Methodology: How we assess a company’s progress toward net zero

Trellis’ Chasing Net Zero series is about a simple question: How are companies faring on their net zero journeys?

A question this important should be easy to answer. Many companies provide emissions data in their sustainability reports and in disclosures made to CDP, an independent clearinghouse for environmental data. In theory, these sources can be used to assess progress toward interim targets, many of which fall between now and 2030.

In reality, it is challenging to answer the question using publicly available data. Companies disclose information in different ways, and they change their goals and accounting methodologies over time. Subsidiaries are acquired and divested. Disclosures may be incomplete, with some scopes included and others omitted (usually Scope 3). 

To fill in the gaps, the Chasing Net Zero team — reporters Jim Giles, Heather Clancy and Saul Hansell — is using a selection of sources. Like everything we do at Trellis, we employ these sources to create Chasing Net Zero articles that provide actionable insights sustainability professionals can use to accelerate their work. We believe that by shining as bright a light as possible on company progress, we can tease out the factors propelling some companies to success and holding others back. 

Sources we use

  • Annual sustainability reports. These are generally the first thing we look at. The emissions numbers in these reports are, we assume, accurate as stated. Still, as discussed above, the data can be incomplete and the accounting opaque. 
  • Target validation. Having a target validated by a third party is an important — although, some would argue, inessential — component of goal-setting. The first place we check is the dashboard maintained by the most influential target-setter, the Science Based Targets initiative (SBTi).
  • Reports on the integrity of company targets. Several teams worldwide regularly interrogate the integrity of company targets. The Corporate Climate Responsibility Monitor, published annually by the non-profit NewClimate Institute, is a great example. We also review a wealth of information on target integrity at the Net Zero Tracker and Climate Action 100+ websites. 
  • Climate-related lobbying. We use LobbyMap to check for information on what companies lobby for and how they do it. This doesn’t directly impact a company’s emissions, but when directed against important climate legislation it can undermine a firm’s claim to be committed to net zero more broadly. 

Essential questions

We ask ourselve a list of questions as we make sense of each company’s goals and progress. These are:

  • Has the company’s target been approved by the SBTi?
  • Has the company changed the size of its targeted cuts, baseline year or goal year since setting its target? If so, why?
  • Have new lines of business — hello, data centers and AI! — impacted its emissions’ trajectory?
  • What level of progress have other companies in the sector made?
  • Have regulatory changes impacted the company’s emissions?
  • What role do carbon credits play in the company’s net zero strategy?
  • If the company is not on track, what are the chances it can get back on?

Expert advice

We’re lucky to have a stellar team of advisors to consult.

  • Bruno Sarda, former president of CDP now with the consultancy EY
  • Tensie Whelan, professor at New York University’s Stern School of Business
  • Laura Draucker, senior director for corporate climate action at the nonprofit Ceres
  • Steve Smith, executive director of Oxford Net Zero and professor at the University of Oxford

Each article in the Chasing Net Zero series is reviewed by at least one of the above before publication. Their feedback is then used to improve our assessment and inform our actionable takeaways.

We’d love to hear your feedback, too — whether you feel we’re succeeding at or falling short of our objectives. You can connect with our reporting team of Jim Giles, Heather Clancy and Saul Hansell on LinkedIn, or email [email protected].

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Apply to 25 Climate Tech Startups to Watch in 2025

Climate tech innovation isn’t getting any easier in 2025. Political and economic uncertainty challenge founders and investors. Still, U.S. funding in the first half of 2025 was up 21% compared to the same period a year ago.

The annual Trellis list of 25 Climate Tech Startups to Watch recognizes the most promising of these early stage startups and their climate technologies — and to help keep sustainability leaders at the leading edge of decarbonizing operations. To that end, it features early-stage companies in five sectors: energy, carbon, transport, industry and nature.  

2025 Application

Apply below to get showcased — including a video of your “elevator pitch” — on the 2025 list, based on a review by Trellis editors and analysts based on the following criteria: solution uniqueness, traction, team strength and impact potential. 

The 25 finalists will also make their pitches to an in-person audience of sustainability and climate executives, investors, and government officials during Trellis Impact 25, our leading event for sustainability professionals developing innovative solutions to the planet’s biggest challenges, Oct. 28-30 in San Jose, Calif. 

Five winners from each of five categories will present live to our audience, who will vote on the Climate Tech Startup of the Year. The winner — along with the 25 Climate Tech Startups to Watch in 2025 — will be profiled in an article in the Trellis Briefing newsletter and on Trellis.net. A “people’s choice” winner will also be selected based on online voting.

