StanChart, DBS Team Up With SGX, Temasek to Launch Carbon-Credit Exchange

By Fabiana Negrin Ochoa

Lenders Standard Chartered PLC and DBS Group Holdings Ltd. will partner with Singapore's exchange operator and state investment firm Temasek Holdings to establish a carbon-credits marketplace that aims to help companies play a role in global climate mitigation.

The companies said Thursday that they would launch an exchange and a marketplace, to be known as Climate Impact X and based in Singapore, by the end of the year.

CIX will facilitate the sale of carbon credits mainly among multinational corporations and institutional investors.

"Climate Impact X will provide a solution for corporates to address unavoidable carbon emissions in the near term and propel the development of new carbon-credit projects world-wide," Mikkel Larsen, DBS's chief sustainability officer and interim chief executive of CIX, said.

Carbon credits are essentially a form of tradable permit or certificate that let the holder emit a certain amount of greenhouse gases. If a company doesn't use up its allowance, it can then trade that credit.

At a press event, the companies acknowledged the complexities of carbon credits and the questions that have been raised regarding their efficacy in the fight against climate change.

"The concerns that have been expressed in this forum and elsewhere are legitimate. The questions about the way that carbon credits have been used, and the way that corporations offset," StanChart Group CEO Bill Winters said. "And there have been questions about the underlying standards that have been applied...questions about the transparency of the market," he said.

The aim of CIX is to address these concerns by using satellite monitoring, machine learning and blockchain technology similar to that used in cryptocurrency to boost the transparency and quality of carbon credits, while ensuring they deliver a tangible environmental impact.

The companies say a system of high-quality credits could help bridge the gap left by low-carbon technologies as countries and companies pivot away from fossil fuels to try and reach the Paris climate-change goals set in 2015.

"The only way that we can practically do this is to use offsets to get money from the hands of people like us and DBS and Temasek and SGX...from the hands of us that are making zero [carbon] commitments into the hands of the people that can actually reduce the carbon in the environment," Mr. Winters said. "And this is exactly the marketplace and the exchange that CIX is set up to deliver," he said.

Write to Fabiana Negrin Ochoa at [e-mail]

(END) Dow Jones Newswires

May 20, 2021 09:24 ET (13:24 GMT)

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