Your Next ESG Investment (Environmental, Social & Governance)
Awareness and demand for climate action amongst consumers and investors are higher than ever. Many companies have responded to this increasingly conscious consumerism and investing by announcing net-zero or carbon neutral goals to be hit in the next 10, 20, or 30 years.
Central to these commitments are environmental, social, and governance (ESG) principles. Adopting ESG principles and ESG initiatives is not just for a business’s public image, but also for their bottom line, regulatory compliance, and talent retention. In fact, choosing the right ESG investment strategies is crucial to thriving in our clean energy future.
Read on to learn how Terrapin Geothermics can help support your ESG goals.
Why Are ESG Initiatives Important for Investment Opportunities?
ESG principles are an increasingly common way for investors to evaluate a company's set of standards in the areas of sustainability, social and human capital, compliance and leadership. These factors have begun to play a larger role in investment opportunities as shareholders become more concerned with how an organization's eco-social practices affect long-term growth in a rapidly changing world that favors clean energy, diversity, and corporate responsibility. Those who wish to stay ahead of the curve and retain compliance with governmental regulations view ESG initiatives as an essential component of their business strategy.
Terrapin's teams work with financers like ESG funds to help deploy sustainable investment capital and develop clean energy projects. ESG investing criteria is broken down into three components:
Defining the E of ESG
The first of three ESG principles looks at the environmental impact of business. This may include your company’s energy usage, greenhouse gas pollution, waste, resource conservation and treatment of animals. Beyond operations, environmental ESG investing criteria may also look to the potential environmental risks of business, such as harmful emissions management and compliance with environmental regulations.
Implementing the E of ESG
Terrapin projects use heat to power technology to convert thermal energy resources into emission-free energy, which offsets a certain amount of carbon dioxide equivalent per year.
The ORC technology we use has a small surface area per megawatt footprint, minimizing its land use. It also uses air-cooled condensers, eliminating its water usage.
Defining the S of ESG
The social principle evaluates how a business interacts with external communities and internal talent. This can range from investigating if a company works with partners who uphold the same moral values, if work conditions demonstrate high regard for employee health and safety, or if jobs are equitably provided to areas that lack opportunities for stable employment.
Implementing the S of ESG
Our collaborative project development model works with many actors, often bringing local partners to the table to complete this energy diversification project. Terrapin projects can also help form local economic development opportunities, such as supporting industry growth and long-term job creation.
Defining the G of ESG
The third aspect that ESG investments consider is reassurance that your company is being governed ethically. Good governance can look like complying to policies that avoid conflicts of interests in board members, offer transparent accounting, do not engage in political bribery, and steer a business clear from illegal activities.
Implementing the G of ESG
Terrapin projects generate environmental attributes, which can be transferred to the heat resource owner to comply with internal and external emissions reductions mandates.
Carbon Offsets, Credits, and Other Environmental Attributes from ESG Initiatives
Our heat recovery and power conversion projects target the environmental aspect of ESG. Through our projects, companies can gain carbon offsets and credits that help them comply with ESG mandates and achieve their net-zero goals.
What are carbon credits and offsets?
You may have heard carbon credits and offsets being used interchangeably, and while there are some similarities, there is a distinction between the two. Both carbon credits and carbon offsets represent the emission of a certain amount of carbon into the atmosphere. A single offset or credit represents one metric tonne of carbon emissions or an equivalent amount of other greenhouse gases.
Carbon credits diverge in definition in that they represent the right to emit that carbon or greenhouse gas, whereas carbon offsets go directly towards the production of a certain amount of sustainable energy, counterbalancing the use of fossil fuels.
At Terrapin, our energy projects can generate both. We can create monetizable environmental attributes, such as emissions performance credits or carbon offsets, to help industries advance their net-zero goals.
To generate these environmental attributes, we use Organic Rankine Cycle technology (a type of heat-to-power technology) to produce emission-free energy. Depending on the jurisdiction and markets used, carbon offset opportunities can be developed through the conversion of a waste heat source to a usable form of power, the use of emission-free electricity onsite instead of more carbon-intensive grid power (fuel switching), or the application of direct heat use.
If the credits are transferred to the waste heat resource owner, they can use these to comply with their emissions performance and governance mandates.