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After their net-zero pledges expired, most companies set a course without SBTi

In March 2024, the Science Based Targets initiative (SBTi) revealed it had removed 239 companies, including Microsoft, Procter & Gamble, Unilever and Walmart, from the list of those committed to setting net-zero targets. The companies had timed out: SBTi rules give businesses 24 months to submit targets for validation after the initiative finalizes a standard or receives a commitment, and the companies missed the deadline.

Trellis reached out to SBTi and several companies that had commitments removed to understand what happened next. Here’s what we discovered.

Very few subsequently had targets validated

According to SBTi data, as of last week just 17 of the 239 companies have had net-zero targets validated since their commitments were removed. The list includes British American Tobacco, Gap and S&P Global. 

The remaining 222 companies — 93 percent of those that had commitments removed — includes many large businesses, from the large French utility EDF to JBS, one of the food giant, together with United Airlines, Johnson & Johnson and Unilever. (Some of these companies may be in the process of having net-zero targets validated. SBTi does not comment on targets that are being assessed.)

It’s worth noting that SBTi offers companies the option of committing only to a near-term target, which is often set for 2030. Of the 239 companies that had commitments removed, 14 subsequently had near-term targets validated, including Unilever and Johnson & Johnson. Many of the others, including Microsoft, Walmart, United and EDF, already had near-term targets validated.

Looking across the economy as a whole, slightly more than 1,900 companies have had net-zero targets validated by SBTi and close to 2,900 have committed to doing so.

Companies are exploring other options

Trellis reached out to 10 of the companies that have not subsequently had net-zero targets validated for updates on their strategy. The majority — Carrefour, Procter & Gamble (P&G), United, JBS, Elevance Health (formerly known as Anthem), Engie and Johnson & Johnson — did not return our inquiries.

The replies we did receive, together with press releases from companies on our list, reveal that some companies are exploring other options for guiding their net-zero journeys.

Unilever, for instance, said it remains committed to reaching net zero by 2039 — more than a decade ahead of many other companies. A company spokesperson said the plan “aligns with the Intergovernmental Panel on Climate Change’s definition of net zero, which differs from the SBTi’s definition,” but did not return a follow-up request for clarification on how Unilever interprets the difference.

Carrefour, a retailer with more than 14,000 stores in 40 countries, has since had the interim targets in its transition plan validated as in line with 1.5 degrees Celsius of warming by the ACT Initiative, a standard originally developed by the French government and now hosted by the World Benchmarking Alliance. Carrefour has begun using the methodology to assess the plans of its suppliers in its home country of France. However, the company’s existing net-zero commitments would likely not qualify for SBTi approval because, according to a review by the investor initiative Climate Action 100+, the targets do not cover Scope 3.

Several companies that had net-zero commitments removed, including Microsoft, P&G and Unilever, are signatories to The Climate Pledge, which commits companies to reaching net zero by 2040. (Amazon, a co-founder of the pledge, had its net-zero commitment removed by the SBTi in 2023.) 

The Climate Pledge encourages companies to make commitments but is not intended as a standard. As such, it offers significant flexibility, particularly around the use of offsets.  SBTi’s methodology permits the use of carbon removals to offset around 10 percent of residual emissions at the end of a company’s journey to net zero; the Climate Pledge does not specify an upper limit and allows a broader range of offsets to be used.

Asked whether alternative frameworks risk splintering corporate action on climate, SBTi noted that net-zero submissions have grown nearly 30 percent so far in 2025 and by more than 100 percent in 2024.  

“These back-to-back increases send two clear messages,” a spokesperson said. “Firstly, companies continue to be committed to climate action. Secondly, they see the SBTi as the trusted roadmap to guide impactful implementation.”

Keeping an eye on SBTi’s plans

SBTi is updating its net-zero standard, and some of the companies that have not had net-zero targets validated told Trellis that they’re watching the process closely.

“Our approach will be informed by science and reflect our position in the overall value chain as a global multicategory retailer,” Walmart said in a statement.

“As the [standard] continues to mature, we are thoughtfully evaluating how its evolving requirements align with our broader decarbonization strategy,” a Microsoft spokesperson said, noting the company is particularly interested in the SBTi’s rules on residual emissions and use of removals.

“We are following this process closely and have submitted our feedback on the draft standard,” the Unilever spokesperson said.

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What KIND Snacks can teach us about the new frontiers of paper packaging

The opinions expressed here by Trellis expert contributors are their own, not those of Trellis.​

Paper packaging is taking on new frontiers. Maybe you’ve seen paper across new formats such as dog food canisters, vitamin mix containers or even staples in your liquor cabinet. 

Consumers love paper packaging for its perceived environmental benefits, recyclability and renewability. They’re even wondering: Why can’t all my packaging come in paper? 

