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Kristen Talman

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CFOs tap into carbon credit markets

Tapping into the carbon credits market appeals to CFOs looking to fund net-zero plans, figuring out the accounting may hold them back 

Carbon credits create accounting headaches

The IRA and ESG goals

The IRA is complex. Companies are leaning on their tax professionals to help with strategy. 

Companies look to tax professionals to realize ESG goals

Greenhushing

Greenwashing has turned to greenhushing as companies grow quiet on their environmental commitments. 

Environmental initiatives fly under the radar as companies fear backlash

The words environmental social governance are shown on a circle graph

Natasha Piñon

Optimism among small business owners in the US dropped 2 points in September, falling to 98.8 from 100.8 in August, according to the National Federation of Independent Business’s latest sentiment index.

September’s dip marked the first decline of its kind in three months, though the NFIB noted the optimism index “remains above the survey’s 52-year average of 98.” Amid the 

, investors, economists, and policymakers are turning to 

For a sense of how small business owners are feeling, supply chain woes and inflation concerns were some of their most pressing issues in September, per the report. Nearly two-thirds of respondents said 

 “were affecting their business to some degree.”

As a result, 31% of owners anticipated raising prices in the next three months, marking a 5 point increase from August, according to the NFIB.

“While most owners evaluate their own business as currently healthy, they are having to manage rising inflationary pressures, slower sales expectations, and ongoing labor market challenges,” Bill Dunkelberg, the NFIB’s chief economist, said in a statement.

Small business owners are also dealing with the elephant in every boardroom: 

. The NFIB’s uncertainty index for September climbed seven points, moving up to 100. That marked “the fourth-highest reading in over 51 years,” the organization noted.

“Although uncertainty is high, small business owners remain resilient as they seek to better understand how policy changes will impact their operations,” Dunkelberg said.

They’re not too confident about the immediate future, though: The share of small business owners expecting better business conditions dropped 11 points month over month to 23%.

Small business sentiment dipped in September

Around a third of small business owners expect to raise prices in the next three months, according to the National Federation of Independent Business. 

Jesse Klein

 on solar and wind projects, and just the general “

” around the climate movement since the election, one of the 

 has been what will happen in the voluntary carbon offset and removal market.

“The hard reality is, political landscapes have shifted a bit,” Peter Minor, CEO of Absolute Climate, told CFO Brew. “And some of these more nascent, riskier projects, it’s just harder to make them work today.”

 to achieve their climate goals, but they are facing some tough truths. The 

 engineered solutions and bargain-bin avoidance credits have proven disappointing—overly optimistic for the former, and either too difficult to measure or outright bogus for the latter.

So attention is shifting back to the one system that has sustained balance for millennia: nature-based removals, which include 

, which take advantage of naturally occurring systems to pull carbon dioxide out of the air.

For CFOs looking for carbon removal options, the answer might be “go look at trees.”

, or funding a project that prevents more carbon from being released into the atmosphere, have been used as an offsetting mechanism for companies in recent years. For example, a company may pay to protect a forest from logging, to avoid the potential emissions from burning and transporting the wood. These projects account for almost 75% of all credits available, according to research by carbon management firm Carbon Direct. But recent exposés have called into question the efficacy of those projects.

 by The Guardian into the verified carbon standard crediting organization, Verra, found that 94% of its rainforest credits offered no environmental benefit. Also in 2023, carbon offset project developer South Pole, ended a 

 (Reducing Emissions from Deforestation and Forest Degradation) in Zimbabwe that was supposed to prevent deforestation. The project had issued 36 million credits since 2011, but media reports raised doubts about how much forest was actually being preserved.

“There are avoidance projects that are really high quality, and there’s some that are really bad quality, and it’s really hard to tell the difference,” Minor said.

With avoidance projects, there are not only questions of efficacy, but also inherent difficulties quantifying impacts. They’re tough to evaluate because comparing the reality to a hypothetical situation where a project never intervened is a “counterfactual,” Minor said.

As a result, companies are shifting their focus from avoidance projects to those that are easier and more concrete to quantify, like negative emissions and emissions reductions, according to Minor.

It’s not just avoidance credits that are falling short. Tech-based carbon removals are turning out to be 

 and less effective than promised. These engineered solutions don’t seem to be delivering the needed results quickly enough, according to climate tech platform Patch’s CEO, Brennan Spellacy.

