Welcome back. The many events devoted to environmental causes at the World Economic Forum were largely overshadowed by fears of a downturn and a war that is scrambling the global energy map.

But one topic that created some buzz among panelists was the voluntary carbon market, which is expanding fast as more companies fund things like forestry projects to offset their emissions. M. Sanjayan, chief executive officer of Conservation International, said a flood of corporate cash has transformed his field. Three years ago, a big carbon project would invest $5 million in a single site, he said; now it would invest $200 million in five or 10 sites. 

"The barrier isn’t money," he said. "The real barrier right now is clarity." He said governments should set clear rules for the little-regulated market. 

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For now, the market continues to evolve rapidly with little oversight. There was enthusiasm on various panels about how technology such as satellite imagery can provide better data about the state of forests, allowing market participants to check that the forests they paid to protect are still standing. There were also warnings about potential unintended consequences from the current explosion of activity.

Speaking about forestry projects in the Amazon, Ricardo Hausmann, director of Harvard University's Growth Lab and a former Venezuelan planning minister, said rewards for tree-planting may backfire. "That's going to create a new incentive to deforest so that you can reforest, and you're going into a cycle," Mr. Hausmann said. The problem boils down to economics: Prices on offer for forest-preservation credits in Latin America, he said, are too low compared with the money that can be made by felling trees to raise cattle. 

This week: Crypto traders; inflation headwinds for carbon trading; 'Who cares if Miami is six meters underwater?'

Offset registry seeks to rein in crypto tokens. If you own a carbon credit, you can retire it from circulation to claim responsibility for the climate benefit of the project that generated it—tree-planting, say. But since last year, people have retired millions of credits from the largest credit registry and instead used them as backing for new cryptocurrency tokens. Verra, the nonprofit that runs the registry, now says it will stop allowing this practice, arguing that having an active market for crypto tokens that are based on retired carbon credits creates confusion. The move comes amid broader efforts to improve transparency in the market for carbon credits, which have hard-to-verify climate benefits. 

Carbon costs more, but inflation puts policy makers in a bind. Nearly a quarter of the world's greenhouse-gas emissions are now covered by a carbon price of some kind, but prices remain too low to rein in global warming and inflation could deter governments from imposing tougher policies that push up energy prices, the World Bank said. 

SEC proposes disclosure rules for funds. Regulators proposed new disclosure and naming requirements for investment funds that tap into worries regarding climate change or social justice, in an effort to address concerns about “greenwashing” by asset managers seeking higher fees. The Securities and Exchange Commission voted to issue two proposals that aim to give investors more information about mutual funds, exchange-traded funds and similar vehicles that take into account environmental, social and governance factors. One of the proposed rules, if adopted, would broaden the SEC’s rules governing fund names, while the other would increase disclosure requirements for funds with an ESG focus.

Don't sweat it, says HSBC responsible investing chief. HSBC Holdings suspended a senior executive who argued that investors didn’t need to worry about climate change and that policy makers were exaggerating the risks, according to people familiar with the matter. The comments from Stuart Kirk, the head of responsible investment and research at HSBC Asset Management, drew criticism from the bank's chief executive and other senior figures who stressed its commitment to climate action. 

🎁 HSBC's ESG aims. HSBC's mixed messaging undermines its effort to grow in the market for financial products that target environmental, social and governance benefits, said Clare Reilly, chief engagement officer at PensionBee, a U.K. pension provider that owns shares in HSBC through index funds. HSBC has said its asset-management arm “treats climate change risk as a key feature of the investment decision-making process,” and the bank has a target to provide $1 trillion of sustainable finance and investment by 2030. Even if Mr. Kirk's views aren't shared across the bank, "that failure of corporate strategic alignment is worrying," Ms. Reilly said.

—Ed Ballard

Ukraine war threatens shift, leaders warn. Europe’s scramble to wean itself off Russian energy will lead to new short-term investments in coal, oil and natural gas, energy and government officials said in Davos. Some also warned that the crisis may also give producers an opening to invest in longer-term fossil fuel projects. “We see a lot of people talking about a lot of things which I would have never guessed would be back on the table,” said Joe Kaeser, chairman of Siemens Energy, “like drilling in the North Sea.”

But net-zero pressure persists. TotalEnergies said it would buy a 50% stake in U.S. renewables company Clearway Energy Group in a deal worth about $2.4 billion, expanding its reach in the U.S. green-power sector. The move followed Total's $2.5 billion purchase of a 25% stake in India's solar-energy giant Adani Green Energy last year and its successful bid for offshore-wind rights for a site off the Carolinas in the U.S.

"What happened in reality was a very different situation." Three companies discuss their sustainability failures. (Greenbiz)

The European Union's defense agency wants to "measure and benchmark" the defense industry's contribution to sustainability. (Responsible Investor)

A lithium supply crisis could dent the world’s chances of meeting its climate goals. (Bloomberg) 

U.K. banks and insurers that fail to manage climate risks could suffer a 10% to 15% hit to their annual profits, the Bank of England said after conducting its first climate stress tests. (Financial Times) 

Four in 10 of the companies reporting to environmental disclosure group CDP have no information about the origins of the deforestation-linked commodities they buy. (Edie)   

Charm Industrial used plant waste to sequester thousands of tons of carbon. The question is scalability. (MIT Technology Review) 

The global shipping regulator is moving toward a carbon price for shipping emissions. (Climate Home) 

The future of oil production in California could hinge on a court hearing in Bakersfield scheduled for Thursday. (Politico)

How a French bank set the gold standard for climate action. (Quartz) 

Why not put solar panels in space? (Energy Monitor)