Place baby carrots in a pot or deep skillet with about 1/2 an inch of water in the bottom. Sprinkle with sugar, salt, and pepper.
Bring water to a boil, cover and reduce heat to a simmer. Cook carrots for about 10 minutes.
Remove lid and increase heat to medium-high. Cook until liquid in the bottom reduces about half, 5 minutes.
Stir carrots in the sauce and serve. Garnish with fresh thyme if desired.