Engineered solutions like direct air capture use new technologies to pull CO2 out of the atmosphere. But they’re 

, and they’re currently pulling very little carbon out of the atmosphere. Carbon removal technologies are also a decades-long investment.

“They’re realizing that some of these technologies are taking longer to deploy than initially forecasted,” Spellacy said.

 With avoidance credits and tech-driven carbon removal proving ineffectual, companies are turning to 

Minor told CFO Brew that he’s seen demand for nature-based removals grow faster than for any other type of carbon credit. Research backs that up. Removals like reforestation, afforestation, and revegetation have been in highest demand; the former two rank as the second and third most requested by buyers, according to a Patch report on the state of the voluntary carbon market.

Patch also found that nature-based solutions, both removal and avoidance, make up seven of the top 20 most requested projects, while another seven are hybrid, including both technological and natural solutions working in tandem.

Companies still have carbon goals to meet so they’re turning to what’s available now at a good price.

Spellacy sees that as an opportunity for developers with nature-based removals in their portfolio to command a premium on projects that will deliver volume in 2025 and 2026. Nature-based carbon removal solutions are also easy for companies to access.

“Forestry is something that is available today. It’s available at scale,” Minor said. “We’re seeing an acceleration there, not just because it is higher quality now, but I think purely just because it’s there and they need something.”

0/18/25: This piece has been updated to reflect the correct name of the company Absolute Climate.

Nature-based carbon removals provide the right volume at the right price

What’s in, what’s out, and what to do.

You’ve heard about it a thousand times—the 

. But this time there might be an unexpected solution to the talent crunch.

While accounting as a career has seen—let’s be kind and say a 

 have become the cool new kids on the block. The answer to accounting’s popularity decline might be combining the two into a role that gives employees a sense of purpose.

And luckily there’s already a role that exists for which companies are 

, 90% of surveyed Gen Z and millennials said “having a sense of purpose is important to their overall job satisfaction and well-being.” Carbon accounting might be the way to bring that aspiration into the finance profession.

Instead of tracking dollars and cents, carbon accountants 

 and environmental impacts of business operations. But beyond that, according to Ian Thomson, professor of accounting and sustainability at the University of Dundee in Scotland, a carbon accountant’s role is to help businesses align their objectives with protecting the planet from even more harm. It allows them to 

 impacts, costs, and solutions that are excluded when companies only focus on money, he told CFO Brew.

“Financial accounting almost separates you as a human from other humans and from nature,” Thomson said. “When you start looking at greenhouse gas, you have to look at the connections.”

Thomson said he has “absolutely” seen an increased interest in carbon accounting among his students over the past few years, and credits the uptick with carbon accounting’s inherent purpose.

 And it’s not just accountants who’ve bought in on the hype of carbon accounting. Companies know they’ll need 

 from climate requirements during the second Trump administration, other stock exchanges and countries have not. Within the next few years, Brazil, China’s Shanghai Stock Exchange, the EU, Hong Kong Exchanges, New Zealand, the UK, the state of California, and more will all 

 to be disclosed in order to be listed or do business within its borders. And 

 now require companies vying for contracts over £5 million to have a 2050 net zero strategy.

“I think there’s a whole lot of these different pressures coming on that are tied to this investment,” Thomson said. “They’re tied to consumer boycotts. They’re tied to business relocation models, as [resources] are no longer there.”

Beyond regulations, financial institutions worry about climate change because of the risk of stranded assets. Thomson pointed to mines, oil wells, and farmland that could vanish as sea levels rise—even airports and 

 may end up underwater. Lenders don’t want to finance investments that may never yield a return. Carbon accountants can help avoid those bad investments.

Thomson expects sectors like insurance, agriculture, and transportation to be the first movers on hiring and taking advantage of carbon accountants.

“A lot of the problems that people are associating with carbon accounting, things like double counting, accounting has the solution,” Thomson said.

Accounting schools are starting to take notice. Many prestigious schools, even in the US, have added carbon accounting curricula to their offerings, including 

Professional accounting bodies like the ACCA have 

 the accountant work force. But it’s still a bit of the Wild West out there, Thomson said. Government and industry haven’t coalesced around one carbon accounting method or regulations, and there are many standards from different organizations, including the 

It’s also early days for carbon accounting software and technology.

“There is a problem with being an early adopter,” Thomson said. “Right now the software is not there. You’ll be helping develop the software. But that’s often costly, takes time. There’s no real infrastructure in place.”

But “if you want to future-proof your career,” he said, there’s no better time to get into carbon accounting.

