By
Director of Climate Science & Impact
Edited: 23 Sept 2025
20 min read
This guide explains how businesses can strengthen their climate strategy by aligning carbon offsetting with the Oxford Principles, the science-led framework for credible net-zero pathways.
Credible corporate climate strategies are not just a moral imperative - they’re a business necessity.
When done well, they unlock commercial value - from stronger brand trust to investor confidence and supply chain resilience. Conversely, with climate disclosure regulations now mandatory across major markets and ESG-driven procurement decisions impacting contract awards, poorly executed carbon strategies represent material business risk - from failure to secure capital, to outright accusations of greenwashing.
Ecologi’s three Rs of climate leadership - Reduce, Restore, and Report - offer a practical framework. The Restore step includes supporting global restoration efforts, including through high-integrity carbon credits - in line with guidance from the Science-Based Targets initiative and Oxford Net Zero (Axelsson et al, 2024; SBTi, 2024).
But the era of cheap, low-quality offsetting is over. Buying the lowest-cost credits and claiming climate leadership risks greenwashing. Today, investors, regulators, and the public demand a more strategic, credible approach to offsetting that delivers real climate impact (Deloitte, 2024).
The Oxford Principles for Net Zero Aligned Carbon Offsetting offer a robust, science-based path forward. This article explores how to apply them - and how doing so can create cascading benefits for your business.
Business benefits of the Oxford Principles
The climate crisis presents multiple business risks - so having a robust and carefully-considered strategy for funding projects around the world is an appropriate corporate response.
Climate risk is financial risk
Disruption from climate change, biodiversity loss, and ecosystem collapse increasingly affects your supply chains, customers, insurance costs, and investment risk (TCFD, 2017; McKinsey, 2020). It’s in your interest to prevent as much of this disruption as possible - and that means finding and funding the right projects, in the right way.
Your net-zero strategy is under scrutiny
Investors, regulators, and industry standards bodies like the Science Based Targets initiative are raising the bar on what counts as credible climate leadership, including the funding of climate projects outside the value chain and how exactly that should be done (Axelsson et al, 2024; SBTi, 2024). Offsetting that is aligned with the Oxford Principles has become a core expectation for a credible corporate net-zero strategy - it is not just a ‘nice-to-have’. Leading organisations and standards bodies are already producing guidance which endorses or references the Oxford Principles - including the UKGBC and the We Mean Business Coalition.
Stakeholders want impact, not greenwashing
Employees, consumers, and clients are looking for companies that go beyond poor-quality offsetting, and demonstrate real impacts, for people and planet (Deloitte, 2024). Historically, criticism of low-impact offsetting strategies has been prompted by businesses exploiting extremely cheap, low-quality voluntary carbon credits - but this corner-cutting only produces greater risk: of being called out for greenwashing, or being fined for misleading claims. You can demonstrate leadership to your stakeholders by building an Oxford-aligned strategy that is credible, transparent, and science-aligned.
There’s a competitive edge to high-integrity sustainability strategies
Businesses that lead in climate action build stronger reputations, win customer trust, attract top talent, and stay ahead of regulation and market shifts (UN Global Compact, 2023; Deloitte, 2024). The vast majority of business leaders already agree that delivering on sustainability goals is critical to future business success. If you can be an early adopter in high-quality removal credits, you’ll demonstrate differentiation as your competitors scramble to meet evolving standards in the coming years. That means an Oxford Principles-aligned strategy positions your business as a preferred partner for ESG-focused clients and investors. Our recent Ecologi Climate Commitments Survey showed that this strategic importance is further evidenced by the 72% of businesses that have set sustainability targets (a 9% YoY increase) and the tangible benefits they report, including: Improved brand image (43%), Increased productivity/innovation (40%), Attracting more eco-conscious customers (39%), Employee loyalty and/or motivation (35%) and importantly Increased revenue or market share (33%, an 11% YoY jump).
All this means that when it comes to buying carbon credits, your business can afford no half-measures. This is where the Oxford Principles for Net Zero Aligned Carbon Offsetting (the ‘Oxford Principles’) come in. Created by leading climate experts at the University of Oxford, they provide the leading evidence-based framework for what credible offsetting looks like. Aligning with the Oxford Principles strengthens your climate strategy and minimises risks to your businesses by ensuring your actions are fully-aligned with global best practice
In this article, we’ll break down what the Oxford Principles mean in practice, and why they matter for your sustainability strategy. You’ll see a practical example of an Oxford-aligned portfolio and get an inside look at how an Ecologi customer is putting these principles to work today.
