How to offset carbon emissions: a step-by-step guide

Climate change is one of the most pressing challenges facing organizations today. With over half of global emissions coming from just 36 companies (The Guardian), the corporate sector has a massive role - and responsibility - in reversing climate damage.

“In 2023, 67% of business leaders were deeply concerned about climate change.” – Deloitte

For many businesses, learning how to offset carbon emissions is a critical first step toward sustainability. Whether you're just starting or looking to improve your approach, this guide walks you through every stage - from calculating your footprint to compensating carbon emissions.

By choosing a trusted partner like Cawa, you can simplify the process, and support verified, impactful climate projects.

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3 steps to compensate your carbon emissions

1. Calculate your carbon emissions

The first step is to measure your emissions. This involves understanding and categorizing your emissions according to the Greenhouse Gas (GHG) Protocol, which classifies emissions into three distinct scopes:

• Scope 1: Direct emissions

These are emissions from sources that are owned or controlled by your organization. Examples include emissions from company-owned vehicles, on-site fuel combustion, and industrial processes.

• Scope 2: Indirect energy emissions

These emissions result from the generation of purchased electricity, steam, heating, and cooling consumed by your organization. While the energy is produced off-site, its consumption is within your operations.

• Scope 3: Other indirect emissions

This category encompasses all other indirect emissions that occur in your value chain, both upstream and downstream. Examples include emissions from purchased goods and services, business travel, employee commuting, waste disposal, and the use of sold products.  

Accurately accounting for all three scopes is crucial for a comprehensive carbon footprint. Many tools are available for carbon footprinting, ranging from free calculators to more advanced enterprise-level software.

2. Identify opportunities to reduce carbon emissions

Offsetting is important, but reduction always comes first. Establishing clear, science-based targets ensures that your organization aligns with global efforts to mitigate climate change.

Aligning with Science-Based Targets Initiative (SBTi):

The SBTi provides a framework for companies to set greenhouse gas (GHG) emission reduction targets consistent with the latest climate science. Key components include:

• Near-Term Targets: Companies are expected to set 5–10 year targets that drive rapid and significant reductions in Scope 1, 2, and 3 emissions, aiming to halve emissions by 2030.

• Long-Term Targets: Organizations should commit to reducing emissions by at least 90% across all scopes by 2050, with the remaining emissions neutralized through permanent carbon removal solutions.

Adhering to SBTi guidelines ensures that your emission reduction efforts are robust and credible.

3. Select a climate project or portfolio

After implementing all feasible internal emission reductions, the next step is to compensate carbon emissions through high-quality, verified offset projects. According to the Voluntary Carbon Markets Integrity Initiative (VCMI), credible use of carbon credits should complement, not replace, direct emission reductions. The VCMI Claims Code of Practice stipulates that companies must:

• Set and publicly disclose science-based near-term emission reduction targets.

• Commit to achieving net-zero emissions no later than 2050.

• Purchase high-quality carbon credits representing emissions reductions or removals from outside their value chain.

To ensure the integrity of carbon credits, the Integrity Council for the Voluntary Carbon Market (ICVCM) has established the Core Carbon Principles (CCPs), which define high-quality carbon credits as those that are:

• Additional: Emissions reductions or removals that would not have occurred without the carbon credit revenue.

• Permanence: Long-term durability of the emissions reduction or removal.

• No double counting: Ensuring that the same emission reduction is not claimed by multiple entities.

• Robust quantification: Accurate measurement and verification of emissions reductions.

• Sustainable development benefits: Contributing to broader environmental and social goals.

Cawa simplifies the process of selecting high-integrity carbon offset projects by offering a curated portfolio aligned with these principles (see our Projects page). For a deeper understanding of how to integrate carbon credits into your sustainability strategy, refer to our blog post: How to Incorporate Carbon Credits into Your Sustainability Strategy.

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Start compensating your carbon emissions with Cawa

Offsetting emissions independently can be complex. You’d need to vet projects all over the world, purchase credits from these projects, and ensure transparent reporting. Cawa simplifies this.

Unlike traditional carbon credit traders, Cawa offers direct access to thoroughly vetted, high-quality carbon removal projects - from afforestation to cutting-edge solutions like biochar and direct air capture. Every project meets rigorous standards such as Gold Standard, Verra, and Puro.earth, and aligns with the ICROA-endorsed methodologies.

With Cawa, you get full traceability of your contributions, data ready for CSRD compliance, and the ability to integrate offsetting directly into your workflows via APIs - enabling climate action that’s both impactful and accountable.

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Frequently asked questions about carbon offsetting

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What is carbon offsetting?

Carbon offsetting is the practice of compensating for your emissions by funding activities that reduce or remove carbon from the atmosphere, such as planting trees or investing in a biochar project.

It’s not a silver bullet, but when combined with internal reduction efforts, it’s a powerful step toward net-zero.

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What is the difference between carbon offsets and carbon credits?

• Carbon offsets refer to actions or projects that reduce carbon elsewhere.

• Carbon credits are the certified units representing these reductions - typically one ton of CO₂ per credit. Credits can be purchased and retired to balance your own emissions footprint.

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What are the benefits of carbon offsetting?

• Helps meet ESG and climate goals

• Builds a trusted brand

• Can lead to competitive differentiation in your industry

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“In 2024, 71% of C-suite leaders believe ESG investment is a competitive advantage.” – Reuters

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Conclusion

Knowing how to offset carbon emissions is an essential part of building a credible and future-focused sustainability strategy. It starts with accurately calculating your emissions across Scopes 1, 2, and 3, then setting meaningful reduction targets - ideally aligned with frameworks like the Science Based Targets initiative (SBTi) and guided by principles from VCMI and the Core Carbon Principles.

Once you’ve reduced what you can, high-quality carbon credits can help compensate for what’s left - especially when those credits are verified to the highest standards.

With Cawa, you don’t have to figure it out on your own. We offer the tools, guidance, and portfolio of trusted carbon offset projects that make your efforts both measurable and impactful. Whether you’re early in your net-zero journey or refining a mature climate strategy, we’re here to support your progress every step of the way.

Interested to learn more? Book a call with one of our carbon removal experts here.