An innovative approach to sustainability accounting this week resulted in a major deal between global law firm Clyde & Co and Nature Broking. Capitalising the firm’s investment as a balance sheet asset rather than a profit-and-loss expense, Nature Broking is set to manage a strategic portfolio for a multi-year carbon removal credit procurement programme. It has secured supply to be delivered in 2038 for residual emissions.
The five-year partnership addresses 10,000 tonnes per year of projected residual emissions from 2038. Positioning Clyde & Co ahead of emerging regulatory requirements, the deal anticipates the Science Based Targets initiative’s (SBTi) recently updated standards. Increasingly these recognise carbon removal credits as essential for addressing unavoidable residual emissions.
The new arrangement is notable for three Nature Broking innovations. The following, pioneering measures address persistent concerns about carbon credit market integrity, while providing the sophistication that corporates have long sought in order to engage the market with confidence.
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Strategic forward procurement
Rather than spot-market purchasing, Nature Broking has enabled buying forward so that Clyde & Co can hedge against projected price increases and supply constraints as companies approach net-zero deadlines. Carbon removal credits are projected to multiply by a factor of three-to-five by 2038, according to Bloomberg forward pricing analysis.
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Balance sheet capitalisation
Working with specialist advisers Rethinking Capital, Clyde & Co is using existing International Accounting Standards Board provisions (IAS37: Contingent Liabilities and IAS38: Contingent Assets) to capitalise carbon credit investments as balance sheet assets rather than P&L costs. This removes the profitability penalty that often prevents organisations from investing in sustainability at scale.
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Risk-mitigated portfolio design
The portfolio carries full insurance through Kita against project failure, addressing the primary risk concern in voluntary carbon markets. With its leading due diligence process, Nature Broking selected the projects with the highest integrity and lowest risk. Based on verification standards, permanence and geographic proximity, the team assembled a portfolio that aligns well with Clyde & Co’s operations.
Luke Baldwin, co-founder of Nature Broking, said: “For the first time, sustainability professionals can confidently walk into the CFO’s office with an investment proposal, not an expense request. If carbon removal credit values increase—which forward curves suggest they will—the asset value on the balance sheet increases proportionally through asset appreciation. If decarbonisation accelerates ahead of schedule, the organisation has surplus removal capacity that provides strategic flexibility.”
Paddy Linighan, Chief Sustainability Officer at Clyde & Co, said: “This represents a sophisticated business case for long-term climate action that aligns financial prudence with environmental integrity. By treating our net-zero commitment as what it is, a future liability requiring strategic capital allocation, we can invest proactively rather than reactively. This pioneering value-creation partnership with Nature Broking complements our broader decarbonisation programme, which includes an SBTi-approved emissions reduction target of net zero by 2038 and active operational improvements across our global footprint.”
The first year portfolio strategy includes a five-project allocation: two UK Woodland Carbon Code certified projects, one UK rewilding initiative through an innovative buyers club with Nattergal, one tree planting, crop diversification and ecosystem restoration Verra certified project in Kenya through a unique legal sector collaboration with Save the Children Global Ventures, and strategic positioning for transition to more permanent carbon removal technologies as they scale post-2030.
The UK woodland projects include an Ayrshire site within the Galloway & Southern Ayrshire UNESCO Biosphere, transforming land from 1940s-era pasture back to native woodland to enhance biodiversity and restore balanced ecosystems, and a Dumfriesshire mixed native species project designed to enhance landscape and ecological integrity.
The deal comes as corporate carbon markets show signs of acceleration. Companies used more carbon credits in the first half of 2025 than at any point in the previous 15 years, according to MSCI Carbon Markets, with approximately $10 billion of capital committed to credit generation. That’s more than triple the same period in 2024.
However, high-profile investigations into low-quality credits continue to create reputational risk for companies purchasing carbon removal. Nature Broking’s approach emphasises quality, due diligence, insurance, and transparency as differentiators in a market where quality varies dramatically.
Clyde & Co’s broader sustainability strategy includes SBTi-approved emissions reduction targets and active operational decarbonisation efforts, with carbon removal credits addressing only the residual emissions that will remain after maximum reduction efforts. The firm’s approach aligns with SBTi’s framework recognising that all sectors will have some unavoidable emissions even after comprehensive decarbonisation.