Is carbon accounting an answer to the talent shortage?

The combination of purpose and impact may help attract new talent to accounting. 

 the climate disclosure rule for public corporations, it doesn’t mean that sustainability reporting requirements are gone entirely. Many organizations must still comply with climate disclosure laws in 

Under those laws, companies continue to be tasked with reporting emissions and environmental impacts, and many organizations are 

 to the finance team, which is already well-versed in tracking, compliance, and audits.

Centering ESG in the finance department moves sustainability issues from reputational and mission concerns into a core business function, according to experts who spoke with CFO Brew.

“Finance controls the heartbeat processes of companies,” Brigham McNaughton, partner in PwC’s sustainability practice, told CFO Brew. “Being able to just have sustainability at the table, the considerations embedded on all those is going to be incredibly powerful. And that’s the work we’re starting to see happen more.”

According to Kate Gordon, CEO of California Forward, a sustainability advocacy group, and a former senior advisor to the US energy secretary, integrating sustainability into finance means it will now be discussed in more concrete terms businesspeople care about—money and risk.

“Fundamentally, if you want business to take something seriously and be a bottom line business issue and not a side project, it has to be done in the language of business,” Gordon said.

There are other benefits, too. Moving some sustainability responsibilities under the CFO makes them less susceptible to political shifts and could even help protect staff from layoffs, according to Gordon.

“Unless something is embedded in a way that reduces risk to your bottom line and potentially maximizes return, it always risks being thrown out,” she said. “That’s just the reality of the business world.”

 The regulations are also causing companies to put their money where their mouth is, she said. McNaughton agreed that regulations require companies to outline how they’re going to actually deliver a climate goal, not just set aspirational ones.

“That created a moment where people either had to choose to say, we have a big goal and we don’t know how we’re going to meet it, or we have a big goal and here’s how we’re going to meet it,” he said.

He hasn’t seen many companies that are willing to admit to regulators and to the public that they actually don’t know how they’re going to reach their goals. And because SEC disclosure rules didn’t require companies to cut emissions, many, like 

, have rolled back public commitments or abandoned them to avoid officially acknowledging the gap between ambition and execution.

“They got worried about their commitment,” Gordon said. “And maybe that’s a good thing, because maybe we need to be making commitments that people can actually achieve.”

 Gordon hopes that by making climate risk part of the CFO’s mandate climate risk assessments will be front-loaded instead of being an addendum. She also expects that integrating sustainability as a core business function will help shift pricing, making sustainable investments more affordable and available.

As sustainability teams have learned the language of finance to make the business case for their investment, CFOs are now having to learn the nuances of sustainability. The second of California’s climate laws, 

, the Climate-Related Financial Risk Act, compels companies to address climate transition risk, which, according to Gordon, “is newer to the CFO world and harder to calculate.”

She pointed out that CFOs need to start factoring in technology risk for new energy systems as well as litigation risks, like the 

 against oil and gas companies, into their calculations. Right now, she said, businesses “don’t price the real risk of ignoring climate change” accurately or at all, but “the more you price that in, the more you see business behavior change.”

And as the CFO becomes more aligned with ESG, that could be a game-changer for sustainability efforts.

“I think finance can help to translate,” McNaughton said, “how we articulate how [sustainability] is going to drive growth…Then your CFO comes and says, ‘How can I give you more? Because you’re that part of the business I want to fund.’”

Finance is translating sustainability into the language of business

Sustainability is evolving from a side project into a core business function. 

Alex Zank

Imagine two manufacturers operating in the Southeastern US. Both are aware of heightened 

The first company thinks through the risk and ponies up for some proper—but not cheap—flood mitigation infrastructure. The second either doesn’t consider doing this, or decides the cost was too much. In comes a huge, wet hurricane. The first manufacturer avoids the worst of it and production is back up quickly. The second is down for a while, with expensive repairs to boot.

Which company has the advantage in this scenario? 

Not every organization has suffered a major natural disaster, but “the minute you do, and you burn a billion-dollar pharmaceutical plant to the ground or you flood it, the next day everybody gets religion for resilience and risk management,” Malcolm Roberts, CEO of commercial property insurance carrier FM, told CFO Brew.

CFOs and other C-suite leaders who view climate resilience as an investment can give their organizations the upper hand over those who view resilience as a line item expense, according to experts CFO Brew heard from.

