As the world moves toward sustainability and green investing, carbon credits have emerged as one of the most talked-about financial instruments. A carbon credit represents the right to emit one metric ton of carbon dioxide (CO₂) or its equivalent greenhouse gases. Companies that reduce emissions below their allowed limit can sell these extra credits to others. In simple terms, carbon credits transform carbon reduction into a tradable asset, enabling companies to meet their environmental targets while offering investors an opportunity to participate in the global green transition.