Carbon markets must industrialise or the net zero transition stalls
When nearly three in four of the world’s largest companies commit to something, it signals a fundamental shift in how business leaders think about risk and opportunity.
Climate Impact Partners’ latest analysis of Fortune Global 500 companies found that 72 per cent now hold at least one climate commitment, up from fewer than one in four in 2019. More than half, meanwhile, have adopted net zero targets.
Given that these companies collectively account for more than one third of global GDP, their investment in climate-forward strategies is a powerful indicator of where business, and the economy, is heading.
Where sustainability was once framed as a cost or a compliance exercise, it’s now increasingly understood as a driver of jobs, capital attraction, supply chain resilience and long-term competitiveness.
The challenge now is not proving that climate solutions work but scaling them fast enough to match the ambition and global need.
Carbon markets enter the mainstream
The solutions themselves are diverse. Companies are investing in renewable energy, improving efficiency, decarbonising supply chains and developing new technologies.
But many organisations also recognise that some emissions remain difficult to eliminate today.
As a result, attention is increasingly turning to the role carbon markets can play alongside direct decarbonisation efforts.
Our research shows that companies with net zero commitments are eleven times more likely to use carbon credits as part of their climate strategies with more than 44 per cent of Fortune Global 500 companies intending to use them. These organisations are not treating credits as a substitute for cutting emissions. They are using them to address hard-to-abate emissions and accelerate impact beyond their own value chains.
Carbon markets must industrialise
As scrutiny increases and standards tighten, corporates are prioritising credits that are verifiable, durable and aligned with evolving quality frameworks and benchmarks.
Carbon markets can no longer operate as a fragmented collection of projects. The reality is that carbon markets need to industrialise, moving from bespoke projects to infrastructure-like systems capable of delivering climate solutions at scale.
Before joining Climate Impact Partners, I spent over two decades in automotive and renewable energy at GM and GE. These were industries built on standardisation and the ability to replicate proven operational models at pace.
The carbon market needs that same discipline with common methodologies and contracting frameworks to allow markets to move from bespoke activity to scalable, repeatable delivery with quality.
The parallel here is with the renewables sector over the past 15 years: which have transitioned from niche investment to a standardised, financeable asset class that now underpins energy systems worldwide. That transition did not happen by accident and it required long-term contracting, political will, regulation, common methodologies, and the kind of capital commitment that only comes when investors can underwrite predictable returns. The same logic can, and should, now be applied to carbon markets.
Building climate infrastructure
Multi-year and multi-decade agreements are essential to de-risk project development and support the build-out of high-integrity supply. Large-scale carbon projects typically take seven to ten years from initiation to full issuance. If progress on climate goals is the aim, the required investment and partnerships need to begin now.
Earlier this year, Climate Impact Partners partnered with Aviva Investors and &Forest on Llanos Vivos, a large-scale afforestation and restoration project in Colombia. Backed by institutional capital, long term commitment and action, the project will restore up to 13,600 hectares of degraded land, while supporting biodiversity and local livelihoods alongside carbon removal, across an area the same size as Paris. This is just one example of what infrastructure-like project development looks like in practice with quality and delivery predictability designed-in from the outset, over a 40 year term.
Projects like this point to where the market is heading. As institutional capital finds its footing in carbon finance, the broader integration with the economy accelerates. Embedding carbon finance into agriculture, energy and land use, and linking emissions reduction directly to economic and regulatory activity. Compliance frameworks are helping to formalise that integration, providing durable demand signals and embedding carbon markets into national and corporate systems.
The infrastructure for a functioning, high-integrity carbon market is being built but the task now is to build it fast enough.