Historically, paper packaging was limited by price and performance constraints that gave plastics and other materials an edge. But now, paper-based packaging has grown to make up about 46 percent of the global packaging market. As more brands continue the shift toward “paperization,” there are three key steps they can take to ensure their paper packaging delivers on performance, consumer trust and sustainability.

The KIND bar case study

Snack bars have traditionally been the domain of foil wrappers or plastic pouches. But that’s starting to change. Recently, Mars’ KIND Snacks brand launched a national pilot of a paper-based wrapper for their snack bars — a package using How2Recycle pre-qualified paper material designed to be curbside recyclable, and aligned with KIND’s goal of ensuring all packaging is designed for recyclability by 2030.

The pilot, currently running in select Whole Foods Markets across eight states, is an important step, but still it’s not a full transition. Durability of the new packaging through transportation and the ability of the paper substrate to maintain product shelf-life are critical, as is curbside recyclability. All of these challenges took time and collaboration to overcome.

So, how did KIND Snacks overcome them? They started small. They started by gathering foundational insights on the packaging’s durability and performance — insights that they took back to their R&D teams before launching the current national pilot. Collaborators worked to ensure the packaging would be qualified by How2Recycle as “widely recyclable,” meaning it can be collected curbside for recycling in most communities. 

This case underscores the promise and the complexity of paper-based packaging. While the benefits — recyclability, renewability and alignment with sustainability goals — of paper-based packaging are clear, they come with trade-offs. To build consumer trust and understanding, clear and consistent messaging about fiber sourcing and recyclability remain essential. 

As we can see from KIND, there are several actions businesses can take to reap the benefits of paper packaging. Here’s a look at three: 

1. Collaborate on innovative formats

Working closely with their supplier, Printpack, to address the challenges of switching to a new material was critical to the successful launch of the KIND Snacks’ paper wrapper. The companies collaborated to create a packaging format that met required product functionality, such as preserving shelf life, while also delivering a format designed to be recycled in curbside collection programs.

To tackle shared challenges such as recovering new paper formats, the packaging industry must scale collaborations such as those between KIND and Printpack — moving beyond individual efforts to unlock collective impact. 

Organizations are already coming together to help improve end markets for recycled fiber and increase the recovery of innovative packaging formats. Take the Polycoated Paper Alliance as an example. The coalition of brand owners and packaging producers is working to advance recovery for commonly used items such as paper cups, ice cream containers and flexible paper pouches. The group addresses specific technical challenges such as the sortation of polycoated paper in material recovery facilities and acceptance in community recycling guidelines.

2. Research outstanding challenges

Other major hurdles for paper packaging can be addressed by researching existing sustainability and recyclability challenges. For example, consumers often think that food residue on packaging — such as grease on a pizza box — makes the packaging not recyclable. The work of individual organizations, such as Smurfit Westrock’s study on pizza boxes, has shown that food residue contamination may be less problematic than commonly perceived. Still, broader research into these and other hurdles to paper packaging, such as recyclability, durability and product shelf life, can help brands switching to paper close the performance gap. 

The paper packaging industry can follow similar research efforts across other packaging materials, such as the plastics sector’s research into “clean and dry” standards for recyclability, which seek to establish clearer guidance for how clean and dry packaging needs to be to actually be recycled. Building on this research model, the Sustainable Packaging Coalition’s Paper Packaging Recyclability Collaborative is studying How2Recycle label’s influence on consumers’ willingness to clean food residue off paper packaging. 

Addressing lingering challenges will require sustained, industry-wide collaboration and a unified approach to research and consumer guidance.

3. Commit for the long-haul

At a recent SPC sustainable packaging event, leading packaging companies PaperWorks, Billerud and Progressive Converting stressed a critical difference between paper and packaging: investment. With decades of innovation and investments behind plastic packaging’s barrier technologies, it sets a high standard that many paper alternatives are still working to meet.

So how does paper get on par with the performance characteristics of other packaging materials it might replace? How do innovative paper technologies get to cost parity with materials that have been on the market much longer? How do brands realize the benefits of paper and positive customer response? The answer lies in long-term commitment and cross-industry collaboration.

Brands such as KIND Snacks are leading the way with their pilot, but outside of the food space, other major packaging players such as Amazon and Microsoft are similarly committing to transition as a means to meet their sustainability goals and improve customer experience.

Paper’s potential depends on collective action

Switching to paper packaging presents challenges — but for brands committed to making the switch, the path forward is clear. With bold commitments, open collaboration and a willingness to tackle the tough questions together, brands can accelerate paper innovation, earn consumer trust, and turn sustainability goals into tangible progress. 

