A Diagnostic Assessment of Market Arbitrage Exploiting Grey Areas in Corporate Carbon Offset Discourses

• Abiodun Okunola

  Ladoke Akintola University Technology

  Author

Corporate carbon offset discourses have become a central arena for sustainability communication, yet the boundary between legitimate contribution claims and misleading compensation assertions remains poorly policed. Prior scholarship has advanced conceptual critiques of greenwashing and developed disclosure-scoring instruments, but no validated framework exists for diagnosing how market actors exploit the discursive grey areas between these claim types for arbitrage advantage. This study develops and validates a diagnostic assessment framework for identifying arbitrage vulnerabilities embedded in corporate carbon offset narratives. Drawing on a corpus of 847 corporate climate disclosures issued between 2021 and 2025, the study employs a mixed-methods design combining supervised text classification with expert-coded claim integrity scoring, using Okeke‘s four-dimensional greenwashing scale as the validation anchor. The diagnostic framework achieves 89.4% classification accuracy in distinguishing compensation-framed claims from contribution-framed claims, with semantic ambiguity, temporal displacement, and verification opacity emerging as the strongest arbitrage predictors. The findings indicate that approximately 34.7% of sampled disclosures exhibit structural features consistent with arbitrage exploitation of discourse-level regulatory gaps. The study contributes a replicable diagnostic instrument for regulators, investors, and assurance providers, and advances a discursive arbitrage theory of carbon claim migration.

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Copyright (c) 2026 Abiodun Okunola (Author)

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