Achieving Net Zero Goals is Difficult, But These 4 Stocks are Succeeding with Carbon Credits

October 12, 2023 - Baystreet.ca


The market is witnessing surging demand from big companies with Net Zero commitments. In order to get there, many must rely on carbon credits to achieve their goals as they reduce their own footprints. In 2021 the Global Carbon Markets surged to a record $851 billion, and is slated to grow at a CAGR of +30% to reach $2.4 trillion through 2027. Here now are FOUR stocks that are succeeding in progressing towards their own Net Zero commitments, helped along the way by voluntary carbon credits: Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL), Apple Inc. (NASDAQ:AAPL) (NEO:AAPL), BlackRock, Inc. (NYSE:BLK), and Microsoft Inc. (NASDAQ:MSFT) (NEO:MSFT).

Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL)

Google’s parent company Alphabet has also been aggressive in its sustainability plans. Because the company’s operations produced the equivalent of more than 6.7 million tons of CO2 last year, Google had to offset with renewable-power purchase agreements and carbon credits.

In April, Alphabet joined fellow tech giants, Stripe, Meta, and McKinsey Sustainability to launch a $925-million, 9-year advance financing commitment called Frontier that will accelerate the development of carbon removal by 2030.

The company boasts it has been carbon neutral since 2007, because of offsets. In 2017, Google became the first major company to match all of its yearly electricity use with renewable energy.

However, Fidelity Investments, a Boston-based financial services company has claimed that Google didn’t account for an estimated 29,505 mtCO2e in 2020 from its 49,000 employees that worked remotely that year.

Google responded that it estimated 56,000 mtCO2e in 2020 from remote work by its 135,000 employees that year, and that its goal to operate on 24/7 carbon-free energy by 2030 doesn’t apply to remote work. That said, Alphabet purchased carbon credits to offset home-office emissions.

Apple Inc. (NASDAQ:AAPL) (NEO:AAPL)

The largest company in the USA by market cap, Apple has actively answered the call for climate action, pledging to be 100% carbon neutral for its supply chain and products by 2030.

Ahead of last year’s UN Conference of Parties (COP26), Apple added 9 gigawatts of clean power and doubled its supplier commitments. Earlier this year, the electronics giant invested another $4.7 billion in Green Bonds to support innovative green technology, including plans to use the world’s first commercial-purity low-carbon aluminum from ELYSIS in the iPhone SE.

Most recently, Apple called on its global supply chain to join in decarbonizing by 2030. While the company is working towards reducing its carbon footprint, it still admits to relying on carbon offsets to hit its 100% carbon neutral claim.

BlackRock, Inc. (NYSE:BLK)

Behind the scenes, the world’s largest asset manager, BlackRock has created a new unit called Transition Capital, with the goal to boost investments to shift to a low-carbon economy.

Managing around $8 trillion in assets, BlackRock’s actions come with a gravitational pull that makes waves in the markets. According to the company’s accompanying memo, BlackRock’s overseers of sustainable investing said the following: “We believe many hundreds of billions, even trillions of dollars per year, will be invested through the transition and we have spent the past several years becoming a global leader in transition investing to ensure our clients have the tools they need to navigate it.”

According to the memo, the new unit’s goal is to be the global leader in transitioning portfolios, businesses, and countries to a low carbon economy.

Microsoft Inc. (NASDAQ:MSFT) (NEO:MSFT)

Computer competitors Microsoft have also been active buying carbon-related credits, through a carbon removal credits deal with Heirloom in August, and signing a carbon credits deal with Ontario Power Generation (OPG) in September, to procure Clean Energy Credits sourced from OPG’s carbon-free hydro and nuclear assets on an hourly basis.

“Agreements like this one with OPG will help Microsoft move closer to achieving our sustainability commitments, including our goal of having 100% of our electricity consumption, 100% of the time, matched by zero-carbon energy purchases by 2030.” said Chris Barry, President, Microsoft Canada. “Working closely with like-minded organizations like OPG, will help us move toward a more sustainable future, while continuing to power innovation in Ontario.”

Microsoft has also worked to create its own Microsoft Cloud for Sustainability to help companies speed up their sustainability efforts.