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A cheat sheet on the GOP budget law and Trump’s latest shot at solar and wind

The U.S. budget reconciliation bill spared some tax incentives for solar and wind plants and carbon capture projects, but the rules have changed dramatically and a new executive order published July 7 will make it harder to qualify for credits.

The new spending law enacted July 4, a.k.a. One Big Beautiful Bill Act, retains existing production and investment tax incentives for solar and wind projects but only if construction begins by July 2026 and the facility is in service by the end of 2027. That’s eight years earlier than what was allowed under the Inflation Reduction Act. 

The law also tightens restrictions against using materials acquired from certain “foreign entities of concern,” particularly China. It requires projects to increase the proportion of equipment and technology that isn’t tied to those countries, starting in January 2026 and ramping quickly over the next four years. 

The tougher domestic content requirements (also called “material assistance”) apply across all of the revised incentives and vary depending on the type of technology. “The question isn’t who this will affect, it’s who will this not affect,” said Astrika Adams, an environmental attorney with law firm Beveridge and Diamond. “We are looking at a very different marketplace here.” 

President Donald Trump’s related mandate, “Ending Market Distorting Subsidies for Unreliable, Foreign Controlled Energy Sources,” aims to make qualification even tougher for solar and wind developers. It was written to appease hardline House Republicans unhappy with Senate rewrites that spared some tougher cuts for solar and wind projects. 

Expect more rule changes

The executive order requires the U.S. Treasury to issue guidance by late August to “build upon and strengthen the repeal of, and modifications to, wind, solar and other ‘green’ energy tax credits.” It also asks the Department of the Interior to review policies for putting energy projects on federal land to make sure they don’t provide “preferential treatment” to wind and solar installations.

The net effect: It will become more complicated for developers to claim incentives, as Trump has promised. “It’s a signal to the solar and wind project developers that there likely will be more bad news,” said Adams. “There will be a higher burden that they will have to overcome.”

Corporations investing in renewable procurement and carbon removal projects have been bracing for these changes for months, and are already looking for ways to keep them alive with far less federal funding. “The market is still strong and valid,” Adams said. “There are still viable pathways out there for some of these projects.”

A real positive: The final bill preserves a provision that allows project developers to transfer or sell credits, which is important for attracting corporate buyers and other financing. 

What else is buried in the new law

Bad news for EV buyers

The new law eliminates one-time incentives of $7,000 and $4,000 for purchases of new and used electric vehicles, respectively, as of Sept. 30. A commercial version of this credit (45W) that supported larger vehicles such as electric buses or semi-trucks with credits of up to $40,000 was also killed.

Reprieves for battery storage, geothermal, hydro, hydrogen, nuclear 

Emissions-free electricity sources, as well as batteries that can address power demand spikes or stabilize the electric grid, still qualify for 30 percent construction credits set up under the production tax and investment tax credits in the Inflation Reduction Act. The phaseouts vary depending on the technology type — generally the mid-2030s — but the final bill is generally kinder to these advanced sources than the original House version. Clean hydrogen projects are still eligible for incentives, but only if they’re in operation by Dec. 31, 2027. (Details are outlined in the 48C, 48E, 48U and 48Y sections of the U.S tax code.) 

Surprise money for fuel cells

Fuel cell installations, previously excluded from the investment tax credit, are now eligible for consideration. The law applies to projects placed in service after 2025.

Standardized credit values for carbon capture projects

The 45Q tax code, which covers carbon capture and storage projects, used to offer tiered credits depending on the type of technology used. The new law standardizes the credit at $17 per metric ton for carbon capture and storage and $26 per ton for direct air capture. The change is meant to favor approaches where the captured gas is used for industrial application or enhanced oil and natural gas recovery.

Mixed news for sustainable aviation fuels

Section 45Z of the new law extends Clean Fuel Production Credit by two years through Dec. 31, 2029, which affects sustainable aviation fuel. There are some caveats, however. The value of the credit was cut from $1.75 per gallon to $1 per gallon. The credit applies only to fuel made with feedstock from Canada, Mexico or the U.S., and it can no longer be bundled with other incentives.

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McKinsey, Google and others make $41 million credit purchase from Louisiana carbon removal project

A carbon removal buyers coalition founded by McKinsey, Google and others has backed a new approach to biomass energy that promises to provide always-on electricity while sequestering carbon dioxide deep underground.

The Frontier coalition announced this week that it would spend $41 million on 116,000 removal credits from Arbor, a startup founded by a former SpaceX engineer that’s developed a more efficient process for what’s known as bioenergy with carbon capture and storage (BECCS). The startup will generate the credits with a facility close to Louisiana’s Gulf Coast that is expected to be operational in 2028.

