DBS, Singapore Exchange, Standard Chartered and Temasek are creating a global exchange and marketplace for carbon credits.
The partners are forming a joint venture, called Climate Impact (CIX), that will use satellite monitoring, machine learning and blockchain technology to enhance the transparency, integrity and quality of carbon credits that deliver "tangible and lasting" environmental impact.
The group cite BCG research that shows that today's low-carbon technologies may only reduce two-thirds of global emissions, which may not be sufficient to achieve the goal under the 2015 Paris Climate Agreement to limit global warming preferably to 1.5 degrees Celsius.
CIX argues that high-quality carbon credits can provide a practical solution to bridge this gap, especially in the near term, and will play an important role in a holistic climate mitigation strategy.
Launching by the end of the year, the CIX exchange will facilitate the sale of large-scale high-quality carbon credits through standardised contracts - catering primarily to multinational corporations and institutional investors.
A separate entity, Project Marketplace, will cater to a broader spectrum of corporates seeking to participate in the voluntary carbon market, offering them a curated selection of natural climate solutions (NCS) projects that can help meet their sustainability objectives.
CIX will arrive as global demand for high-quality carbon credits in the voluntary carbon market is estimated by McKinsey to increase at least fifteenfold by 2030, up to 1.5 to 2 gigatons of carbon dioxide annually.
Mikkel Larsen, interim CEO, CIX, and chief sustainability officer, DBS, says: “Climate Impact X will provide a solution for corporates to address unavoidable carbon emissions in the near term and propel the development of new carbon credit projects worldwide.
"With an initial focus on Natural Climate Solutions, the carbon credits will also create impetus to address another grave risk of biodiversity loss and help serve local communities. CIX will build on collective action by global governments, corporates and individuals to achieve a net-zero economy.”