Singapore Financial Quartet Founds Carbon Exchange

DBS Bank, Standard Chartered, Singapore Exchange, and Temasek recently announced the founding of a global exchange and marketplace for high-quality carbon credits. The joint venture aims to leverage satellite monitoring, machine learning, and blockchain technology to enhance the value of carbon credits available to organizations seeking to address hard-to-abate emissions. The founding of the exchange, known as Climate Impact X (CIX), is driven by a growing international focus on environmental, social, and corporate governance (ESG) initiatives seeking to mitigate the impacts of climate change and other global issues.

According to Mikkel Larsen, Interim CEO of CIX and Chief Sustainability Officer at DBS, "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 worldwide. With an initial focus on Natural Climate Solutions, the carbon credits will also create impetus to address another grave risk of biodiversity loss and help serve local communities. CIX will build on collective action by global governments, corporates and individuals to achieve a net-zero economy."

With global demand for high-quality credits in the voluntary carbon market estimated to increase up to 1.5 to 2 gigatons (GtCO2) annually (a fifteen-fold increase by 2030), the growing number of corporate climate commitments look to provide a vibrant marketplace, with strong impact on global carbon reduction. The move comes at a time of increased focus on corporate ESG initiatives, with investors and customers alike demanding tangible action on climate change.

CIX plans to offer a variety of platforms and products catering to the needs of different carbon marketplace participants. These offerings include the Exchange and the Project Marketplace, both with anticipated launches by the end of 2021. The exchange will facilitate the sale of large-scale carbon credits via a standardized contract process focused mainly on multinationals and institutional investors. The Project Marketplace looks to provide a broader spectrum of corporate entities with a curated selection of natural climate solution projects to assist in meeting sustainability objectives.

The exchange will be headquartered in Singapore, a well-known hub for financial and commodities markets, providing a strong base to position Singapore as a hub for carbon-related services as the market continues its explosive growth.