First though, let’s start with the basics.
What are the Oxford Principles for carbon offsetting?
Up until a few years ago, there was little consensus on what “good” carbon offsetting looked like. Many businesses bought the cheapest credits available - often from projects with weak safeguards or short-lived climate benefits. As net-zero has become a global standard, and visibility and understanding of carbon project quality has skyrocketed, the need for businesses to ensure their climate strategy meets best practice has risen as well.
First published in 2020 and revised in 2024, the Oxford Principles were published by an expert team at the University of Oxford to provide a science-based steer for businesses to ensure that the offsetting they carry out truly delivers impact and paves the way to net-zero. Importantly, tonne-for-tonne offsetting is never to be used as a substitute for directly reducing emissions, but is a separate part of the journey, critical in its own right.
There are four Oxford Principles (adapted from Axelsson et al, 2024):
Cut emissions, ensure the environmental integrity of credits used to achieve net zero, and regularly revise your offsetting strategy as best practice evolves
The first Principle is made up of three components:
1A. Prioritise reducing your direct and indirect emissions.
1B. Ensure the integrity of carbon credits.
1C. Maintain transparency.
This means businesses should always work to address emissions within their own operations and supply chains before turning to carbon credits - and that when they do, they should ensure that the credits they buy are high-quality, and that their portfolio dynamically follows the latest best practice..
That’s why in Ecologi’s three Rs of climate leadership we talk about Reduce first, and it’s why the SBTi’s guidance on Beyond Value Chain Mitigation (BVCM) assumes that you have already set Science-based Targets for emissions reduction. The funding of high-quality projects outside the value chain to accelerate climate action on a global scale is a necessary component of your strategy: but it must never replace direct decarbonisation within the value chain.
Transition to carbon removal offsetting for any residual emissions by the global net zero target date
The vast majority of carbon credits on the market today are issued to projects which are reducing or avoiding emissions - like preventing deforestation. These kinds of projects are really important (see IPCC, 2022), though the Oxford Principles (as we will see in the fourth Principle) are quick to point out that nature conservation and restoration should be funded regardless of whether they are being issued with carbon credits.
To that end, the tonne-for-tonne component of your portfolio should progress over time toward carbon removals as you progress toward your corporate net-zero date, and we collectively progress toward the global net-zero date (2050 at the latest). This is because to achieve net-zero, we also need to scale the removal of CO₂ which has already been emitted to the atmosphere.
The reason the transition is gradual is because the carbon removal market is nascent, carbon removal is very expensive and in short supply, and will only be able to scale so much. So this gradual ramping up will allow the scaling of the carbon removal market simultaneously with the reduction of emissions across the economy.
Nevertheless, there is a critical business need to plan for carbon removal transitions immediately - because market dynamics are projected to place a huge squeeze on high-quality credits in 2030 and beyond. That means your business needs to act now to secure (through forward contracts and offtake agreements) supply that you’re going to need in the future. This will not only side-step any availability issues, but will also likely provide cheaper unit costs as well.
👉 Learn the difference between carbon avoidance and carbon removal.
Shift to removals with durable storage (low risk of reversal) to compensate any residual emissions by the net zero target date
When we remove CO₂ from the atmosphere, the stored carbon (C) has to go somewhere. This Principle makes it clear that over time (towards the global net-zero date), businesses must tend towards carbon removal credits where the carbon removed is locked away for the long term.
Over time then, companies should favour projects with longer storage durations that have a high chance of keeping the carbon out of the atmosphere for centuries (such as biochar production) or millennia (such as enhanced rock weathering). Again, the business need here is acute: the requirement for durable carbon storage will significantly limit your options for purchasing credits - so the earlier you can get your partnership agreements in place, the lower the risk you are caught short in a couple of years’ time.
Support the development of innovative and integrated approaches to achieving net zero
The final Principle is the most complicated, calling on businesses to fund the development and scaling of new removal technologies and facilitate the enabling conditions that will help expand the availability of robust, high-integrity net-zero solutions for the future.
This Principle is made up of four components:
4A. Use long-term agreements that are bankable and investable.
4B. De-risk project finance.
4C. Form sector-specific alliances to work collaboratively with industry peers to develop the market for projects aligned with net zero.
4D. Support the protection and restoration of a wide range of ecosystems in their own right.
