The Role of Carbon Credits in Enhancing Company Profitability

Abstract

The increasing global emphasis on sustainability and climate change mitigation has led to the emergence of carbon credits as a strategic financial and environmental tool. This study explores the role of carbon credits in enhancing company profitability, focusing on how their integration into corporate sustainability strategies can lead to both cost savings and revenue generation. Through a mixed-methods approach combining financial performance analysis and case studies of firms across sectors such as manufacturing, energy, and technology, the research reveals that companies engaging in carbon credit trading and emission reduction projects can improve operational efficiency, access new markets, and strengthen brand value. Furthermore, the study highlights the importance of regulatory frameworks, carbon pricing mechanisms, and voluntary carbon markets in shaping corporate decisions. The findings suggest that carbon credits are not merely a compliance requirement but a viable financial instrument for achieving long-term profitability and competitiveness in a low-carbon economy.