The deal is the latest in a flurry of recent interest in BECCS. Microsoft, by far the most active buyer of removal credits, has contracted for close to 10 million BECCS credits from projects in Norway, Louisiana and Sweden since April.

Trio of innovations

Arbor says its approach advances BECCS in three ways. Rather than burning biomass directly, the company uses a new gasifier design to convert it into syngas, a mixture of hydrogen and carbon monoxide. The gas is then sent to a specialized furnace that burns it in pure oxygen instead of air. This creates a stream of CO2 in a liquid “supercritical” state, which is used to drive the turbine. (Conventional BECCS uses steam to do so.) Once used, the CO2 stream is captured and piped to a geological reservoir for permanent storage.

These innovations boost the efficiency of the biomass-to-electricity energy conversion by more than 30 percent, noted Frontier. And because the waste stream contains just carbon dioxide and water, rather than the mix of gases generated by other BECCS approaches, separation of the CO2 for storage is also cheaper. 

At present, the process is still expensive — Frontier’s is paying more than $350 per credit — but the coalition said costs could fall below $100 per ton of CO2 removed as the technology is scaled. The fact that Arbor integrates the capture process with power generation will help cut costs as that happens, because every two- to three-fold increase in the size of the system is projected to generate a 10-fold increase in power generation and carbon removal. 

“One of the amazing features of their technology is that the output does not scale linearly with the size of the facility that they build,” said Hannah Bebbington, Frontier’s head of deployment. “That is an incredible cost saving, right as you’re thinking about the economics of the next facility.”

What counts as waste?

The promise of carbon-negative power generation has made BECCS systems an important part of global net-zero scenarios, but issues around biomass sourcing have dogged the technology. One prominent biomass power plant, the Drax facility in northeast England, has repeatedly found to be using wood sourced from primary forests. More recently, researchers modeled the impact of nine biomass projects planned for the same region of the U.S. that Arbor plans to operate in and found that the increased demand for biomass would likely lead to the conversion of natural forests to plantations. 

One challenge is knowing exactly what constitutes “waste” biomass, said Freya Chay, carbon removal project lead at Carbon Plan, a nonprofit that analyses climate solutions. As biomass becomes more valuable, landowners and others may be incentivized to thin forests that would otherwise have been left untouched, for example. “We like to use the word waste to just stop thinking about all the upstream dynamics,” argued Chay.

Frontier has developed a series of sustainable biomass sourcing principles that are designed to protect against outcomes. In Arbor’s case, the project passed muster in part because the feedstock for the power plant will be thinnings from commercial plantations. These are currently left in piles or burned, said Bebbington. The methodology that Arbor follows, developed by Isometric registry, also requires third-party tracking to ensure that biomass from other sources is not substituted for the thinnings.

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Study: AI can cut billions of tons of carbon from food, power and mobility sectors

Discussion over AI and climate tends to cluster around two duelling opinions: Advocates hail the technology’s potential to accelerate progress toward net zero, while skeptics warn of a leap in emissions caused by the energy needed to power it.

Researchers at the London School of Economics (LSE) have weighed the two options and come down firmly on the advocates’ side. According to their analysis, AI has the potential to cut emissions by 3.2 to 5.4 billion tonnes of carbon dioxide equivalent (GtCO2e) annually by 2035. At the upper end of the range, that’s around 10 percent of the current global total.

The impact far outweighs the expected annual increase in emissions due to AI’s power demands, which the researchers peg at 0.4 to 1.6 GtCO2e over the same period.

The team’s findings are even more encouraging given that they restricted their analysis of the upsides of AI to just three sectors — power, food and mobility — while the technology’s energy use was calculated by looking across all areas of the economy. Their paper was published last month in npj Climate Action.

How AI can help

The LSE team focused on the three sectors because each contains potential opportunities for AI to drive decarbonization. In food, for instance, scientists can use AI to study molecular structures. This has already produced benefits in biomedical research and could accelerate development of alternative proteins that displace meat and dairy products. AI can also model electrical grids, speeding the integration of renewables and reduce vehicle ownership by optimizing systems used to manage shared transport.

For each sector, the team drew upon expert opinion and studies of AI’s potential to estimate its impact on three factors that determine how quickly a new technology will spread: cost relative to alternatives, appeal to users and ease of access. The researchers then projected the sectors’ emissions through 2035 with AI applied and under business as usual (BAU) scenarios. 

Source: Green and intelligent: the role of AI in the climate transition. npj Clim. Action 4, 56 (2025).