4E. Adopt and publicise the Principles and incorporate them into regulation and standard-setting for net zero.
4F. Investing in additional Beyond Value Chain Mitigation (BVCM).
Notably, in Principle 4D above, the Principle also points out that businesses must support broader ecosystem restoration projects beyond just those that are issued carbon credits:
“While high-integrity ecosystem restoration projects usually store carbon, such efforts should also be supported for their social and environmental benefits, not solely for the purpose of compensating for ongoing emissions.”
(Axelsson et al, 2024)
This links neatly with Principle 4F on Beyond Value Chain Mitigation (BVCM), and fits together nicely with Goal #2 of the BVCM under the guidance of the Science-based Targets initiative (SBTi, 2024). You can read more about how to set a BVCM strategy, and how the Oxford Principles interplay with this, in our in-depth article here.
Together, these four Principles form a roadmap for building a tonne-for-tonne mitigation strategy that evolves alongside your internal decarbonisation efforts.
You can read the full, revised Oxford Principles here:
Oxford Principles for Net-Zero Aligned Carbon Offsetting (2024).
How to build an Oxford Principles-aligned portfolio
As we have seen, one of the most critical components of the Oxford Principles is that your carbon credit portfolio is dynamic and evolves over time. In particular, this requires increasing the proportion of the portfolio that is carbon removal, and increasing the proportion of the carbon removal that has long-term durability, as the net-zero date approaches.
That means that you can design your portfolio for 2025, but your portfolio in 2030 will be different - and it will be different again in 2035, and so on. So the important thing to do today is to establish the overarching commitment to an Oxford Principles-aligned approach, and plan out what that looks like right now, and what it could look like in the future. Remember that the first Principle also says to continually review your approach to align it with best practice - so there will always be some uncertainty as to the exact shape of the portfolio over longer time horizons.
Let’s map it out.
Suppose your company’s carbon footprint in 2025 was 5,000 tCO₂e. Here’s how you could structure your portfolio if you started with the reporting period for 2025, following the guidance of the Oxford Principles and working towards a 90% absolute emissions reduction between now and 2050.
We’ll take in snapshots each five years between now and your net-zero date:
Reporting Year | Total CO₂e | % Avoidance | Tonnes Avoided | Example Avoidance Projects | % Removals | Example Removals Projects | Tonnes Removed |
|---|---|---|---|---|---|---|---|
2025 | 5,000 | 90% ⬇ | 4,500 | High-quality forest protection, improved cookstoves, landfill gas capture, etc. | 10% ⬆ | Primarily ARR, regenerative farming, some durable (e.g. biochar, ERW) | 500 |
2030 | 4,000 | 70% ⬇ | 2,800 | High-quality forest protection, improved cookstoves, landfill gas capture, etc. | 30% ⬆ | Primarily ARR, regenerative farming, some durable (e.g. biochar, ERW) | 1,200 |
2035 | 3,000 | 50% ⬇ | 1,500 | High-quality forest protection, improved cookstoves, landfill gas capture, etc. | 50% ⬆ | Mix of durable (biochar, ERW) and nature-based removal (e.g. ARR) | 1,500 |
2040 | 2,000 | 30% ⬇ | 600 | High-quality forest protection, improved cookstoves, landfill gas capture, etc. | 70% ⬆ | Mix of durable (biochar, ERW) and nature-based removal (e.g. ARR) | 1,400 |
2045 | 1,000 | 10% ⬇ | 100 | High-quality forest protection, improved cookstoves, landfill gas capture, etc. | 90% ⬆ | Durable removal only (biochar, ERW, DACS) | 900 |
2050 | 500 | 0% | 0 | High-quality forest protection, improved cookstoves, landfill gas capture, etc. | 100% | Durable removal only (biochar, ERW, DACS) | 500 |
Notice that to be Oxford Principles-aligned also requires adherence to the significant reduction in emissions (in the second column in the table above). It is not enough to continually offset your emissions with increasing carbon removal if your annual emissions remain the same from now to 2050. The example above follows a 90% absolute reduction, in line with the SBTi’s Corporate Net-Zero Standard which requires (a minimum of) 90% reduction by the long-term target date.
The portfolio itself demonstrates a few key ideas in practice:
Short-term transition: In the early years, most of your tonne-for-tonne budget goes to high-quality avoidance credits, which are more available and lower cost. You start building a base of carbon removals alongside.
