Energy & ESG: Finding a Middle Ground

PanXchange Blog

Environmentally conscious practices are necessary for the protection of our shared planet. This is an increasingly popular issue stressed by corporations, investors, government, and the general public. However, as a consequence, this often shines an unflattering light onto industries that have fueled human prosperity such as energy, transportation, and infrastructure due to their substantial carbon footprint. 

In the world’s quest for net-zero emissions, the voluntary carbon market has stepped up to the plate offering a real solution for all parties involved. Voluntary carbon credits are a way to connect climate-conscious companies and their emissions with companies that can successfully reduce or remove them from Earth’s atmosphere. By purchasing carbon credits, it allows a company to reduce or remove emissions they could not otherwise reduce or remove themselves, rewards market participants for regenerative practices, and channels investment towards alleviating climate change. 

However, it is important to be contextually appropriate about the nuanced interplay between environment and sustainability goals with other factors such as profit, politics, and impacts on consumers. On one hand, companies that fail to align with and achieve certain emissions goals could risk losing their social license to operate, lose access to investor capital, and even lower their company valuation. Conversely, the widespread adoption of climate incentives could drive up prices of goods and services, endangering access and affordability for consumers at an inopportune time. Rather than taking sides, PanXchange believes the conversation needs to consult all stakeholders and arrive at a contextually appropriate middle ground as the transition to net-zero is not one-size-fits-all.