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Carbon Markets Are Broken - But Banks Are Betting They Can Fix Them
As carbon markets face mounting criticism over credibility and complexity, major financial institutions are stepping in to impose structure and standards. A leading voice in sustainable finance argues that the voluntary carbon credit market is at a turning point - and that with the right reforms, it can evolve from fragmented chaos into a credible, scalable tool for global decarbonization.
May 12, 2025
Thea Holland, Conference Producer, Center for Financial Professionals
Tags:
ESG and Climate Risk
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The views and opinions expressed in this content are those of the thought leader as an individual and are not attributed to CeFPro or any other organization
- Voluntary carbon markets are under pressure due to inconsistent standards, limited oversight, and reputational risks, prompting calls for greater transparency and accountability.
- Financial institutions are responding with improved governance, standardization efforts, and frameworks like the Core Carbon Principles to define high-quality credits and restore market credibility.
- For carbon markets to support the energy transition effectively, they must scale dramatically from billions to trillions, with carbon removals expected to grow as pricing mechanisms and market structures mature.
- As regulation, audit practices, and disclosure requirements advance, voluntary carbon credits are increasingly expected to function like commodities, bringing comparability and trust critical for investor confidence.
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