Carbon credit trading platform secures $45 million from nine global banks

A group of nine global banks have invested a combined $45 million in a new platform for the buying and selling of voluntary carbon credits.

The London-based Carbonplace has revealed $5 million investment from each of BBVA, BNP Paribas, CIBC, Itaú Unibanco, National Australia Bank, NatWest, Standard Chartered, SMBC and UBS. Each bank shares equal equity ownership in the new company, with Carbonplace saying that it expects to launch the platform later in 2023.

Described by the company as a carbon credit transaction network, Carbonplace will allow companies to acquire carbon credits as they look to meet net-zero emissions goals. It will also facilitate the sale of carbon credits by companies whose business practices lead them to have credits to spare. It represents a shift from the current practice of trading credits bilaterally on a project-by-project basis and through commodity exchanges.

In a statement, Carbonplace said that it “intends to leverage this investment to scale the platform and its team to expand services to a wider client base of financial institutions and accelerate partnerships with additional carbon market participants, including registries and marketplaces around the world.”

The company has also announced the appointment of Scott Eaton as its first chief executive. Eaton is a financial services veteran with over 30 years in the industry, most recently as chief exec of Nivaura. He also held c-suite positions at Algomi prior to its sale to BGC in 2020 and MarketAxess, and held senior roles at ABN Amro, Royal Bank of Scotland, Deutsche Bank, and at UniCredit

Eaton said: "With Carbonplace, we are transforming the way that carbon credits are bought, distributed, held and retired. I am excited to take this company to the next level of its evolution, and to help unlock its massive potential to drive significant economic and social value by opening the carbon markets up to the world."

While the practice of acquiring carbon credits allows large companies to more easily achieve their sustainability goals, critics of carbon offsetting have argued that it is a form of greenwashing. The practice also allows richer nations which are heavy polluters like the US and China to pay poorer nations for their carbon credits so they can continue to emit heavy levels of CO2 while appearing to be reducing their emissions.

Analysts at Refinitiv estimated that the traded global markets for CO2 permits reached €760 billion in 2021.

A recent report from Reclaim Finance showed that while many financial institutions have made net zero commitments, they are still pouring billions into fossil fuel. The report found that since joining the alliance, 56 of the biggest banks in the alliance have provided $270 billion to 102 major fossil fuel expanders, while 58 of the largest members of the Net Zero Asset Managers initiative (NZAM) held at least $847 billion of stocks and bonds in 201 major fossil fuel developers as of September last year.

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