Most organisations treat carbon removal credit purchases as profit and loss (P&L) expenses, creating a profitability penalty that suppresses margins. CFOs routinely reject sustainability investments, not because they oppose climate action, but because the accounting treatment makes it financially indefensible.

A recent pioneering partnership between Clyde & Co, Nature Broking, and accounting specialists Rethinking Capital demonstrates an exciting alternative: balance sheet capitalisation using IAS 37 Provisions, Contingent Liabilities and Contingent Assets, and IAS 38 Intangible Assets.