Executive Briefings

Memo to CFO: You Better Learn About Carbon Caps, Credits

Most CFOs don't seem to be paying any attention to the emerging complexities of carbon credits. Such ignorance could prove costly to shareholders. A growing number of state emission mandates, such as those imposed in California, are already beginning to create regulatory headaches for some businesses. Federal carbon caps, expected within the next three years, will raise the pain to a whole new level.
A few finance managers, with an eye toward coming national regulations, are already purchasing high-quality offsets at relatively low prices. When federal legislation hits, the clutch of credits could be turned into a source of windfall profits for their companies. Conversely, CFOs who don't understand the complexities of carbon commodities could find themselves paying high prices for low-quality offsets in a seller's market. And make no mistake, federal carbon legislation will almost assuredly trigger a steep rise in the price of CO2 credits.
Nevertheless, many CFOs seem content to let other departments deal with the risks that come with carbon credits.
Source: CFO, http://cfo.com

Most CFOs don't seem to be paying any attention to the emerging complexities of carbon credits. Such ignorance could prove costly to shareholders. A growing number of state emission mandates, such as those imposed in California, are already beginning to create regulatory headaches for some businesses. Federal carbon caps, expected within the next three years, will raise the pain to a whole new level.
A few finance managers, with an eye toward coming national regulations, are already purchasing high-quality offsets at relatively low prices. When federal legislation hits, the clutch of credits could be turned into a source of windfall profits for their companies. Conversely, CFOs who don't understand the complexities of carbon commodities could find themselves paying high prices for low-quality offsets in a seller's market. And make no mistake, federal carbon legislation will almost assuredly trigger a steep rise in the price of CO2 credits.
Nevertheless, many CFOs seem content to let other departments deal with the risks that come with carbon credits.
Source: CFO, http://cfo.com