“Managing climate risk isn’t just defensive. It’s profitable, because adapting creates competitive advantage,” Christof Reinert, head of Risk Management Partners, a business unit of Munich Re, said during a presentation at the 

 conference in May. “It enhances trust with your stakeholders, and it improves operational planning.”

 Reinert pointed to research by the World Bank that found a 4:1 cost benefit ratio to investing in climate resilience in low- to middle-income countries. Investments included improved early warning systems and more climate-resilient infrastructure. “That’s not just resilience, that’s smart business,” he said.

Another report concluded that the benefits may be even greater. According to a 

 from World Resources Institute, “every $1 invested in adaptation can yield over $10.50 in benefits.”

“Though adaptation is often misunderstood as only helping to avoid climate-related losses, it can also deliver economic, social, and environmental returns,” the paper reads.

 Smart climate investment requires the right mindset and data-informed practices, according to Reinert. For starters, company leadership must recognize that “climate risk is now part of…the core business agenda,” he said.

Organizations should play out scenarios to identify vulnerabilities such as value concentration, risk concentration, and possible supply chain weaknesses. They also must engage with stakeholders including board members and customers, Reinert added.

A key way to become more resilient is to partner with insurance brokers and carriers, which often have risk management tools and services to help clients manage client risks. “The first thing for a C-suite to realize is [insurance] is an investment…It’s not an expense,” Roberts said.

FM has an incentive program to give organizations a little extra nudge toward making needed resilience investments. Four or five years ago, the insurer came up with a “climate resilience credit” that listed policyholders’ biggest climate risk exposures, along with suggested steps to mitigate them. Companies that make the fixes receive a 5% insurance premium credit.

FM has returned roughly $1 billion in premiums through this credit program, and in turn, policyholders are slated to eliminate $50 billion in expected climate-related losses by the end of this year, Roberts said. The resilience credit, along with other climate risk tools, have been “a home run for us,” he said.

Munich Re’s Reinert concluded his remarks by imploring organizations to take a forward-looking view of climate investments.

“Climate resilience isn’t about protecting the past, it’s about growing the future, the resilience of your company, [and] the value of your company,” Reinert said. “That is what you’re protecting…Let’s make climate risk not a liability, but a lever for growth.”

Climate resilience offers a business advantage

It’s time to rethink resilience spending as an investment, not an expense, experts say.

The past four years were a boom time for ESG and climate considerations for businesses. The 

 greenhouse gas disclosures for public companies in 2022, the European Union set up the Corporate Sustainability Reporting Directive that same year, and in 2023, half of the 

Yet with the boom came the backlash. Also in 2023, mentions of ESG on earnings calls dropped to their lowest level since 2020, according to the 

 on Corporate Governance. And more than 150 anti-ESG bills were introduced into 37 state legislatures that year. But these were just preamble to the vibe shift after the 2024 reelection of President Trump. His administration’s withdrawal from the 

 climate disclosure rules, and the EPA’s bid to 

 in climate grants signaled to companies that sustainability is not a top priority.

But the question is, have CFOs been listening, and what does it mean if they haven’t? The Trump administration’s hatred of DEI resulted in a massive pullback from corporate DEI initiatives by businesses from 

. However, companies seem to be charging ahead with climate-related spending, according to experts who spoke with CFO Brew.

Climate investments are multi-year, if not decades-long, undertakings. For example, in the carbon credits marketplace, many high-quality credits are claimed years in advance.

According to Yee Lee, chief growth officer at Terraformation, a carbon credits project developer focusing on native biodiverse reforestation, many of the conversations happening today are about creating projects that will deliver their first credits in five or six years (at least a year after Trump has left the White House) and continually deliver credits for the next 30 to 40.

Companies are building future carbon credit supply streams to ensure priority access for the long run. As such, the projects that were created during the ESG boom are still being paid off and delivering credits today.

But even in the short term, carbon credit spending is still expanding in some interesting ways.

 over the past six months from Patch, a carbon credits supplier, showed that “the number of unique companies retiring credits,” aka taking them out of the market after using them to offset emissions, “during the post-election period” was up 6% YoY. But the total volume of carbon credits retired decreased 17%—indicating that more companies were interested in buying credits, but that there’s a supply crunch emerging, especially over high-quality and 

. Hence the need to lock in those projects years in advance, as Terraformation is seeing.

Patch CEO Brennan Spellacy agrees. “​​A lot of CSOs, CFOs, heads of supply chain are aware that it sometimes takes four or more years to even implement a large-scale program across their business,” Spellacy told CFO Brew.