Mid-term transition: As you progress, and the market for carbon removals matures, you begin to dedicate a larger share of your portfolio to removals and reduce reliance on avoidance credits. At the same time, the proportion of durable removals (with carbon storage in centuries-to-millennia) increases.
Nearing the net-zero date: As you reach your net-zero date, you phase out avoidance credits entirely and focus your tonne-for-tonne portfolio on permanent carbon removals only.
By setting an approach which is Oxford Principles-aligned, you ensure your BVCM doesn’t just balance against your emissions today, but actively contributes to building the enabling conditions for global net-zero in the future.
Planning your Oxford Principles-aligned strategy
As we have seen, sticking to the Oxford Principles over the timescales needed is going to take some forward planning. You’ll need to be proactive in order to secure your strategy and mitigate commercial risk, and embed today the foundations for your mid-to-long term strategy for mitigating your commercial risk.
Here are some tips from our expert team:
Budget & CFO engagement
Your portfolio of projects is a long-term commitment. It’s possible to use cost projections to map out what you think you might need to spend in the future, and when, on your road to net-zero. Briefings for your CFO should include scenario planning for expected rises of 50-100% in the market rate for high-quality credits - which is going to require collaboration on hedging strategies and multi-year budget commitments.
Supply chain risk
If you’re already buying carbon credits, it’s possible that your current removal suppliers may not scale to meet 2035 demand. Therefore, diversifying your portfolio across a number of projects and suppliers is essential as part of your risk strategy.
Offtake agreements
This will allow you to secure upfront access to high-quality ex ante carbon removal credits. If you don’t secure supply ahead of time, you run the risk of needing to buy durable removal credits on the spot market in the future - which are projected to be 50-100% more expensive and in much lower supply. Forward contracting today mitigates price volatility in the future, while providing predictable ESG budget planning - which will be critical for multi-year financial forecasting.
Aligning with strategic initiatives
This might include looking to support projects in local geographies, supporting specific UN Sustainable Development Goals, project types that relate to your business model, and so on. Every company’s portfolio should be bespoke and dynamic.
Ensuring quality & integrity
At Ecologi, we recently published our Carbon Projects Assessment Framework which leverages our extensive in-house carbon markets expertise and synthesises it with Ecologi’s deep relationships with all four of the leading carbon credit ratings agencies - BeZero Carbon, Calyx Global, Renoster and Sylvera - as well as market intelligence from AlliedOffsets, geospatial analysis through Earth Blox and national-level risk indices. You don’t have to do this analysis all for yourself, if you opt to work with a trusted partner like Ecologi - which can significantly reduce the time cost of conducting due diligence on the projects you select.
Stakeholder engagement
Whether it’s your customers, investors, our employees - all of your company’s stakeholders want to know that you have a credible climate action strategy. Communicate how you are working to align with the Oxford Principles and report transparently on your portfolio and project outcomes at regular intervals. Quarterly portfolio updates demonstrate proactive management to investors whilst building customer confidence in your sustainability commitments.
Of course, the supply you need will evolve as your business reduces its emissions over time. Always revisit your offsetting plan annually to reflect your latest emissions data, market developments, evolutions in best practice, and new technologies.
Here’s a visual example of a portfolio breakdown by cost and project type over time:
Oxford Principles Case Study: Public Digital
In line with its commitment to environmental responsibility, Public Digital (PD) has been diligently measuring and reducing its carbon footprint for several years, achieving a reduction of 21%, from 969.07 tCO₂e (2023) to 764.27 tCO₂e (2024). For its residual emissions, it has partnered with Ecologi to acquire high-quality carbon credits. This year, PD took a significant step by aligning its offsetting strategy with the Oxford Principles for Net Zero Aligned Carbon Offsetting.
The Oxford Principles recommend a blended portfolio of avoidance & removal credits, with a shift toward carbon removal to achieve net-zero goals. To this end, PD invested 75% of its offsetting portfolio into high-quality carbon removal credits from the Delta Blue Carbon project in Pakistan. This initiative is a prime example of a nature-based removal solution, focusing on mangrove restoration and conservation, which actively pulls carbon dioxide from the atmosphere.
The remaining 25% of its portfolio went to Nature Based Carbon Avoidance credits, generated through the protection of forests in Paraguay. As PD continues to reduce its overall carbon footprint, its plan is to progressively increase the proportion of carbon removal credits in its portfolio. This strategic and forward-looking approach demonstrates how companies can responsibly manage their residual emissions while contributing to the development of a robust and necessary carbon removal market.
