaningful share of corporate credits did not deliver what it claimed. And in some cases, the existence of cheap offsets actually slowed down decarbonization because companies bought their way out instead of doing the real work. This is why the new integrity label matters. It is an auditable signal that a credit has actually passed proper tests, that the project is additional, That carbon stays sequestered, that the maths is verifiable. If a credit cannot carry that label, treat it as a marketing, not mitigation. So what to do instead? So if offsetting is not the strategy, what is? Reductions. Everything else is supporting cast. Here is the order of priority your business should be working through right now. One, measure properly across all 3 scopes. Scope 1, your direct operations. Scope 2, your purchased electricity. And Scope 3, your supply chain and everything beyond. You cannot manage what you have not measured. And most Scope 3 numbers sit in older spreadsheets, are not simply good enough for the audits that are coming. 2, set science-based targets. Around 9,000 organizations now have validated SBTi targets, and we saw 40% growth in new target setting in 2025 alone. The market is voting with its feet. A validated target forces specificity. By when? By how much? Using what levers? 3, Cut Scope 2 to zero. Switch to genuine renewable energy. This is the largest, easiest line on most footprints, and a real renewable energy contract can remove it almost entirely. One decision, massive results. 4. Engage your supply chain. The suppliers responsible for 67% or more of your Scope 3 emissions need a plan Not a questionnaire. Make emission data part of procurement. If your suppliers cannot measure their footprint, they cannot reduce it. And if they can't reduce it, neither can you. 5. Cut business travel emissions. Domestic flights become rail. Long haul becomes economy. Publish the numbers monthly. When emissions become visible monthly, behavior shifts fast. 6, and this one is urgent: audit your own marketing language now. Anything with carbon neutral, climate neutral, or net zero on it that is backed by offsets needs to come off your packaging, your website, and your ads before September 2026, not after the directive lands. Before. And if you still do buy credits, only use ones that carry the high-integrity label and call it a contribution to climate action beyond your value chain, not a compensation for the emissions you have not yet cut. Those 2 words mean different things in law now. So the bottom line. Here is where this leaves you. Offsetting is not dead. But the version of offsetting most businesses bought into is: credits are no longer a shortcut to neutrality. They are an optional extra layered on top of real reductions governed by far tighter rules than they used to be. The companies pulling ahead in 2026 are treating decarbonization as a competitive advantage, not a compliance task. They are measuring properly, cutting hard, engaging suppliers, and using high-integrity credits sparingly and honestly only for what is genuinely left. They are not buying their way to net zero. They are building their way there. And the businesses that do not make that shift in the next 18 months are not just going to fall behind on climate. They are going to fall foul of regulators, lose investor confidence, and end up writing or rewriting all their marketing under legal pressure rather than on their own terms. There is no shortcut. There is just the work done properly. If this was useful, here is what I would do on this channel. Every week I take part— take the part of sustainability news that it's getting wrong. And I show you what the real rules and the real numbers actually say. Subscribe so you do not miss it, because the regulatory picture is changing faster than most leadership teams can keep up with. Drop a comment with this: Is your business still using carbon-neutral language in any of its marketing right now? Genuinely curious how widespread this still is, because in my experience, it is everywhere. And if you're a sustainability professional, or a consultant, or an advisor, I'm building a referral network of practitioners who do this work properly. People who understand the difference between the contribution and compensation, between marketing and mitigation. The link is in the description. At 51 to Carbon Zero, we help FTSE, NASDAQ, XTRA, and IBEX-listed organizations close the gap between climate ambition and real reduction. If that is the conversation you need, the details are below. I'll see you next week.
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