What are Stacked Credits
At The ESG Institute, we believe that advancing sustainability starts with understanding the language that shapes it. Our "ESG Terms" series breaks down complex, often overlooked concepts in sustainability and Environmental, Social, and Governance (ESG) reporting—so you can stay informed, inspired, and one step ahead in your journey toward responsible business.
What are Stacked Credits?
🔺 Stacked Credits are multiple types of environmental credits—such as carbon, biodiversity, water, or social impact—generated from a single project or parcel of land. These credits are “stacked” to reflect the different ecosystem services a project provides and can potentially be sold to separate buyers.
🔺 Why It Matters: Many nature-based projects deliver more than one type of environmental benefit. Stacked Credits recognize the full value of ecosystem services, helping projects unlock diverse revenue streams and attract broader investor interest. But they also raise concerns about double-counting, market transparency, and credit integrity—especially in voluntary carbon markets.
🔺 Example: A wetland restoration project could generate:
🌳 Carbon Credit – For for blue carbon sequestration
🐦 Biodiversity Credit – For preserving endangered species' habitat
💧 Water Credit – For reducing agricultural runoff
👥 Social Impact Credit – For improving local livelihoods
If each service is independently measured, verified, and transparently disclosed, these credits can be responsibly stacked and sold to different buyers.
🔺 Did You Know?: While some registries like Gold Standard allow forms of credit stacking under strict conditions, others restrict or require bundling to prevent greenwashing and over-claiming. The growing complexity of these markets is driving calls for stronger guidance and harmonized rules across ecosystem crediting frameworks.
🚀 Follow The ESG Institute today for expert insights, news, and training in sustainability.
The ESG Institute helps your business or organization adopt and integrate Environment, Social, and Governance principles into your core practices, by offering clear guidance and delivering the best market tools and products directly to you., reach out to us today.
