A fire in one particular forest can nullify a carbon project for which the company has been planting and reporting for years. Until recently, such a scenario seemed exotic for a risk manager, but now the climate has entered the column of corporate risks along with the exchange rate and the Central Bank rate, and the forest has turned from a charitable “green background” into an asset that brings money and reputation to some, while others are losing capital.
Climate rewrites corporate risks
Previously, the climate was mentioned only in the section of the annual report on social responsibility, next to the photos of the subbotnik. Today it moved into the risk model. The reason is simple: climate threats have come at a price, and it is visible in the PNL report.
The risks fall into four groups.
- Financial. Direct losses from extreme weather and more expensive capital for companies with high emissions. Investors put a carbon profile in the valuation, and a borrower with a dirty balance gets paid more.
- Operating. Heat waves, droughts and floods are hitting supply chains, infrastructure and the availability of raw materials.
- Reputational. Investors and consumers are demanding a coherent climate stance, not declarations.
- Regulatory. Mandatory climate reporting and limits for high-carbon industries.
The regulatory part has ceased to be voluntary. IFRS S2 (International Financial Reporting Standard), which entered into force in 2024, requires disclosure of physical climate risks, energy transition risks, the impact of climate on financial performance, strategy and long-term sustainability. For large companies, climate reporting is becoming as routine as financial reporting. And since it needs to be shown, compensation mechanisms are moving from the area of goodwill to the area of managed obligations.
This is where interest in the forest arises. If emissions have to be disclosed and explained, businesses need a tool that absorbs carbon, is recordable and works for reputation. The forest meets all three conditions at once.
Why the forest has become a financial instrument
The forest has long ceased to be only a source of wood and a place for a picnic. In today’s climate economy, it is like infrastructure to remove carbon from the atmosphere. According to the World Resources Institute (WRI), forests and other natural ecosystems absorb about 30% of anthropogenic carbon dioxide emissions annually. The mechanism, as conceived by nature, is free, but fragile: fires, degradation and felling quickly eat up the effect. In 2023-2024, the effectiveness of the global forest carbon sink dropped to a minimum in two decades.
At the same time, recovery is actively working. A study in the journal Nature Communications (2025) found that over the period 1981-2019, new forests produced an additional uptake of about 1,559 Tg (terograms) of carbon, while deforestation losses were 1,544 Tg. The increase almost blocked the decline. The authors conclude that it was the restoration of forests that became the main factor in a positive carbon balance with land use change.
It was from this arithmetic that the asset was born. The project to restore or preserve the forest produces carbon units with which the company covers part of its emissions. The benefit is double: the carbon footprint decreases and at the same time an asset is created on the balance sheet. Forest is part of the climate portfolio as an element of adaptation and mitigation rather than a one-off action for a press release. In fact, a hectare of plantings begins to behave like a long-term investment with a payback period, documents and measurable returns.
How they do it in the world
The reference point in scale is set by the tech giants. Microsoft intends to become carbon negative by 2030 and offset all historical emissions since its founding by 2050. For the sake of this, the company enters into multi-year contracts for carbon removal and finances projects for the conservation and restoration of forests and natural ecosystems. In a 2025 report, Microsoft said it had protected more than 6,394 hectares of natural areas through its own biodiversity conservation program.
Apple is heading the same course, but through a financial mechanism. In 2021, the company, together with Conservation International and Goldman Sachs, launched a $200 million fund that invests in forest projects and receives verified carbon credits from them.
Projects in Brazil and Paraguay are aimed at restoring about 150 thousand acres of forests and removing up to 1 million tons of carbon dioxide per year. By 2030, Apple and its suppliers expect to remove 9.6 million tons of carbon annually, and the Apple 2030 plan itself assumes neutrality and a 75% reduction in emissions by the 2015 base. The logic of both corporations is common: buying ready-made loans on a tight market is expensive and risky, so it is easier to enter projects at an early stage and control their quality.
Everyone has the same common denominator: compensation through the forest is counted only when there is a verifiable methodology behind it. Otherwise, it is greenwashing, and the market punishes it more severely.
Durability is more important than forest area volume
This is the most inconvenient for the industry. The main question of the carbon unit market is not “how much carbon the forest will store,” but “how long this carbon will hold in it.” The tree, which will burn in fifteen years, will return the stored carbon back to the atmosphere, and the project will turn into a fiction.
