CSRD, CBAM and 45V Rewire Climate Tech: Watershed, Tesla, ArcelorMittal Pivot on Compliance
A wave of climate disclosure and trade rules from Brussels to Sacramento is redrawing budgets and business models across Climate Tech. Software stacks, project finance, and supply chains are being rebuilt as enterprises brace for EU CSRD reporting, CBAM fees, and the U.S. hydrogen credit’s strict accounting rules.
Regulation Sets the Agenda
Europe’s Corporate Sustainability Reporting Directive (CSRD) quietly became the most consequential climate rule for global corporates in 2024, requiring granular, audit-ready emissions and risk data from roughly 50,000 entities, according to the European Commission. For multinationals with EU operations, the mandate is forcing finance and sustainability teams to converge on a single ledger for carbon—comparable to the way IFRS standardized financials. The compliance clock is already ticking for FY2024 reports.
Meanwhile in the U.S., the Securities and Exchange Commission’s climate disclosure rule—adopted in March—hit a legal speed bump when the agency paused implementation pending litigation, Reuters reports. For more on related esg developments. That hasn’t slowed state-level momentum: California’s SB 253 (emissions disclosure) and SB 261 (climate risk) move ahead with first reports expected in 2026 for applicable registrants, per CalEPA guidance. The practical result is that boards are budgeting for assurance-grade climate data, regardless of the SEC timeline.
Enterprises including Microsoft and Salesforce are expanding carbon accounting and audit features in sustainability clouds, while pure-plays such as Watershed and Persefoni report accelerated pipeline activity tied to CSRD and California requirements. Watershed closed a $100 million round in 2024 to scale its enterprise platform, as investors bet that compliance-driven demand will persist even through macro volatility. For software buyers, the procurement question has shifted from “why measure?” to “how defensible is the audit trail?”
Border Carbon Tariffs Redraw Supply Chains
The EU’s Carbon Border Adjustment Mechanism (CBAM) entered its transitional reporting phase in late 2023 and will start imposing financial liabilities from 2026 on imports of steel, cement, aluminum, fertilizers, electricity and hydrogen, the European Commission says. For heavy industry, that makes embodied carbon a line item that can swing margins—especially for exporters to Europe. Steelmakers such as ArcelorMittal and SSAB...