Is EthicStream a good investment?
/EthicStream is providing investors access to the fast-growing carbon credit market, which is expected to grow to $50 billion by 2030. The company buys high-quality, verifiable carbon credits at a bulk discount and resells them at a premium.
But is EthicStream’s stock worth the risk? Keep reading to determine for yourself.
What are carbon offsets?
As an investor, especially investors who care about green technology, it’s important to understand the industry before diving in with your dollars. In case you’re not familiar with carbon offsets, here are some quick insights.
Carbon offsets are created by activities that remove carbon from the atmosphere. Most companies generate carbon dioxide that goes into the atmosphere. Companies buy carbon credits to offset the carbon that they emit. Each carbon credit represents one ton of carbon that was removed from the atmosphere, so a company that emits 1,000 tons of carbon would need to buy 1,000 carbon credits to balance its emissions.
Carbon credits, also known as carbon offsets, are one tool that companies are utilizing to reach net zero by 2050. The Paris Agreement declares that carbon emissions must reach net zero by 2050 to reduce global warming.
Some of the biggest companies in the world have already committed to net zero emissions by:
2030: Apple, Facebook, Burger King, Ikea, Microsoft
2040: Pepsi, Unilever, Vodafone, Visa
2050: Nestle, Qanta, Barclays, BP & Shell
Carbon offsetting is a part of the solution for reducing the impact of pollution because climate change is a non-localized problem. In other words, since greenhouse gases mix throughout the entire global atmosphere, reducing them at any location contributes to overall climate protection.
The carbon offset market is on track to hit $50 billion by 2030. According to BloombergNEF, carbon credits could be worth $120 per offset by 2050.
Are carbon offsets a form of greenwashing?
Opponents of offsetting say it is a form of greenwashing because they believe it allows companies to avoid cutting their emissions while still being able to make carbon-neutral claims.
However, others say if offsetting is done properly then the emissions are effectively balanced out. Offsetting helps companies to balance their emissions while providing funds for sustainability projects that reduce emissions.
EthicStream and green investing
EthicStream buys large volumes of premium credits and sells them to companies seeking to balance their emissions.
The problem is that there are not enough carbon credits to meet the needs of companies seeking to offset emissions. Worse yet, most of the available credits are not reliable. Currently, 95% of the carbon credit/offset market is undersupplied and saturated with fraudulent or low-quality carbon credits.
EthicStream helps to solve this issue by supplying large volumes of high-quality, reliable carbon offsets from leading Carbon credit producers like its partner, CarbonEthic. CarbonEthic goes beyond the industry standard third-party verification, leveraging industry-leading data and monitoring to give buyers a clear snapshot of the performance of their credit–right from the source.
This provides purchasers with the ability to verify that their carbon credits actually did remove carbon from the atmosphere so that the purchasers can confidently demonstrate their sustainability investment to their shareholders, customers, and other stakeholders.
CarbonEthic aims to have 100 million hectares of forest under management by 2030. This provides EthicStream with a large pipeline of credits to buy at discounted prices, positioning EthicStream to scale as the carbon market continues to surge. .
Is EthicStream a good investment?
If you’re wondering, “should I invest in EthicStream?”, at Money & Mimosas we encourage you to ask yourself three questions:
What are the potential roadblocks?
What is the potential growth or upside?
How does this align with my values and/or overall investment strategy?
The biggest roadblock we see for EthicStream is the overall adoption of carbon credits as an industry. Carbon offsetting and greenwashing are frequently mentioned in the same conversation. Therefore, it is possible that using carbon offsets could turn into negative publicity for companies that claim to be sustainable. If negativity swirls around carbon offsets, this could cause companies to avoid carbon credits as an option. Only time will tell how the perception of carbon offsets will evolve.
The potential growth and upside for EthicStream are promising. There is a big push by regulators across the globe demanding that companies and countries move to net-zero. McKinsey expects the carbon offset market to grow to $50 billion by 2030 and $550 billion by 2050. Overall, there are positive signs for success given the rapidly growing carbon market and EthicStream’s strategic partnership with CarbonEthic.
When it comes to your values, we encourage you to research the team, and the company’s overall stance on the environmental + social causes you care about, and conduct your own due diligence on how EthicStream could fit into your portfolio with your other green stocks.
How to invest in EthicStream stock
EthicStream is currently offering shares at $10 per share. The minimum investment is $500.
The process of investing is really easy. You head over to EthicStream’s campaign page and enter your email information into the invitation box. From there, the website will walk you through the seamless process of becoming an investor in EthicStream.