Oxford Principles Case Study: Bytes Technology Group
In line with its commitment to environmental responsibility, Bytes Technology Group’s two subsidiaries, Bytes Software Services and Phoenix Software, are taking significant steps to manage their residual emissions by investing in a diverse portfolio of high-quality carbon credits. This strategy aligns with the Oxford Principles for Net Zero, which recommend a blended portfolio of carbon avoidance and removal credits.
In the last reporting year Bytes Software Services has invested in high-integrity carbon removal projects - the Delta Blue Carbon mangrove restoration project in Pakistan and the Yarra Yarra Biodiversity Corridor in Australia, which actively remove carbon from the atmosphere, provide community benefits and increase biodiversity. Bytes invested in these to the value of their Scope 1 and 2 emissions, which comprise 4.4% of credits purchased. The remaining 95.6% were invested in projects that support community health and carbon avoidance through two impactful projects: the Mataven REDD+ project protecting vital rainforests in Colombia and the BURN Cookstoves initiative in Kenya, which reduces emissions while improving community health.
Phoenix Software reduced their Scope 1 and 2 emissions to zero in the last reporting year and so have taken an approach to cover a subset of scope 3 emissions through carbon removal credits. Phoenix has allocated a significant 20% of its portfolio to high-quality carbon removals. Crucially, these removal credits from the Delta Blue Carbon project are being used to specifically address the company's business travel emissions alongside some other scope 3 categories which will be particularly hard to abate. The remaining 80% of its portfolio supports the world-renowned Katingan REDD+ project, which prevents the emission of millions of tonnes of carbon by protecting vital peatland forests in Indonesia.
This strategic and forward-looking approach from Bytes Technology Group demonstrates how companies can responsibly manage their emissions today while helping to build the robust carbon removal market necessary for a true net-zero future.
Want to build an Oxford Principles-aligned offsetting strategy? Work with Ecologi
With the end of the year coming up, there is a pressing need to get ahead of the end-of-year rush which places upward pressure on carbon credit prices.
Actions to take today:
Schedule a portfolio assessment with our team before Q4 budget cycles - early 2026 removal capacity is increasingly pre-committed, limiting future options.
Secure a strategic advisory session to ensure your current strategy meets evolving regulatory requirements and stakeholder expectations.
At Ecologi, we support businesses with every step in their climate journey - and our experts can help you build a strategy that prioritises real emissions reduction alongside a credible, Oxford Principles-aligned offsetting portfolio.
Our platform makes it easy to track your progress, retire credits transparently, and communicate your climate contribution clearly.
Now is the time to evaluate your current portfolio to ensure it meets the Oxford Principles and is shoring up your business against risk. And with growing investor and regulatory scrutiny, a credible offsetting strategy isn’t just about risk management - it’s a key driver of long-term value and climate leadership.
Ecologi can help you build a robust, science-aligned offsetting plan that aligns with the Oxford Principles, stands up to scrutiny and supports your net-zero goals.
References
Axelsson, K., Wagner, A., Johnstone, I., Allen, M., Caldecott, B., Eyre, N., Fankhauser, S., Hale, T., Hepburn, C., Hickey, C., Khosla, R., Lezak, S., Mitchell-Larson, E., Malhi, Y., Seddon, N., Smith, A. & Smith, S.M. (2024). Oxford Principles for Net Zero Aligned Carbon Offsetting (Revised 2024). Oxford: Smith School of Enterprise and the Environment, University of Oxford
Deloitte (2024). The Sustainable Consumer: Understanding consumer attitudes to sustainability and sustainable behaviours. Available here.
IPCC (2022). Summary for Policymakers. In: Climate Change 2022: Mitigation of Climate Change. Contribution of Working Group III to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change. Cambridge University Press, Cambridge, UK and New York, NY, USA. DOI: https://doi.org/10.1017/9781009157926.001
McKinsey (2020). Climate risk and response: Physical hazards and socioeconomic impacts. Available here.
SBTi (2024). Above and Beyond: An SBTi report on the design and implementation of Beyond Value Chain Mitigation (BVCM). Version 1.0. Available here.
TCFD (2017). Final Report: Recommendations of the Task Force on Climate-related Financial Disclosures. Available: https://www.fsb-tcfd.org/publications
UN Global Compact (2023). Reimagining the agenda: Unlocking the global pathways to resilience, growth and sustainability for 2030. 12th UN Global Compact-Accenture CEO Study. Available here.