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.”
Carbonplace is a carbon credit settlement platform developed by seven financial institutions: BNP Paribas, CIBC, Itaú Unibanco, National Australia Bank, NatWest Group, Standard Chartered, and UBS. Carbonplace will enable the reliable, secure, and scalable execution of voluntary carbon credit transactions, ensuring robust reporting and traceability, while also offering records of ownership and
a digital wallet for customers to store credits.
NAB is a financial services organisation that serves eight million customers at more than 740 locations in Australia, New Zealand and around the world. Our strategic ambition is to serve customers well and help our communities prosper. As Australia’s largest business bank, we work
with small, medium and large businesses to help them start, run and grow. NAB has been carbon neutral in operations for more than 10 years and has a target to deliver $70 billion in environmental financing by September 2025. We are an inaugural signatory of the United Nations’ (UN) Principles for Responsible Banking, the first Australian bank to sign the UN Environment Programme Finance Initiative’s Collective Commitment to Climate Action and have joined the UN-convened Net Zero Banking Alliance, working towards our goal of aligning business operations and lending portfolios to achieve net zero carbon emissions by 2050.
Itaú Unibanco’s purpose is to promote people’s power of transformation and we do it through a strategic agenda focused on client centricity and digital transformation, based also on the diversity of our people. The largest bank in Latin America, Itaú Unibanco is present in 18 countries and has more than 56 million customers, among individuals and companies in all segments, to whom we offer the best experiences in financial products and services. Itaú Unibanco has been selected for the 21st consecutive time to be part of the Dow Jones Sustainability World Index (DJSI World), being the only Latin American financial institution to be part of the index since its creation in 1999.
Sustainable Carbon is a specialist and leader in Latin America in the development of emission reduction projects and solutions connected with GHG management, mainly with renewable energy, fuel switch, composting, avoided methane, biomass and forestry projects, including a portfolio with more than 50 projects already verified. A pioneer in the development of best sustainable practices, Sustainable Carbon had the first SOCIALCARBON® project validated in 2008 and the first Gold Standard project for the voluntary market in Brazil in 2011.
The voluntary carbon market has a critical role in supporting the transition of corporations to net-zero greenhouse gas emissions, as part of their climate action strategies. Carbon credits are bought by corporations looking to compensate for emissions that they cannot reduce or remove. The credits fund high-quality projects that couldn’t have been funded otherwise, and which either avoid greenhouse gas emissions being released into the atmosphere or remove carbon dioxide from it.