The risk of countries nationalizing carbon sequestration/offset assets continues to grow. Or more accurately, its pace continues to pick up. Bloomberg just reported:
“During a conference last week in southern Africa, Malawi and Zambia confirmed they will follow Zimbabwe’s lead and demand that a share of revenue from carbon offset projects on their territory go to state coffers. Zimbabwe in May roiled the industry by announcing overnight that 50% of all revenue from programs in the country will go to the state.”
This is another reminder that companies need to review and update assumptions that are embedded in their climate/carbon risk management plans to keep up with rapidly changing – and significant – issues. Public companies with (or purchasing) significant carbon offsets in Africa also may want to give some thought to this nationalization trend when they draft the risk factors disclosure in their SEC filings. And if you aren’t already sure about where your purchased nature-based offsets physically originate from, you need to find out – what you find out may also warrant consideration in SEC risk factor disclosures.