“The world faces an unprecedented opportunity to leverage AI as a catalyst for the net-zero transition,” wrote the team, which includes Nicholas Stern, chair of LSE’s Grantham Research Institute on Climate Change and the Environment and an influential figure in climate policy. “Our estimates show that the emissions reduction potential from AI applications in just three sectors alone would more than offset the total AI’s emissions increase in all economic activities, making a strong case for using AI for resolving the climate threat.” 

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These 4 trends are driving the carbon market toward higher prices

The voluntary carbon market has been in a slump. Amid a wave of negative press, the volume of credits traded has declined for three consecutive years, according to Ecosystem Marketplace, an information source for environmental markets. Prices have followed suit: After more than doubling between 2020 and 2022, the average cost of a carbon credit has since declined 14 percent, hitting $6.34 in 2024.

Yet buyers should not assume this state of affairs will persist, according to experts. New sources of demand are poised to disrupt the market, raising the likelihood of substantial price increases, particularly for high quality credits. 

“It is definitely worth looking at carbon markets now, because the period of time when there were cheaper options available is probably coming to an end as you see these various demand pools start to kick in,” said Sebastien Cross, chief innovation officer and co-founder at BeZero Carbon, a carbon credit ratings agency.

Four trends to watch

1. Nation states are entering the market

Proposals for an updated EU climate plan, released last week by the European Commission, require member countries to reduce emissions by 90 percent below a 1990 baseline by 2040. Critically for carbon markets, the commission suggested that credits equal to 3 percent of the 1990 total can be used to hit that target. 

The commission has not yet specified what kind of credits can be used, but demand from EU countries will likely absorb credits that would otherwise be available to corporate buyers. If countries max out their 3 percent allowance, just over 140 million credits would be used in 2040, according to an analysis of the proposal by the Oeko-Institut, a German research organization. That’s close to half the total number of credits issued in 2024, per Ecosystem Marketplace.

The commission’s proposals now need to be debated by member states. But another international agreement — Article 6 of the Paris Agreement, which was finalized at last year’s COP negotiations — is already being used by countries to trade credits: Last month, Switzerland and Norway became the first countries to use Article 6 to do so.

2. Compliance markets are spreading

Compliance markets are government-run schemes that require specific sectors to decarbonize and can include credit trading. They used to operate largely independently of the voluntary carbon market, but that’s changing as new compliance schemes pop up around the world. 

The spread is driven in part by the E.U.’s Carbon Border Adjustment Mechanism (CBAM), a tax on imported steel and other high-emission commodities that will take effect in January 2026. Companies exporting CBAM goods to Europe can avoid the levy if they have already paid a carbon price at home, which has prompted several countries to set up their own compliance schemes. Many of these allow companies to meet a fraction of their mandatory emissions reduction using carbon credits. In Singapore, the fraction is 5 percent; in Vietnam, 30 percent.

“These are small countries that don’t have that many emissions,” said Anton Root, co-founder of AlliedOffsets, which provides data on carbon markets. “But add them all together and you’re starting to look at the market growing in a pretty meaningful way.”

Japan is one of the largest economies to be developing a compliance scheme. Participation will become mandatory next year, with hundreds of companies accounting for more than half of Japan’s emissions involved. Companies in the scheme can use credits to offset up to 5 percent of annual emissions, which AlliedOffsets estimates could generate demand for around 40 million tons of credits annually.

3. Airlines will have to make big purchases

Airlines from the U.S., Europe and many other countries have to abide by the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), which requires them to cap their emissions at 85 percent of 2019 levels. Any growth above that baseline needs to be offset using CORSIA-approved credits. 

Based on likely emissions growth in aviation, airlines will require 37-58 million credits to comply in 2026, with the range increasing to 81-130 million in 2030 and 150-230 million in 2035, according to an Allied Offsets forecast shared with Trellis.

CORSIA has been slow to approve credits, prompting fears of price spikes even while demand ramps up. Prices for credits generated by the first project to meet CORSIA quality criteria and issue credits — a forestry scheme in Guyana — have grown from around $5 to more than $20 since the credits were issued in February 2024.

4. Tech is turning to credits to deal with rising emissions

Technology companies have set some of the most ambitious emissions reductions targets, but the need for new data centers to power AI products is one of several factors making those targets look increasingly hard to hit. Google’s footprint has grown by a half compared to its 2019 baseline; Microsoft, which wants to be carbon negative in 2030, has seen emissions grow 30 percent since it announced that goal in 2020.

Among the tech giants, Microsoft has been clearest in stating the role that credits will play in 2030: it expects to use “single-digit millions” of credits annually to meet that commitment, Brian Marrs, the company’s senior director of energy and carbon removal, told Trellis in April.

