New U.S. Accounting Rule to Establish How Companies Record Environmental Credits

The Financial Accounting Standards Board (FASB) has released its first U.S. accounting standard for environmental credits, including carbon offsets, renewable energy certificates, cap and trade instruments, and emissions allowances. This marks a turning point in how these assets are recognized, measured, and reported in corporate financial statements.

Until now, the absence of clear rules led to inconsistencies across industries. Some companies expensed credits immediately, others treated them as assets, and disclosure practices varied widely. By setting a unified framework, FASB is providing greater transparency for investors, reducing uncertainty for businesses, and signalling that environmental credits have matured into a mainstream component of financial stewardship.

The new rules, effective for public companies in 2028 and private companies in 2029, will require organizations to carefully evaluate how they acquire, track, and account for environmental credits. Recognition and impairment testing will now directly affect balance sheets and earnings reports, and disclosure of usage and impacts will become part of the story companies tell to their stakeholders. This creates both a challenge and an opportunity. On one hand, businesses will need to strengthen internal controls, data systems, and governance processes to meet the standard. On the other, they will have the chance to demonstrate how sustainability strategies align with financial performance in a way that is credible, consistent, and trusted.

This is where assurance partners become critical. Independent verification of carbon offsets, renewable energy certificates, and broader sustainability data helps ensure that what is reported under the new standard reflects reality, not just aspiration. At Intertek, we see this as more than a compliance exercise. Robust systems for tracking and verifying environmental credits do more than satisfy accounting requirements; they build trust with investors, customers, and regulators. By combining technical expertise in carbon accounting with deep experience in assurance and certification, organizations can turn regulatory readiness into a strategic advantage.

The introduction of this standard is a signal of what is to come. Sustainability will continue to embed itself deeper into financial systems, shaping investment decisions and corporate strategy. Companies that act early will not only be ready for 2028 and 2029. They will be positioned to lead in a market that increasingly demands both transparency and accountability.

Intertek can support companies on this journey. From carbon footprinting and emissions verification to renewable energy certification services and sustainability reporting, we help organizations prepare today for the standards of tomorrow. With the right systems and trusted assurance in place, businesses can not only comply with FASB’s new requirements but also build the credibility and confidence that drives long-term growth.