Purpose This paper examines how sustainable entrepreneurship can be effectively supported in achieving its sustainability objectives by exploring the role of carbon credits. In particular, it investigates how carbon credits enable entrepreneurial firms to overcome financial constraints and translate sustainability ambitions into measurable and operational outcomes. Design/methodology/approach The study adopts a qualitative single-case design, examining WONDERBAG, a South African sustainable startup that strategically embeds carbon credits within its business strategy to support affordability, financial stability and impact verification. Findings The results show that carbon credits act as a multidimensional enabler of sustainable entrepreneurship through three interrelated mechanisms: performance-based revenue generation, liquidity and risk stabilization and organizational structuring and accountability. These mechanisms support capital access, enhance financial predictability and embed impact verification within organizational practices, enabling measurable environmental and social outcomes. Originality/value The paper provides a mechanism-based explanation of carbon credits as firm-level strategic resources, extending research at the intersection of sustainable entrepreneurship and carbon finance by showing how financial instrument design shapes the operational implementation of sustainability ambitions.
Pietronudo et al. (Tue,) studied this question.