Carbon Sink

A carbon sink is any natural system, such as forests, oceans, or soil, that absorbs and stores more carbon dioxide (CO₂) from the atmosphere than it releases. In climate finance, carbon sinks are critical to balancing financed emissions, informing transition and physical risk assessments, and shaping credible net-zero targets and forecasts. For investors, understanding the role and reliability of carbon sinks is essential to evaluating portfolio alignment, resilience, and long-term climate risk exposure.