AllianceBernstein Holding LP
06/27/2022 | Press release | Distributed by Public on 06/28/2022 11:58
Are Carbon Offsets the Next ESG Investing Frontier?
Carbon offsets occupy a relatively small space on the spectrum of environmental, social and governance (ESG) issues. But as more countries and companies commit to net-zero carbon emissions goals, they're steadily gaining attention from investors as a tool to accelerate carbon reductions. Growing demand has fueled record-high prices in some markets.
Companies have relied on offsets to help avoid or reduce emissions for decades. Long associated with the "cap and trade" (compliance) market, they're traded globally in two ways: as allowances among companies to comply with mandatory emissions caps or as part of various abatement initiatives in the voluntary markets. Offsets are generated through carbon-reduction activities across two broad categories: industrial and nature-based. Solar and wind power, for instance, are examples of industrial initiatives to avoid carbon emissions while tree planting is a nature-based carbon removal initiative (Display).
Companies have relied on offsets to help avoid or reduce emissions for decades. Long associated with the "cap and trade" (compliance) market, they're traded globally in two ways: as allowances among companies to comply with mandatory emissions caps or as part of various abatement initiatives in the voluntary markets. Offsets are generated through carbon-reduction activities across two broad categories: industrial and nature-based. Solar and wind power, for instance, are examples of industrial initiatives to avoid carbon emissions while tree planting is a nature-based carbon removal initiative (Display).