Spotify, the world’s largest audio streaming platform, recently shared its financial results for the first quarter of 2025. Alongside its business growth, the company continues to make progress on its environmental goals.
This article reviews Spotify’s recent financial performance and highlights its actions to reduce carbon emissions toward net zero and tackle climate change.
Spotify Hits the High Notes in Q1 2025
Spotify delivered solid results in the first three months of 2025. The company’s revenue grew 15% year-over-year, reaching €4.190 billion (~$4.52 billion USD).
Subscription revenue made up most of this amount, rising 16% to €3.771 billion. Meanwhile, ad-supported revenue grew 8% to €419 million. This marks steady growth in both user subscriptions and the advertising business.
The platform now has 678 million monthly active users (MAUs), up 10% from a year ago. Of these, 268 million are premium subscribers, showing a 12% increase. Spotify’s growth is driven by higher user engagement, expanding content offerings, and stronger advertiser demand.
Spotify also saw an improvement in profitability. Its gross margin rose to 31.6%, up from 27.6% last year. The company reported €509 million in operating income, a 203% increase from the previous year. Spotify credited efficiency efforts and lower marketing costs for this positive shift.
Looking ahead, Spotify forecasts MAUs to reach 689 million and premium subscribers to hit 273 million by the end of Q2 2025. The company expects Q2 revenue to be about €4.1 billion (~$4.43 billion USD) and aims for continued margin improvement.
Spotify’s Net Zero and Climate Goals
While Spotify is focused on business growth, it also works to reduce its environmental footprint. The company has set a target to achieve net-zero greenhouse gas (GHG) emissions by 2030. This commitment covers emissions from Spotify’s operations (Scope 1 and 2) and its value chain (Scope 3).
Spotify’s climate strategy has three main parts: reducing emissions, using renewable energy, and supporting carbon removal.
Turning Down the Carbon Volume
Spotify tracks its emissions each year. In 2024, its total GHG emissions were 195,027 metric tons of CO₂ equivalent (MTCO₂e).
About 98% of these emissions came from its value chain — mostly from cloud services, advertising, marketing, and commuting. Only 2% came from direct operations like office energy use.
To reduce emissions, Spotify focuses on:
- Optimizing its use of cloud computing services to lower energy demand
- Reducing the impact of corporate travel and in-person events
- Engaging suppliers to encourage lower-carbon practices
- Improving energy efficiency at offices and data centers
Spotify aims to cut its Scope 1, 2, and 3 emissions by 50% by 2030 compared to a 2020 baseline.
For example, Spotify is working closely with major cloud providers to ensure their data centers use renewable energy. Streaming services rely heavily on data centers, so making this shift is key to cutting overall emissions.
Spotify also encourages advertising and content partners to measure and reduce their own footprints, helping reduce indirect impacts.
Streaming on Sunshine: 100% Renewables
The streaming giant powers 100% of its direct operations with renewable electricity. This means all offices, owned equipment, and data center activities under Spotify’s control use renewable energy. The company buys renewable energy credits (RECs) to match its electricity consumption in all locations.
Spotify also pushes for more renewable energy in the cloud services it uses. For instance, by working with cloud providers that are shifting toward wind and solar power, Spotify ensures that the infrastructure behind music streaming stays green.
In addition to electricity, Spotify continues to assess ways to lower emissions from heating, cooling, and commuting at its offices worldwide. Its goal is to use energy smartly at every level of the business.
Balancing the Beat with Carbon Removal
Even with the best efforts to cut emissions, Spotify knows that some emissions are hard to eliminate. To balance these unavoidable emissions, the company supports high-quality carbon removal projects. This is a key part of Spotify’s strategy of reaching net zero.
The streaming firm has bought verified carbon credits to offset part of its footprint, but it’s now focusing on carbon removals rather than offsets. The company carefully selects carbon removal projects that meet strict standards for durability, transparency, and independent verification.
Spotify invests in a mix of nature-based and technology-based carbon removal methods. The variety of these projects includes reforestation and afforestation projects that plant and maintain forests to absorb CO₂ from the air.
Additionally, Spotify looks for carbon removal projects that bring co-benefits. These include protecting biodiversity, supporting local communities, and improving air and water quality. This aligns with Spotify’s broader values around social impact and equity.