The study in Nature Communications (2025) points directly: climate scenarios often underestimate the risk of carbon loss from fires, droughts and pests. The authors propose to include the likelihood of loss of accumulated carbon in the assessment of economic efficiency, because it is the longevity of storage that becomes the key factor in the value of a natural asset. The model, published in 2023 and trained on 7 million satellite fire observations, predicts an increase in the risk of fire exposure to forest carbon projects by about 55% by 2080 under a medium emission scenario (SSP2-4.5).
The breed composition of the forest is also important. A study in Nature Climate Change (2026) showed that deciduous forests, with an equal area of fire, lose less than half of the carbon compared to conifers. Simply put, the composition of the landings also has a price: resistance to fire is laid at the design stage, and not after the fact.
Hence the practical conclusion for the customer: to evaluate a forest project by one indicator “how many hectares have been planted” is like evaluating a bond only at face value, ignoring the issuer’s credit risk. The real cost of the project is determined by whether the planted forest will survive the coming decades.
How the forest is measured
The demand for reliability inevitably pulled the technologies for monitoring forest areas. The state of forests today is monitored by satellite remote sensing, lidar, machine learning algorithms. Such a set allows to see the area of fires, illegal logging and the amount of stored carbon in almost real time. Monitoring has ceased to be an annual manual inventory, it has become continuous.
True, the technique does not negate the data quality problem. The 2025 study analized 1.29 million reforestation sites from 45,628 projects worldwide. About 79% of geo-related sites had at least one sign of inaccuracy of spatial data, and 15% of projects did not give machine-readable coordinates at all. In other words, a significant part of the global portfolio of forest projects does not pass the elementary check “show where your forest grows.” This was one of the reasons for the tightening of verification requirements.
For the Russian market, the conclusion is direct: transparent geo-referencing and open reporting for each site is not a bureaucracy, but a condition that gives the project generally some tangible cost.
What is important for Russian business
Russia holds the world’s largest boreal forests, and this is both its strong map and vulnerability zone. The legislative framework is set by Federal Law No. 296-FZ “On the Limitation of Greenhouse Gas Emissions.” Since September 1, 2022, a register of carbon units has been operating, the operator is the Kontur joint-stock company with the support of Gazprombank and the Moscow Exchange. At the same time, the first climate project was registered and the first 96 carbon units were released, and to date, there are already about forty active projects in the register.
Forest projects in this portfolio are still rare, but large. In the Krasnoyarsk Territory, RUSAL Krasnoyarsk Joint-Stock Company conducts aviation protection against fires on an area of more than 500 thousand hectares: in 2019-2033, the project should increase its absorption by about 5.2 million tons of carbon dioxide. The deal market also came to life. The Udokan Copper company was the first to write off carbon units to compensate for emissions back in September 2023, and in 2024 Norilsk Nickel bought units from the climate project. Demand is being formed because the goals for carbon neutrality by 2050-2060 have already been announced by Rosneft, En+ Group, Tatneft, X5 Group, S7 Airlines and others. The infrastructure for the domestic market for carbon units has already been assembled, and forest climatic projects are a priority area for its development.
The flip side is that the climate hits the forests themselves. According to data from Nature Communications, in 2015-2022, severe fires affected about 15.7 million hectares of operational natural forests and 1.4 million hectares of forest plantations. For the temperate zone, the probability of catastrophic fires on plantations was about twice as high as in natural forests. The effectiveness of the project no longer depends on the volume of planting, but on the quality of forest management over the entire horizon of the project.
What should companies do of this?
- Decompose climate risks into four groups and understand exactly where businesses are losing money on warming and climate change.
- Build compensation through carbon units and reforestation into the decarbonisation strategy, rather than keeping it a separate line “on ecology.”
- Treat the forest project as a risk asset: require methodology, geo-referencing, breed composition for fire resistance and a long-term management plan.
This is where a specialized operator and partner comes in handy. Reforestation eco-services take over the project documentation for each hectare, the planting itself and transparent reporting on it, removing from the customer the very problem of reliability, due to which the world market rejects most of the projects. A company that recognizes the forest as a financial instrument and climate risk at the same time wins in money and reputation. The one that continues to consider it a decoration for the report will sooner or later lose the invested capital.
By Alexander Chikin, Director of Sustainable Development of the Save the Forest eco-service