Identifying the environmental tactics that are not working will give rise to better ideas. Here are the ideas needing improvement. 

Planting trees to offset a company’s carbon footprint once seemed like a great idea. But today, Carbon Credits, Environmental Offsets, and ESG strategies have lost favor with a growing number of environmentally concerned companies.

The carbon market has seen a sharp drop in both sales and prices. New risks—including concerns about credit quality and evolving government regulations—have caused the decline. Several major buyers of Wildlife Works’ carbon credits have paused or canceled purchases. In response, the company scrapped $90 million in credits from its Congo-based project after the Congolese government introduced a new carbon accounting system.

Mike Korchinsky, a former management consultant who had an “epiphany in the African bush,” transitioned to wildlife conservation and became an advocate for carbon credits. These financial tools channel private funding into climate projects designed to prevent carbon emissions from entering the atmosphere. Companies or individuals buying the credits claim they reduce their carbon footprints by the same amount of carbon removed elsewhere.

But skepticism is growing. Critics say the math behind carbon credits is often unreliable, and many projects don’t deliver the climate benefits they promise. Companies have also been accused of using credits as a way to avoid cutting their own emissions. Lawsuits have followed—Delta Air Lines, for example, now faces legal scrutiny over its large offset claims. In turn, credit sales and prices have taken another hit this year.

Korchinsky’s company, Wildlife Works, issues credits from two conservation projects. One is in southeast Kenya, home to elephants and giraffes. The other is in the Democratic Republic of Congo, where bonobos and pangolins live in rainforest habitat.

To rebuild trust, Korchinsky now proposes a new standard for conservation—one that would eliminate the concept of offsets entirely. However, companies that purchase credits for offset purposes may reject this approach. He has also started promoting an alternative: tying credit purchases to emissions in a different way, without labeling them as direct offsets.

Carbon Offsets: Individuals and companies use them to compensate for their emissions by funding projects that reduce greenhouse gas emissions elsewhere. These projects include set-aside forests and solar and wind farms. 

Carbon Credits are part of a regulatory approach where companies are charged for their emissions, incentivizing them to reduce their carbon footprint.

ESG (Environmental, Social, and Governance) investing has been subject to criticism for various reasons:

1. Inconsistent and Lacking Disclosure: Critics argue that ESG disclosure is inconsistent and lacking, which makes it difficult to accurately assess a company’s ESG performance.
2. False Impressions: Some believe that ESG gives a false impression that markets can solve social and environmental problems.
3. Sacrifice of Returns: There is a concern that ESG investors sacrifice returns and create opportunities for non-ESG investors by sorting companies into good and bad buckets1.
4. Vague Concept: Critics argue that ESG is a vague and trendy concept that ignores the realities of fossil fuels and geopolitics.
5. Greenwashing and Dodgy Metrics: There are concerns about how to measure and implement ESG amid rampant greenwashing and questionable metrics.
6. Poor Business Performers: Some analysis suggests that investing in sustainable funds that prioritize ESG goals may actually be directing capital into poor business performers.
7. Politicization: The ESG strategy rankles some investors, especially those who view the now-politicized risk evaluation framework as a subjective, unethical form of virtue signaling
8. Detracting from Business Goals: Critics argue that ESG gets in the way of what businesses are supposed to do: make as much money as possible while conforming to the basic rules of society.

Criticisms exist; a number of companies in the investment community continue to see value in ESG investing due to its potential to manage risk and generate sustainable, long-term returns.

(Source facts from Wall Street Journal, Forbes, Harvard etc.)