Other tech companies have been more cagey about future use of credits, but they’re also buying. Two recent purchases from forestry projects will bring Meta more than 3.5 million credits, and Amazon is a co-founder of the LEAF Coalition, which brings together governments and companies to combat deforestation. The coalition’s biggest deal to date is a $180 million investment in the Brazilian state of Pará that will generate 12 million credits.

How buyers are reacting

With prices set to rise and supply of higher-quality credits limited, some companies are moving now to secure offtake agreements for future projects. Microsoft is again the highest-profile example. “Nearly 100 percent of the carbon removal purchases announced in our current fiscal year will be delivered between 2030 and 2050 via long-term offtake agreements,” said Marrs. “We’re not looking at this sustainability report to sustainability report.”

Cross has seen that trend reflected at BeZero, where the bulk of the company’s work is now in helping clients assess projects prior to any credits being issued, rather in helping buyers in spot markets. “Given the state of the market today,” he said, “there are some cheap hedges available relative to where you’d expect to see carbon prices get to.”

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Six beach reads for the climate minded

We would never downplay the importance of sustainability science and policy, but come the dog days might we suggest foregoing white papers in favor of breezier, if similarly slanted, fiction? We view it as the ideal way to recharge and reflect on the values that drive sustainability professionals. And with that in mind, Trellis presents half a dozen (well, technically, eight) novels as elucidating as they are entertaining.

‘The Ministry for the Future’ 

By Kim Stanley Robinson 

In one of Barack Obama’s favorite books of 2020, an organization is formed under the auspices of the U.N. to tackle climate disasters. Blending fictional firsthand accounts with equally fictional policy memos and speculative solutions, “The Ministry for the Future” is daring in theme as well as form. As the Los Angeles Review of Books noted, the book is “asking a question that has typically been forbidden to ask: What if political violence has a role to play in saving the future?” In doing so, the novel doesn’t just imagine climate solutions, it confronts their moral and political implications as well. 

‘The Overstory’

By Richard Powers

With an ambitious storyline and far-ranging emotional scope, this Pulitzer Prize winner spans generations and landscapes, weaving together the lives of seemingly unconnected characters — each with a unique relationship to trees. The epic, as grand and intricate as forests themselves, is, as Benjamin Markovits wrote in The Guardian, “an astonishing performance.” 

‘Parable of the Sower’

By Octavia E. Butler

One of The New York Times’ Notable Books of the Year in 1994, “Parable of the Sower” continues to hold up. The novel follows a young woman, who suffers from “hyperempathy” in a California ravaged by climate change and economic collapse, as she leads a group of fellow survivors north and develops a new belief system along the way. Butler’s masterwork is a powerful story about resilience, adaptation and the drive to build something better. 

‘Flight Behavior’ 

By Barbara Kingsolver

“[C]omplex, elliptical and well-observed,” is how The Guardian’s Robin McKie described this novel. Sitting in the top slot of USA Today’s “10 Books We Loved in 2012” list, the book follows a young housewife in rural Appalachia who discovers an anomalous migration of monarch butterflies that quickly draws the attention of scientists and the media. Interrogating climate change and class, the novel presents a tale of self-discovery alongside a reckoning with ecological and social truths.

‘The MaddAddam Trilogy’

By Margaret Atwood

The books in “The MaddAddam Trilogy” — “Oryx and Crake,” “The Year of the Flood” and “MaddAddam” —explore a world shattered by environmental catastrophe. With its plagues and floods, corporate corruption and transgenic creatures, the series probes the consequences of scientific ambition and ecological neglect — not to mention the human capacity for destruction and reinvention. James Kidd of The Independent noted that the trilogy “is not always a pretty picture, but it is true for all that.”

‘Birnam Wood’ 

By Eleanor Catton

This international bestseller follows a guerrilla gardening group in New Zealand and its uneasy alliance with a tech billionaire who claims to support their cause. It’s a sharp eco-thriller where competing motives collide, exposing the fault lines between environmental idealism and the will to survive. The novel made Time’s “100 Must-Read Books of 2023” and was described by Kirkus as a “blistering look at the horrors of late capitalism [that] manages to also be a wildly fun read.”

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How the anti-ESG movement is reshaping corporate sustainability reports

The opinions expressed here by Trellis expert contributors are their own, not those of Trellis.​

Here’s a counterintuitive truth: just as sustainability reports became ubiquitous — 90 percent of S&P 500 companies publish detailed ESG disclosures — they also became controversial. The anti-ESG backlash has turned what seemed like straightforward progress in companies reporting on their sustainability efforts into a complex strategic puzzle. And that’s created an unexpected paradox for investors: Sustainability reports may be more valuable than ever, but for entirely different reasons than their creators intended.

