Carbonplace, the new carbon credit settlement platform jointly developed by some of the world’s largest financial institutions, has announced the successful pilot transfer of carbon credits through its system in collaboration with global payments technology company Visa.
The transaction, which involved Visa purchasing Verra-certified credits from Sustainable Carbon, a leading carbon credit project developer, represents a major boost for carbon markets. It demonstrates the capability of Carbonplace’s unique settlement technology to significantly increase the speed, efficiency, and security required to support the growing demand for voluntary carbon credits, and in doing so, to more effectively drive private sector capital towards global climate solutions.
The transfer was facilitated by two of Carbonplace’s founding banks, National Australia Bank (NAB) on behalf of Visa and Itaú Unibanco on behalf of Sustainable Carbon. It underscores how the institutions behind Carbonplace – which also include BNP Paribas, CIBC, NatWest Group, Standard Chartered, and UBS – can collaboratively leverage their existing infrastructure, including know-your-customer and anti-money laundering procedures, to address some of the challenges that have held back the development of the voluntary carbon market (VCM).
Last month’s Intergovernmental Panel on Climate Change (IPCC) report highlighted that decarbonization, and in turn, scalable carbon innovation is critical to limit the worst impacts of the climate crisis. Against this backdrop, corporations across the globe continue to set ambitious climate action pledges in the drive towards a net zero economy. Carbon credits will play an important, complementary role in these commitments by compensating for unavoidable emissions, and as a result, the VCM continues to grow rapidly, surpassing USD 1 billion in 2021.
This new collaboration is part of Visa’s global aspirations to become a climate-positive company through new partnerships and initiatives. Last year, Visa pledged to reach net zero emissions by 2040, 10 years ahead of the Paris Climate Agreement goal. Together with Carbonplace, Visa will continue to explore delivering additional technology-led sustainable solutions for its customers.
The pilot will also inform the further development of Carbonplace, which has been likened to the ‘SWIFT’ system of the carbon markets, including the exploration of more innovative ways to settle transactions. It is currently expected that Carbonplace will be operational at the end of 2022.
“Visa is committed to support the transition to a low-carbon economy and to create sustainable business solutions for our clients, which will help them meet their net zero commitments,” said Charlotte Hogg, CEO Visa Europe. “We’re excited about the potential for this voluntary carbon market to leverage our capabilities and help to deliver on that commitment, and we’re proud to support Carbonplace through this first pilot purchase of fully certified carbon credits in this market.”
David Gall NAB Group Executive, Corporate and Institutional Banking, said: “Climate action is everyone’s job, including NAB’s. Carbonplace is creating new opportunities to help our customers as they take action to reduce their emissions and achieve their own targets. This successful pilot transaction with Visa is a significant step towards being able to help more of our customers tackle existing barriers and make carbon credits more accessible to everyone.”