For organizations with net zero commitments, durable carbon dioxide removal (CDR) is a way to broaden a sustainability portfolio and secure long-term business value. However, many Chief Financial Officers (CFOs) may not be familiar with the benefits that CDR can provide to an organization, both as a sustainability tool and as an investment in risk mitigation.

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Here are 5 things that CFOs should know when deciding whether to include carbon removal in the budget:

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1. Carbon Removal Provides a Safeguard for Existing Net-Zero Commitments

Emissions reduction must be the first part of any sustainability strategy, but these plans will inevitably include residual or “hard-to-abate” emissions that threaten net-zero commitments. Failing to address this gap could expose the business to compliance issues and reputational risk. In addition, both the Boston Consulting Group and McKinsey expect an undersupplied market, which could significantly increase the price of carbon removal. Securing CDR now thus reduces the exposure to compliance shortfalls, reputational risk, or higher prices when demand likely outpaces supply.

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2. Carbon Removal Is a Flexible Financial Tool and Asset

Adding CDR to an organization’s sustainability portfolio hedges against exposure from existing net-zero commitments, as well as the prospect of future compliance markets. In a market where CDR credits are expected to increase in price, they also become appreciating assets that can be potentially sold for a profit when no longer needed.

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3. Early Investment in Carbon Removal Builds Strategic and Financial Leverage

Acting early on durable carbon removal locks in lower prices, ensures long-term access to supply, and strengthens your organization’s future flexibility. By securing CDR now, CFOs can hedge against rising costs and tightening markets — while freeing up future budgets for innovation and new sustainability initiatives.

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4. Carbon Removal Is an Unprecedented Growth Opportunity in an Emerging Market

The carbon removal market is projected to be one of the largest emerging markets in history. The Intergovernmental Panel on Climate Change (IPCC) estimates that CDR will need to scale by a factor of 5,000 to achieve the goals of the Paris Agreement. McKinsey projects this to be a 1.2 trillion-dollar market over the next 25 years, and being an early mover provides the opportunity to be a leading player. That goes beyond purchasing or trading carbon credits, whether your business is in manufacturing, finance, insurance, or tech. Expanding your organization into this market presents massive additional revenue opportunities and a chance to shape the infrastructure of a major new industry.

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5. Carbon Removal Can Be Purchased with Confidence

Navigating carbon markets can be challenging, and the risks with many projects are real. However, these risks can be mitigated by working with a partner like Carbonfuture, which provides organizations with diversified portfolios backed by audit-ready data. When provided with rigorous due diligence, independent verification & certification, as well as supplier diversification, it enables the sustainability team to simplify their governance structure and reduce financial risk.

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Why It Matters

Durable carbon removal is prudent financial management that secures future compliance, protects your organizational reputation, strengthens your position in a tightening regulatory landscape, and expands your business into a new market.
CFOs who act early can:

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• Hedge regulatory and price risk before compliance schemes mature
• Convert their sustainability expenditures into appreciating assets
• Simplify their governance processes with audit-ready data
• Position their organizations at the forefront of a massive emerging market