Keeping It Transparent: Reporting and Accountability
Spotify follows leading climate reporting frameworks. It aligns its disclosures with the Greenhouse Gas Protocol and uses third-party verification for its emissions data. The company also reports through CDP (formerly Carbon Disclosure Project) and supports the Science Based Targets initiative (SBTi).
Spotify’s annual Equity and Impact Report shares updates on climate goals, emissions data, and progress on key actions. Transparency is a central part of the company’s sustainability approach.
The Climate Champions Network
Spotify runs an internal Climate Champions network made up of employees who help reduce the company’s impact on the environment. These Climate Champions work in different ways. Some join formal working groups and leadership circles, while others are part of smaller project teams that create and lead grassroots projects.
Their main goal is to encourage their coworkers to make choices that are better for the climate. Climate Champions from different parts of the company meet regularly to share ideas, experiences, and tips that help everyone improve their climate efforts.
Encore: Profits and Planet in Harmony
Spotify acknowledges challenges in reaching net zero. Much of its emissions come from areas it does not directly control, such as cloud providers and advertising partners. Reducing these Scope 3 emissions requires strong collaboration across the value chain.
Another challenge is measuring the emissions tied to users streaming audio content. While user listening itself has a small footprint, the data storage and transfer behind it can be energy-intensive. Spotify is exploring ways to better understand and lower these indirect impacts.
Looking forward, Spotify will continue to:
- Engage suppliers and partners to improve sustainability practices
- Invest in new carbon removal technologies and scale nature-based projects
- Increase renewable energy use throughout its cloud supply chain
- Develop better tools to track and manage emissions from streaming activity
- Share regular updates on progress toward its 2030 net-zero goal
Spotify’s Q1 2025 results show strong financial performance, with rising users, revenue, and profitability. At the same time, the company stays committed to cutting carbon emissions and advancing climate action. By focusing on clean energy, reducing value chain emissions, and supporting carbon removal, Spotify aims to align its business with a sustainable future.
The post Spotify Strikes a Chord: Big Q1 Gains and Bigger Climate Goals appeared first on Carbon Credits.
The accounting differences that decide whether your nature investment shows up in inventory, in BVCM, or nowhere at all.
The question reaches a procurement team about three weeks before the next sustainability committee meeting. Someone has read about insetting. Someone else has just signed off on an offset purchase. The CSO wants to know if the two are interchangeable. The answer is no, and the GHG Protocol Land Sector and Removals Standard is the reason why.
This article walks through what each term means at audit-grade specificity, what the standards actually say about how each gets counted, and how to decide which tool fits which target. The insetting vs offsetting question is one of the most-searched in corporate climate strategy, and one of the most poorly answered. By the end of this piece, you should be able to brief a committee on the difference without notes.
The two definitions, in plain English
Offsetting means buying carbon credits generated outside your value chain and retiring them against your residual emissions. The reduction happens somewhere else, financed by you, and the credit is the receipt.
Insetting means investing in emission reductions or removals inside your own value chain, typically with suppliers, where the reduction is directly linked to the products and services you buy. The reduction happens inside the boundary of your Scope 3 inventory, and the accounting treatment is fundamentally different.
The shorthand from the University of Oxford’s Nature-based Insetting Initiative is useful: insetting is what you do with the supply chain you have; offsetting is what you do with the supply chain you do not have.
What the GHG Protocol Land Sector Standard actually says
The GHG Protocol Land Sector and Removals Standard, finalised in 2024 after a multi-year pilot, sets the rules for how land-based emission reductions and removals enter corporate inventories. The Standard distinguishes between inventory accounting (Scope 1, 2, and 3) and project or intervention accounting (a separate methodology for crediting).
For insetting, the practical implication is that supplier-level interventions, when properly measured and attributed, can reduce your Scope 3 category 1 (purchased goods and services) emissions in your inventory. The reduction is not a credit retired against the inventory; it is a lower inventory number, period.
For offsetting, the credit is retired separately. It can be reported as a contribution toward a net-zero claim under the SBTi Beyond Value Chain Mitigation framework or as part of a VCMI Carbon Integrity claim, but it does not lower the inventory number.
A practical consequence: if your Science Based Target requires a 50% absolute reduction in Scope 3 emissions by 2030, insetting moves you toward the target. Offsetting does not. This single point of difference reshapes the procurement decision.
