Exchange in Focus: SGX and Partners to take climate action through global carbon exchange and marketplace

25 May 2021

Singapore Exchange (SGX), DBS Bank (DBS), Standard Chartered bank and Temasek Holdings (a Singaporean state owned holding company) announced their intention to join forces to take climate action. Through a joint venture to be established by the four parties, Climate Impact X (CIX) aims to be a global exchange and marketplace for high-quality carbon credits. CIX aims to leverage satellite monitoring, machine learning and blockchain technology to enhance the transparency, integrity and quality of carbon credits that deliver tangible and lasting environmental impact. Global efforts to address climate change have been driving demand for solutions to help companies effectively reduce their carbon emissions. However, today’s low-carbon technologies, including current renewable energy solutions, may not be sufficient to achieve the goals of the 2015 Paris Climate Agreement. High-quality carbon credits may provide an additional practical solution to help achieve the world’s climate goals. Mikkel Larsen, Interim CEO of Climate Impact X and Chief Sustainability Officer at DBS, said: “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.” Larsen added: “By facilitating a well-functioning marketplace with strong impact and risk data, CIX will enable efficient price discovery and catalyse the development of new projects.”  

CIX Exchange and Project Marketplace to be focused initially on Natural Climate Solutions (NCS); to be launched by end 2021

CIX will offer distinct platforms and products that cater to the needs of different buyers and sellers of carbon credits. These include the Exchange and the Project Marketplace, which are expected to be launched by end 2021. The Exchange seeks to facilitate the sale of large-scale high-quality carbon credits through standardised contracts – catering primarily to multinational corporations and institutional investors. In addition, the Project Marketplace aims to cater to a broader spectrum of corporates seeking to participate in the voluntary carbon market, offering them a curated selection of NCS projects that can help meet their sustainability objectives. Each project on the Project Marketplace will be supported by transparent environmental impact, risk and pricing data. To start with, CIX has announced it will focus on helping to catalyse the market for NCS, which involve protection and restoration of natural ecosystems such as forests, wetlands and mangroves. NCS can be cost effective and provide significant benefits by supporting biodiversity and generating income for local communities. Asia houses a third of the global supply potential and is therefore one of the largest suppliers of NCS globally. CIX aims to feature carbon credits from various high-quality NCS projects around the globe on its platforms. It is also in conversations with global rating agencies to provide independent ratings to these projects. In addition, CIX announced that it will be guided by an International Advisory Council – an independent expert body comprising non-governmental organisations, leading companies and project developers, and academics and thought leaders. CIX also intended to work with an ecosystem of global partners and international working groups, including the Taskforce on Scaling Voluntary Carbon Markets (TSVCM) and the Natural Climate Solutions Alliance, to align on leading standards for quality and integrity. Loh Boon Chye, Chief Executive Officer, SGX, said: “Climate action is a key priority for us and we support internationally accepted carbon mitigation hierarchies. From avoiding and reducing emissions within companies’ operations and value chains, to using renewable energy sources wherever possible and finally neutralising and compensating for hard-to-abate emissions, we will work with our ecosystem throughout this journey. Climate Impact X will be an integral part of this vision, backed by SGX’s track record as a major price discovery venue for global commodities and Singapore’s strong and trusted financial infrastructure.”  

SSE and Green Finance 

In alignment with the SSE’s Green Finance Action Plan, the SSE tracks a number of sustainability activities that can help stock exchanges to grow green finance in their market. This includes sustainability bond segments or ESG indices and mainstreaming green through the inclusion of ESG disclosure in listing rules. To know more check the SSE Stock Exchange Database.  

SSE and Climate Disclosure

The SSE initiative is to launch a new report and guide to support exchanges in providing guidance to issuers on climate disclosure. The new publications will assist stock exchanges in developing best practice reporting guidance for issuers to ensure globally consistent disclosures incorporating the recommendations from the FSB Task Force on Climate-Related Financial Disclosures (TCFD). This new project was launched last year by Mark Carney, UN Special Envoy for Climate Action and Finance, and London Stock Exchange Group (LSEG) and Johannesburg Stock Exchange, the Co-Chairs for the SSE Advisory Group on Climate Disclosure  

About the SSE

​The SSE initiative is a UN Partnership Programme organised by UNCTAD, the UN Global Compact, UNEP FI and the PRI. The SSE’s mission is to provide a global platform for exploring how exchanges, in collaboration with investors, companies (issuers), regulators, policymakers and relevant international organizations, can enhance performance on ESG (environmental, social and corporate governance) issues and encourage sustainable investment, including the financing of the UN Sustainable Development Goals. The SSE seeks to achieve this mission through an integrated programme of conducting evidence-based policy analysis, facilitating a network and forum for multi-stakeholder consensus-building, and providing technical assistance and advisory services.