CIBC and several other international banks have joined forces to launch the first ever blockchain platform for companies to purchase and sell carbon offsets.
The latest initiative, called Project Carbon, is created on the Ethereum platform, and will allow companies to voluntarily buy or sell carbon offsets, such as carbon capture, or forest and wetland protection, in order to compensate for greenhouse gas emissions they are unable to eradicate in their daily operations. The project is slated to commence in August as a pilot in order to test its technical, operational, and legal applications.
The latest carbon offset system is the first of its kind, and will also be managed by Britain’s NatWest Group, Brazilian-based Itau Unibanco, as well National Australia Bank. As CIBC explains, Project Carbon is designed to eliminate existing barriers to carbon offset buying, which has traditionally lacked transparency and uniform standards.
Clients that chose to take part in the program will be able to negate their carbon emissions by buying offsets targeting the protection of trees or promoting regenerative farming, or even invest in carbon capture technology. However, according to CIBC, the banks’ latest project is different from the compliance carbon market, where companies are required to adhere to mandatory climate targets imposed and regulated by governments.
By using the private Ethereum blockchain, clients will be able to take advantage of post-trade settlement, and their carbon credit ownership will be adequately recorded. This will make for easier reporting, as well as mitigate the risk of double-counting offsets. Project Carbon marks a broader move among major global banks’ efforts to nudge carbon emitting corporations to address the risks of climate change, particularly as the banks themselves look to rearrange their lending and investing portfolios to better coincide with CO2 emission reduction initiatives.
Information for this briefing was found via CIBC. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
