In its inaugural summit at Climate Week NYC, energy transition and carbon market infrastructure provider Xpansiv had a diverse lineup of industry professional that reflected the different directions of development for sustainability and explored the latest developments around carbon markets.
Perhaps tellingly the first panel included representatives from carbon removal and carbon insurance companies, two areas showing high growth potential. Removal market maker CUR8’s co-founder and CEO Marta Krupinska (fresh from announcing an $11 million agreement with British Airways) and Oka Insurance CEO Chris Slater were joined by Sunil Biswas from ION Commodities, a leading global provider of energy and commodity management solutions.
Krupinska pointed out to the audience that “we [now] have three markets [for carbon] – voluntary, compliance and removal,” signaling that the latter has arrived at the scene and is set for an upward trajectory. She also shared different struggles her team is having with navigating the communication with sustainability and financial teams in corporates, where a huge deal of education is required to make the case for CO2 removal.
From the insurance perspective Slater was candid about the current state of affairs saying “the market lacks standardization” but also shared an opinion that ultimately “compliance and voluntary will merge”.
Sustainability’s evolving role
Representing United Airlines, Chief Sustainability Officer (CSO) Lauren Riley talked about how integrating sustainability into the company’s core strategies has provided strong incentives for different teams to act on their own, reducing the onus on the CSO function, which acts more like a connector and driver, rather than doing the heavy lifting and chasing other stakeholders.
Bank of America‘s Vilos Kuchinad highlighted the significant funds the bank has set aside for investing in sustainability-related projects and focused attention on the importance of education to achieve corporate action. Speaking the same language when it comes to reducing emissions and encouraging a common responsibility between all business units, instead of a CSO-owned process is the better approach according to him.
Nasdaq’s Global Head of ESG Solutions Randall Hopkins also spoke about the important role of education and visibility by “making kilowatt hours [reduction] feel personal”. On a more market-focused theme, he stressed on the importance of matching the right buyers and sellers to create an effective market.
Article 6 to jumpstart carbon markets
In a panel focused on the real-world implementation of Article 6 and trading, Paul Bodnar, Director of Sustainable Finance, Industry, and Diplomacy at Bezos Earth Fund, a $10-billion project that has been involved in a broad range of carbon initiatives, was joined by American Carbon Registry‘s CEO Mary Grady and Hania Dawood, Manager, Climate Finance & Economics Climate Change Group at the World Bank.
Bodnar spoke about the need to change existing recommendations about using carbon credits to compensate for Scope 3 emissions, an issue that has caused friction within the influential SBTi, which provides guidance to its over 5,000 corporate members. Should the SBTi change its recommendation, then a surge of liquidity could enter voluntary carbon markets.
Relevant: Amazon To Pioneer New Carbon Offset Standard With Verra, Sidesteps Bezos-Backed Approach
Both Bodnar and Dawood highlighted the vital role of the U.S. and its potential for leadership in terms of creating confidence in Article 6.
Dawood shared that countries like Senegal, Ghana and Uzbekistan have reached out to the World Bank for support on Article 6 policies and carbon pricing. She also directed attention towards several agreements for carbon credits under the Article 6.2 mechanism (coming from Singapore and South Korea), which despite not being formally enacted is available for willing partners to utilize.
Mary Grady also confirmed the trend for more countries to actively develop carbon markets, sharing that ACR is working on projects in 20 jurisdictions.
Xpansiv – ready for scaling carbon markets
The anchor panel led by Xpansiv CEO John Melby focused on the broader strengthening of the voluntary carbon market and finding a path that leads to rapid growth.
Melby stated that the infrastructure for scaling is essentially in place, part of which was making the Xpansiv Connect product available to all market participants. Acting as an integrated hub it provides seamless, direct access to automated settlement and portfolio management features and kicked off fully integrated with 13 renewable energy and carbon registries and five marketplaces.
What remains are the standards and the regulation.
Annette Nazareth, Chair of the Integrity Council for the Voluntary Carbon Market (ICVCM) was also among those that pointed towards the importance of how the federal government treats carbon markets. The Biden administration’s recent endorsement of voluntary markets seems to have infused a high degree of confidence and an expectation for next steps to follow.
With this attention shifts to developments elsewhere. On the political front the U.S. presidential elections can have a strong impact on many of these initiatives, the SBTi is also expected to provide clarity in the next months with work on Article 6.2 also in progress. Slow as it may seem but it appears that more pieces of the carbon market puzzle are falling into place.
Read more: Switzerland And Thailand Made The First Ever Carbon Credits Deal Under Article 6.2
