Function, asset and risk (FAR) analysis is a mainstay of transfer pricing analysis. Through Pillar One, the OECD acknowledges the need for a new taxing right for market [M] jurisdictions (i.e. it aims its trajectory towards FAR[M] analysis). However, in the authors’ view, there is a need for a tectonic reform in transfer pricing to account for the negative externalities (for instance, environmental and climate risk) in transfer pricing analysis in order to support developing economies in achieving sustainability goals. For this purpose, the authors have suggested a thought-provoking concept of FARME (i.e. function, assets, risk, market and externalities) analysis, including how such externalities should be factored into the transfer price.