Investors unimpressed by carbon offsets

Asset managers and institutional investors are looking past largely unregulated means of reducing emissions to companies implementing science-based targets

Investors are increasingly viewing the way non-energy companies are using carbon offsets to voluntarily decarbonise, often to hit net-zero targets, with a high degree of scepticism. A key issue is that carbon offsets are largely unregulated whereas the cap-and-trade schemes, such as the EU ETS, used by energy companies, utilities and related businesses are highly regulated. Eoin Fahy, chief economist and head of responsible Investing at KBI Global Investors, highlights this point, arguing that cap-and-trade schemes such as the EU ETS are “well regarded” by investors, “although in truth, from a theoretical economics point of view, a carbon tax would be preferable, while often politically much