A carbon credit is a certificate or permit representing the right to emit one tonne of carbon dioxide (CO2). They were introduced when regulations came into force to reduce the amount of CO2 emitted by companies in the UK and elsewhere in the world. Where a company could not meet its CO2 obligations, it could purchase a carbon credit enabling it to emit more CO2 than it should.
In the cases we have come across, investors were advised by an advisor (whether regulated or not) to invest monies (whether through a pension or otherwise) into carbon credits. In return they could then sell their credits on the open market. Many investors were advised to purchase carbon credits as part of their investment/pension portfolio with the intention that this would increase their retirement pot. However, these people should never have been sold this type of investment. Many investors have reported that they can’t sell or trade their carbon credits and so can’t realise any of their investment and/or make a profit.