When insetting counts toward Scope 3 (and when it does not)
Insetting counts toward Scope 3 only when several conditions are met:
- The intervention must occur with an entity in your value chain.
- The emissions reduction or removal must be measured against a defensible baseline.
- The reduction must be attributed to your share of that supplier’s output, not double-counted with other buyers.
- It must follow the inventory accounting rules in the GHG Protocol Land Sector Standard, not the project accounting rules used to generate credits.
The most common failure mode is double counting. If your supplier sells the same reduction as a credit on the voluntary market and also reports it to you as a Scope 3 reduction, the math breaks. The Standard requires you to address this risk, typically by purchasing and retiring the supplier-issued credit as part of your inventory or by contractual provisions that prevent the supplier from selling the reduction twice.
When insetting does not count toward Scope 3: when the intervention sits with a supplier you do not buy from, when the baseline is not defensible, when the attribution is unclear, or when the documentation does not survive audit. Those cases default to Beyond Value Chain Mitigation, which is still useful but operates on a different ledger.
The procurement and supplier engagement question
Insetting is harder than offsetting. That is the unfashionable truth most buyers eventually confront. Offsetting is a transaction; insetting is a relationship.
To run an insetting program, you need supplier mapping precise enough to know which farms or facilities sit at which Scope 3 boundary. You need an engagement model that gets suppliers to participate, which usually requires multi-year commitments and shared economics. You need an MRV architecture that measures the right things and produces audit-ready documentation. And you need a contractual structure that prevents double counting and protects both sides.
The trade-off you receive in return is significant. Reductions count against your inventory rather than your residual. Supplier relationships deepen, which protects sourcing continuity. Yield and quality improvements often follow regenerative interventions, which reduces your input cost over time. And the regulatory file, under CSRD, CSDDD, EUDR, and the SBTi FLAG Guidance, is materially stronger.
Choosing the right tool for the right target
A practical decision rule. If your target is a science-based Scope 3 reduction and you operate in a FLAG sector or source FLAG commodities, insetting is the structurally correct tool. If your target is a net-zero claim that includes neutralising hard-to-abate residual emissions outside your value chain, BVCM via high-integrity offsets is the structurally correct tool. Most companies with material Scope 3 exposure need both, in different proportions, sequenced over time.
The sequencing matters. Insetting takes longer to stand up but produces a permanent reduction in the inventory. Offsetting can be transacted faster but does not change the inventory and now sits under tighter claim restrictions. Treat them as complementary tools with different jobs, not as substitutes. The Accountability Framework Initiative and the IUCN Global Standard for Nature-based Solutions both provide useful guardrails for the insetting side, with biodiversity, human rights, and benefit-sharing requirements that go beyond carbon math.
If you are mapping a Scope 3 reduction roadmap and need to scope which interventions count toward your inventory versus which sit in Beyond Value Chain Mitigation, the carbon and sustainability experts at Carbon Credit Capital can help you structure a nature-based supply chain investment program that fits your FLAG exposure, your target architecture, and your audit horizon. Schedule a consultation.
Net zero is often described as a balancing act: cut what you can, account for the rest, and reach zero on the ledger. That framing is useful, but it leaves something out. It treats every tonne of carbon as interchangeable and every route to zero as equally sound, while the science tells a more specific story.
Malawi has lost a striking share of its forests over the past three decades. Woodlands that once covered well over a third of the country now cover less than a quarter, and the pressure on what remains is increasing. Behind those figures sit two practical questions: what is driving the loss, and what reverses it?
-
Climate Change1 year ago
Guest post: Why China is still building new coal – and when it might stop
-
Greenhouse Gases1 year ago
Guest post: Why China is still building new coal – and when it might stop
-
Greenhouse Gases2 years ago嘉宾来稿：满足中国增长的用电需求 光伏加储能“比新建煤电更实惠”
-
Climate Change2 years ago嘉宾来稿：满足中国增长的用电需求 光伏加储能“比新建煤电更实惠”
-
Climate Change2 years ago
Bill Discounting Climate Change in Florida’s Energy Policy Awaits DeSantis’ Approval
-
Renewable Energy10 months agoSending Progressive Philanthropist George Soros to Prison?
-
Greenhouse Gases1 year ago
嘉宾来稿：探究火山喷发如何影响气候预测
-
Carbon Footprint2 years agoUS SEC’s Climate Disclosure Rules Spur Renewed Interest in Carbon Credits