Auditing Carbon Credits: Can Companies Fake Their Green Initiatives?
In this era when corporate sustainability has become a buzzword, businesses everywhere are promising to limit their carbon output. One of their best-known weapons is carbon credits — a scheme that allows companies to "offset" their greenhouse gas emissions by funding eco-friendly projects. But just like every other scheme, it comes with its own set of cons. There have been many instances of carbon credit fraud, misreporting, and manipulation, which have made people question if the initiatives work or if it's just greenwashing. In this blog, we will discuss some ways in which businesses have been faking their green initiatives, the challenges auditors face in verifying carbon credits , real-life fraud cases, and auditing's future in this realm. Carbon Credits Defined and Why They’re So Hard to Audit Carbon credits are a tradable permit enabling companies to emit a certain amount of CO₂. If they emit less...