REPORT

Carbon Markets, Tokenisation and the Enterprise Data Challenge

Meeting the Climate Challenge

The pressure is mounting for a wide range of organisations to make a measurable contribution towards global net zero targets. And while regulatory focus is squarely on compliance carbon markets, consumer and investor interests are the driving force behind the activity of large consumer brands in the voluntary market.

This is evidenced by the fact that B2C companies dominate the top 10 buyers in voluntary carbon markets, which comes as a direct response to the rapid rise in consumer preference for sustainable products over the last two years.

Against this backdrop of rising demand, the time is right is for a wide range of organisations - from airlines, telecommunications and consumer goods manufacturers, to retailers and financial service providers - to take the lead.

This Meeco report outlines some of the key questions about carbon markets for brands starting down this path and concludes with some practical steps that organisations can take to make a measurable difference.

What you need to know about voluntary carbon markets and how to get started
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Financial institutions taking the lead

Financial institutions are in the vanguard when it comes to ensuring confidence, transparency and parity in the voluntary carbon markets.

The newly established Carbon Meta Registry (CMR) is an online platform connecting registry systems worldwide. With transparency front of mind, the meta-registry intends to “leverage distributed ledger technology to enable companies, governments, traders, and brokers to access information on projects and credits across jurisdictions, programs, and standards”.

Alongside the World Bank, an impressive number of banks are involved in this and other initiatives, including a distributed ledger-based settlement platform.

The importance of ESG ratings

Investors are putting a higher priority on ESG-focused firms in their investment choices, which has shone a light on ESG ratings.

ESG ratings - also referred to as sustainability ratings or corporate sustainability ratings - represent a concerted effort by ESG rating agencies to measure corporate performance in and across environmental, social and governance criteria.

The potential for significant commercial gains from positive ratings has led to the practice of “greenwashing” (in which practices are overrepresented) and increased regulatory focus.

As policy matures and the processes for measurement evolve, the report identifies an important role that the tokenization of assets might play in delivering greater transparency.

Voluntary carbon markets

For corporate entities outside of the compliance market, reducing emissions and adopting a goal of carbon neutrality, remains voluntary. But in the wake of consumer preference and investor interest, there’s a growing minority of corporates in developed markets that have adopted voluntary net-zero pledges.

As with the compliance market, corporates in the voluntary market may reduce their avoidable emissions directly by switching to less carbon-intensive production while seeking to offset their unavoidable emissions by purchasing carbon offset credits.

While voluntary market offsets in most jurisdictions cannot be used in the compliance market to meet Kyoto Protocol compliance regimes, international compliance market offsets, called Certified Emissions Reduction Units (CERS), and voluntary market offsets, can be used by companies to offset their emissions voluntarily.


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Tokenization, Guardian and Hedera

The tokenisation of assets enables greater auditability, leading to improved transparency.

Guardian is an open-source tool that leverages the Hedera public distributed ledger network to mint emissions and carbon offset tokens. It provides auditable, traceable, reproducible records that document the emission process and lifecycle of carbon credits, helping to reduce fraud in the ESG market.

At the heart of the Guardian solution is a sophisticated Policy Workflow Engine (PWE) that enables the ability for applications to offer a requirements-based tokenization implementation.

How Trustury can support B2C enterprises net zero mandates

Discover tokens

Discover tokens across the Hedera ecosystem. Trustury works from any device and is available in light and dark modes.

Connect your wallet

Connect your Hedera wallet or Guardian accounts to explore tokens you own and to share with business partners, customers or friends.

Verify tokens

View public information about any token, including details such as sale price and transaction history.

Provenance

Drill deeper into a token's chain of trust by viewing its pre-minting history. Integration with Guardian allows you to verify a token's adherence to ESG standards and its associated verifiable credentials.

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Evolving regulation provides a clear path forward

Our report outlines that this is an emerging market, where uncertainty and opportunity can appear equally matched. But rather than wait for greater clarity we encourage all stakeholders to join the many strong examples of financial institutions and consumer facing brands and start down the net zero path now. Our view is that there is sufficient stability - and of course opportunity - to warrant immediate further exploration by organisations with retail customers.

To a large degree our view is shaped by evolving regulation, the maturity and flexibility of available technology, and growing customer demand. For example:

“This trial shows the practical benefits that digital identity can bring when solving everyday business issues, like massive lifts in convenience and productivity. By using the connectID network to deliver digital credentials sourced from the Department of Transport and Main Roads, these critical infrastructure employees and operators were able to save two days and get to work faster.”

Andrew Black
Managing Director, eftpos Digital Identity

"By using the Meeco mobile identity wallet in combination with Hedera’s proven distributed ledger technology we’re able to embed trust into the very forefront of necessary everyday interactions like credential checks. Enabling employees to participate transparently in the creation, access and permission of immutable identity, safety and compliance records was easy and fast. As a result, benefits such as time saving, and convenience were realised for all the workforce stakeholders.”

Katryna Dow
CEO & Founder, Meeco

“This trial shows the practical benefits that digital identity can bring when solving everyday business issues, like massive lifts in convenience and productivity. By using the connectID network to deliver digital credentials sourced from the Department of Transport and Main Roads, these critical infrastructure employees and operators were able to save two days and get to work faster.”

Andrew Black
Managing Director, eftpos Digital Identity

Digital Identity has been largely talked about as authentication and logins. Credentials like driver licences are still the dominant form of representing identity in the community. Linking digital credentials to a digital account creates a complete digital identity solution, and we are very grateful to be able to work with industry and businesses to prove and realise that vision.”

Chris Goh
General Manager
, Registration and Licencing Modernisation,
Queensland Department of Transport and Main Roads

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