But the easing off of climate scrutiny and other regulatory pullbacks could be a blessing for CFOs and companies who still want to take climate action.

“What we’ve seen is actually companies getting a breather,” Kevin O’Connell, US sustainability assurance services leader at PWC, told us. “The opportunity to essentially take a breath and really figure out the best way to comply with a lot of these regulations.”

 It took 75 years to create a financial reporting ecosystem, he noted, and now we’re trying to do the same for environmental reporting in only five years.

But the big change in the Trump 2.0 era, according to Spellacy, is the move from greenwashing to “greenhushing.”

Companies are “maintaining or increasing their climate change mitigation efforts, but taking care to draw less attention to what they’re doing as a way to shield themselves from potential backlash from the new administration,” according to the Patch report. Spellacy told us that some of Patch’s “largest customers, companies spending tens of millions of dollars on carbon per year,” aren’t listed on the website and won’t talk about it publicly, which is a huge inhibitor for climate action.

“The only thing that results in is a drag on information flow,” he said. “Which results in people not being able to triangulate and find the best way to do something.”

A credit card obscured by pollution from a power plant. (Credit: Illustration: Anna Kim, Photo: Adobe Stock)

Is climate spending decreasing in the Trump 2.0 era?

Climate investments are long-term projects, and some CFOs are waiting out the Trump administration. 

Courtney Vien

The 2017 Consumer Electronics Show came with its share of 

. Smart washing machines, coffee makers, air fryers, and even 

 were on display. But Laurent Canneva noticed one glaring omission: There were no smart trash cans.

And collecting data from trash receptacles, Canneva realized, could solve a genuine problem: Organizations don’t have an accurate way to measure how much trash they produce. Trash output from an office building, for instance, can typically only be measured in very rough terms—by the truckload or the dumpsterful. That can make it hard for organizations to track waste data for sustainability reports or to earn zero-waste certification.

Canneva and his friend, engineer Laurent Meunier, founded Spare-It to address this problem. Spare-It’s system consists of smart scales, sensors, and cameras installed below and inside trash and recycling bins that continually upload waste data to an online platform. Weights from the scales let organizations know how much trash people are throwing away in pounds or kilograms. Canneva is now CEO of the company.

How Spare-It is using AI to solve a novel problem can be a useful guide for CFOs looking to incorporate technology into their processes.

AI within the platform analyzes data from the sensors to recognize more than 100 types of objects and identify “contamination”—

 placed in recycling bins, which can clog the machinery at recycling facilities. (About 25% of the recycling in the US is “contaminated.”) Spare-It data, Canneva said, can be integrated with organizations’ existing sustainability or building management systems.

Organizations can use this data to get greener while saving money. For instance, Canneva said, one of Spare-It’s clients is a landlord for seven buildings with an occupancy of 4,000. For years the company provided tenants deskside waste bins that were emptied twice a day. Spare-It’s data showed them that 90% of those bins were less than 10% full when they were emptied. The company reduced the amount of waste bins it used by 90%, saving money and labor.

Showing employees their waste data can also spark positive change, Canneva said. Spare-It’s system is granular enough to track waste data by floor and even by individual receptacle. Some clients track this information on leaderboards and hold informal competitions between floors or departments to see which one can recycle the most. Boston University, one of Spare-It’s clients, shows its waste data in elevators and interactive wall displays in its landmark Center for Computing and Data Sciences (popularly known as the “

These social nudges can be surprisingly effective. Spare-It’s customers, which include consulting firms, e-commerce companies, and global financial institutions, send an average of 18% less waste to landfills per year, Canneva said. Some of its best customers recycle or compost 90% of their waste, sending only 10% to landfills or incinerators, he said.

 from France’s Credit Mutuel Equity and other investors. The company will use the capital to double its staff, ideally going from 14 employees to 28 by the end of the year, Canneva said. Some of the new employees will be data scientists who will train Spare-It’s AI to recognize more items and make its model more predictive, he said. Other hires will focus on sales and marketing.

Canneva, who left a career in Big Pharma to run Spare-It, is proud to help solve the problem of waste. “We are generating too much waste,” he said. With the necessary data, he said, “we can understand it, we can visualize it, and we can manage it.”

“What we are trying to achieve here is not to be perfect” or to have zero waste, he said, “but just to leverage data so that together we learn how to do a little bit better every day.”

ESG