Carbon offsets are tradable credits from specific climate mitigation projects or activities, each offset representing one ton of carbon dioxide equivalent. Offsets are issued based on adherence to a protocol specific to the project type, and tracked through a dedicated registry. Credits are used by the purchasing entity to offset the impact of unavoidable or otherwise unmitigated emissions. The voluntary carbon market sets standards and tracks activities for offsets created and purchased by unmandated entities, from individuals to corporations to colleges and universities (Carbon Markets & Offsets Guidance, Second Nature, 2025). 

Penn purchases carbon offsets as a tool to meet its institutional goal of reaching 100% carbon neutral emissions by 2042. The University employs this strategy specifically for emissions it cannot currently eliminate, such as air travel and purchased steam. For Penn, offsets are a supplement to direct emission reductions from measures such as building efficiency upgrades and renewable energy procurement, rather than a primary strategy. Penn considers offset purchases only when other mitigation options are not viable and seeks high quality projects that meet external standards. 

Identifying quality offset projects is challenging and Penn continually strives to improve our understanding of carbon offsets to help ensure our investments result in carbon reductions. Penn’s offset purchasing policy requires that all projects must, at a minimum, adhere to Second Nature’s Carbon Markets and Offset Guidance. Additionally, when reasonable, preference is given to projects that are regional to Penn. Furthermore, Penn seeks to purchase offsets that have a BBB rating or higher from the independent rating agency Calyx Global. Penn uses Calyx Global’s science‑based carbon credit evaluations to ensure that selected projects meet our quality standards. 

For FY24 and FY25 air travel offset purchases, Penn partnered with CNaught, a company that facilitated the purchase of projects that were selected by Penn’s Carbon Offset Working Group and met Penn’s offset guidelines. CNaught provided Penn with a public Impact Dashboard to showcase the scale and type of carbon offsets that the university has purchased.

In July 2020, Penn enacted its Commitment to Travel Sustainability Policy 2371 to foster sustainable travel practices in support of the University’s carbon neutrality commitment. This policy led to the development of the Air Travel Carbon Offset Program – to offset the carbon impact of air travel.  Using Penn’s systems to collect air travel data, a carbon offset investment charge – the Climate Impact Offset or “CLIO” – is applied to University air travel and is used to fund investments in verified initiatives to offset the carbon impact made by those travel estimates. CLIO applies a fee to all University-funded air travel, which is used to purchase carbon offsets for those flight emissions.  Since FY21, the funds collected through the CLIO program had supported projects to offset over 24,000 MTCDE. Read more about Penn’s Travel Sustainability Program on Penn Procurement’s website.  

Many systems on Penn’s campus are supplied by a district energy steam system. Penn’s steam offsets program is a long-running initiative in which the University purchases carbon offsets to compensate for greenhouse gas emissions from the steam it buys to heat and cool campus buildings. This steam is generated off campus and purchased by Penn, so the associated emissions are counted as part of the University’s scope 2 emissions. 

• Penn has supported landfill gas and methane abatement projects in Virginia, Missouri, and Oklahoma. These projects capture methane that would otherwise escape from landfills or orphaned wells.
• The first investment from Penn’s Travel Sustainability Fund was in a nitrous oxide (N2O) abatement project at Ascend Performance Materials. The fund helped finance equipment to expand and upgrade the capabilities for destroying N2O. This project aimed to destroy or eliminate a sufficient amount of nitrous oxide produced during the manufacturing of adipic acid.