The scale and impact of political pressure

The numbers reveal a dramatic investor retreat. ESG funds suffered significant withdrawals in the first quarter of this year, with more than $8 billion globally being taken out and $6 billion of that from U.S. investors alone. Shareholder resolutions dropped this proxy season, with 25 percent of filed proposals failing to reach ballots due to higher regulatory bars that now require proponents to demonstrate ESG issues and company efforts are “significant and economically relevant.”

The linguistic retreat in company reports is equally striking. Research from AlphaSense shows DEI mentions dropped nearly 70 percent  at U.S. firms, while climate change references fell 30 percent. Companies are in full-on “green-hushing” mode, maintaining sustainability programs while avoiding explicit ESG language.

Yet corporate sustainability reporting hasn’t decreased. If anything, it’s become more detailed and standardized, driven by regulatory requirements that persist despite political pressure. The U.S. Security and Exchange Commission’s March decision to stop defending climate disclosure rules has created a complex landscape where some companies continue detailed environmental reporting while others scale back.

The hidden value in corporate contradiction

The anti-ESG movement has inadvertently created a natural experiment revealing which companies are genuinely committed to sustainable practices versus those simply following trends. This filtering effect generates more reliable ESG investment signals because it helps investors determine which companies are virtue-signaling as expedient versus those genuinely on a path toward improved outcomes for people and planet.

Consider persistence: 79 percent of Russell 3000 companies receiving shareholder resolutions this year have faced them in the past five years. This concentration suggests activist investors continue targeting the same firms — either companies with persistent governance issues or those representing particularly impactful engagement opportunities.

More telling is what survives. Greenhouse gas emission-related resolutions remain among the most common shareholder proposals despite the overall environmental proposal decline. These surviving initiatives primarily request enhanced disclosure on emissions reporting, climate transition plans and progress on reduction strategies, which suggests climate concerns retain core investor interest even amid political pressure.

Companies maintaining robust sustainability reporting despite potential backlash signal something crucial about their long-term strategic thinking. They’re essentially saying, “We believe these practices create value regardless of political fashion.” Studies show companies that maintained ESG commitments during politically motivated pressures and scrutiny tend to have stronger financial performance over longer horizons; not necessarily because ESG practices directly drive returns, but because maintaining consistent strategic direction despite external pressure correlates with management excellence.

Reading between the lines

The anti-ESG environment has also made sustainability reports more informative by forcing companies to demonstrate actual value rather than virtue signal. When every disclosure carries potential political costs, only strategically important initiatives survive the regulatory gauntlet.

Smart investors now read these reports like organizational psychologists. A company quietly implementing water conservation measures while avoiding climate rhetoric tells a different story than one prominently featuring carbon neutrality goals despite potential backlash. Both might create value, but through different strategic approaches reflecting different risk tolerances and stakeholder priorities.

The SEC’s heightened standards may have inadvertently improved sustainability initiative quality. Companies can no longer rely on superficial commitments — every disclosure must justify its strategic importance. This creates a more rigorous framework where sustainability reports reveal organizational capabilities rather than corporate values.

What’s more, the backlash has fundamentally changed activist investor approaches. While total proposals declined, the focus has shifted from environmental advocacy to governance mechanisms. Companies receiving five or more proposals dropped from nearly two dozen in 2024 to just 10 in 2025. Activists are becoming more selective, focusing resources where they can demonstrate clear business cases.

Crucially, much engagement has moved behind closed doors. As Milla Craig of investor consulting firm Millani notes that investors aren’t backing off on the integration of ESG; they’re having these conversations privately rather than through public proxy battles. This shift from public confrontation to private engagement may prove more effective, allowing companies to address concerns without headline risk.

The bottom line

Political pressure has created a paradox: by making sustainability costly to discuss, it may have improved ESG investing by forcing companies to demonstrate genuine business benefits rather than good intentions. The result is a more nuanced framework for using sustainability reports in investment decisions.

Valuable reports now clearly connect environmental and social practices to business outcomes — how water efficiency reduces costs, employee engagement improves productivity or supply chain transparency reduces regulatory risk. This shift has made sustainability reports more rigorous and valuable for fundamental analysis.

The key insight: Focus less on what companies say about their values and more on what their actions reveal about strategic thinking and operational capabilities. When companies maintain environmental disclosures despite potential backlash, it’s likely because those practices are genuinely integrated into operations. When they abandon initiatives at the first sign of pressure, that reveals strategic commitment and risk management capabilities.

For investors, the lesson is clear. Sustainability reports remain valuable sources of investment intelligence, but their value comes from organizational insights rather than corporate virtue signaling. In a world where every disclosure carries political risk, only the most strategically important information survives — and the most valuable conversations may be happening behind closed doors rather than in public proxy battles.

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