- The partnership aims to accelerate corporates’ journey to carbon neutrality
- The financing solutions will include tokenized carbon credits in the form of MVGX’s CNT™s,
OCBC Bank and Meta Verse Green Exchange (MVGX), a digital green exchange regulated and licensed by the Monetary Authority of Singapore, have announced a partnership to help develop new green financing solutions. The strategic partnership focuses on accelerating large corporates’ journey to carbon neutrality. Scheduled to be launched in late 2022, the financing solutions will include tokenized carbon credits in the form of MVGX’s Carbon Neutrality Tokens/CNT™s, for big corporates and industries to reduce their carbon emissions, to help achieve carbon neutrality.
An independent party will be entrusted with the task of verifying the expected carbon emissions from projects and initiatives utilizing these financing solutions, to calculate the corresponding carbon credits needed. MVGX’s Carbon Neutrality Tokens are supported by MVGX’s proprietary Non-Fungible Digital Twin distributed ledger technology that provides corporates a immutable, verifiable and frequently updated record of the carbon performance of the climate-action initiatives that they have invested in through these digital carbon credits.
The announcement of this partnership comes at a time when carbon credits are becoming an increasingly popular solution for corporate firms after they have failed to find a sustainable decarbonization option to achieve carbon neutrality.
Corporates, by purchasing such carbon credits, are investing in green projects, including renewable energy and reforestation, that is heavily contributing to carbon neutrality and future decarbonization. The Institute of International Finance’s Taskforce on Scaling Voluntary Carbon Markets also estimates that the global demand for carbon credits could increase 15x by 2030.
The challenges that hinder the ability to properly account for and track carbon credits under existing systems are expected to be mitigated by the CNT™s provided in the new green financing solutions with a reliable and accurate view of their emissions, offsets etc.
Ms Elaine Lam who holds the office of the Head, Global Corporate Banking, OCBC Bank, said: “With the recently released report by the United Nations’ Intergovernmental Panel of Climate Change, there will be increased urgency in corporates’ transition to a low carbon future by further cutting down greenhouse gas emissions. We are hoping to accelerate these efforts by providing financing solutions with tokenized carbon credits, and help expand the reach of private-sector finance in sectors most crucial in mitigating climate change.”
This partnership reinstates ONBC’s commitment to fighting climate change and supporting customers in their journey to achieving carbon neutrality by seizing growth opportunities in green and sustainable financing. The Bank by the end of 2021, had extended more than $34 billion in sustainable financing to customers, surpassing its original target of $25 billion by 2025, four years ahead of schedule. A new target of $50 billion in sustainable financing commitments by 2050 has also been established.
MVGX Executive Chairman and Co-Founder Bo Bai, talking about this new partnership, said: “Despite the best intentions, businesses and governments around the world have realized the limitations of the present systems for tracking and neutralizing carbon emissions. Thankfully, there now exists a greater urgency to embrace new solutions that leverage technology to promote carbon reduction and also finance green initiatives. By joining forces with Southeast Asia’s second-largest Bank, we now have the opportunity to advance our sustainability ambitions along with fast-tracking our nation’s goal of achieving Singapore’s 2030 Green Plan. We are very excited to be building the bridge between the global carbon trading markets of the future and the green investments in traditional finance through green digital assets.”
In 2021, MVGX launched its very first batch of CNT™s ahead of COP26 in Glasgow, Poland. These asset-backed tokens were tied to carbon credits generated by a wind project in China that was verified and later registered with China’s National Carbon Registry. The first tranche of 5,000 carbon credits was later sold to a Hong Kong-based private equity company in 2021, lowering obstacles to access ESG assets for retail and institutional investors in the Asia Pacific.