The U.S. Office of the Comptroller of the Currency (OCC) hired its first “climate cop” or chief climate risk officer, Dr. Yue (Nina) Chen to manage climate-related financial risks.

OCC is the federal agency overseeing the largest banks in the U.S.

The banking regulator reinforced its commitment to confront risks associated with climate change by appointing Chen.

OCC believes that climate-related financial risks can affect the safety and soundness of banks through physical and transition risks. This may also impact various sectors of the economy as well as access to financial services.

And so, hiring an officer to police the matter is critical to minimize the said risks.

Climate Change and the Banking Sector

Global warming and extreme weather events put more pressure on banks in figuring out how much money to lend to firms. And pricing those loans becomes even more difficult.

Proponents of climate-driven financial oversight say that a catastrophic weather event causing bigger losses to banks is a big issue. It can threaten the stability of the financial system.

The idea to integrate climate-related risks into financial regulation was from Democratic lawmakers. They have been warning others about the dangers of climate change to markets.

In fact, President Joe Biden assembled a team of climate experts inside the White House. And OCC is one of those agencies involved in this matter.

The Climate Cop

OCC is the chief regulator of about 70% of the assets in the U.S. commercial banking system.

The agency’s role is to ensure that national banks and federal savings associations know their climate-related financial risks. And that they create risk management frameworks to measure, track, and control those risks.

The Acting Comptroller Michael Hsu said that the agency will take a two-pronged approach to act on climate change:

engaging and learning from others
supporting the development and adoption of effective climate risk management practices at banks

Thus, OCC designated one of its bank supervisors last year to serve as a climate risk officer to urge banks to consider climate risks in their operations.

Dr. Chen’s role is an expansion of that and is crucial in delivering OCC’s functions.

As a climate cop, Chen will oversee the OCC’s new Office of Climate Risk. She will also lead the agency’s climate risk efforts related to supervision, policy, and engagement.

Dr. Chen will focus on developing a new system to assess climate-driven risks to banks. It’s important to figure out how to monitor and manage them.

She will directly report to Hsu. He foretold this move in his speech on the issue.

Hsu said that the appointment of a new climate risk officer will speed up “our internal function into a full-fledged office reporting directly to me”.

He also noted that regulators are starting to consider how testing banks for readiness for climate-related threats could look in the future. He added that:

“With regards to scenario analyses for larger banks, a strong emphasis on diversity of approaches needs to be maintained… With climate-related risks, I believe we are much more exposed to failures of imagination — not asking enough ‘what if?’ questions — than we are to failures of stringency or consistency.”

Dr. Chen’s Background

Dr. Yue Chen has a doctorate in chemical engineering from the Massachusetts Institute of Technology.

She had worked at Goldman Sachs in the Wall Street giant’s asset management business. She was then employed at the Royal Bank of Canada.

OCC’s climate cop is not Chen’s first role as a regulator. She was the executive deputy superintendent in the climate division of New York State’s banking department.

There she “was responsible for integrating climate-related financial risks into supervision of regulated entities,” as per OCC’s statement.

Dr. Chen was also the vice chair of the climate risk steering group at the International Association of Insurance Supervisors.

Under her leadership, the OCC will continue to focus on championing climate risk management frameworks for the federal banking system.

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A record volume of Australian carbon credits were traded in the second quarter, indicating that the market is maturing despite growing criticisms.

The Australian Carbon Credit Units (ACCUs) scheme is a voluntary carbon market mechanism that seeks to incentivize companies to cut their footprint.

It has been under increased scrutiny with skeptics claiming it’s a scam. Lack of additionality of ACCUs is the biggest concern that they pointed out.

But amid the boiling criticism, the Aussie carbon market performed at record levels.

ACCU Carbon Market Q2 2022 Achievements

More volume was transacted in the ACCU market in Q2 2022 than in any previous quarter.

The total transaction volume of 5.5 million ACCUs – 4x more than Q2 2021.

Comparing June 2021 to June 2022 there was a 5-fold increase in carbon credits traded.

Even the number of ERF (Emissions Reduction Fund) projects (231) registered during the period also reached a new record, with 68 new Soil carbon projects getting registered.

Generic ACCU spot prices also jumped 15% over the quarter to reach $35.10. ACCU price with co-benefits is also rising, especially for First Nations People.

Large-scale renewables investment maintains strength while small-scale solar PV is stable at the lower level seen in Q1.

Here are the other major highlights of the Aussie carbon market in Q2.

Labor’s Climate Change Bill Signed into Law

With the recent change in Australia’s federal government, there has also been a shift in the nation’s position on climate change.

Australia’s parliament had passed the Labor government climate change legislation. The new law pledges to cut carbon emissions by 43% by 2030, define a process to ramp it up, and the goal of net zero by 2050.

Commenting on the bill’s passage, Climate Change and Energy Minister Chris Bowen said that:

“The passage of the climate change legislation sends a message to the world that Australia is serious about driving down emissions, and serious about reaping the economic opportunities from affordable renewable energy.”

The law, supported by the Greens party and independent senators, marked a first step on climate action by the Labor government. Still, it will continue to face tougher challenges to pass more climate-related bills.

But industry groups welcomed the legislation after over a decade of uncertainty in climate policy. Some noted that it will give Aussie businesses and industry more clarity in their climate actions.

Plus, it will also reform the existing “safeguard mechanism” that puts a cap on the biggest industrial polluters. The Greens said they will back this up by blocking any new coal mines and natural gas projects proposals.

Meanwhile, the Climate Change Authority will recommend future climate targets.

These things are useful in serving Australia’s climate policymaking. Yet, there are some important elements that are not included in the bill.

One of them is a long-term roadmap to net zero emissions.

Australia’s Journey to Net Zero

With the climate bill passed, attention will soon shift to Australia’s 2035 emissions target.

The Climate Change Authority recommends that target and new targets every 5 years from then on.

While it’s a good process to suggest an interim target, the country also needs to draw a forward trajectory beyond the next five-year period.

And that’s because investments in Australian carbon credits that are most impactful require longer timescales.

This net zero road mapping is critical in tackling significant matters like these two points:

Targets for 2040 and beyond as the nation moves to net zero
The gap between remaining emissions and removing them, and what solutions to employ, e.g. nature-based or technological

The Climate Change Authority may conduct this analysis and map out possible net zero scenarios. But its recommendations would have better standing with a legal requirement attached.

All that said, the new emission reduction target improves a lot on the previous government’s target. And enshrining it in law sends an important message.

It makes net zero emissions options more investable while telling the world that Australia is back on climate change action.

The new law is expected next year, with a target implementation on July 1.

The post Multiple Carbon Credits Records Broken in Australia appeared first on Carbon Credits.

Accenture has acquired Carbon Intelligence, a leading carbon and climate change strategy consultancy, adding 160+ professionals to its growing pool of sustainability experts to help companies achieve net zero.

Accenture is a Fortune 500 company specializing in IT services and consulting. It’s a global professional services firm with leading abilities in digital, cloud, and security catering to over 40 industries.

Acquiring Carbon Intelligence adds more than 160 professionals to the NYSE-listed growing group of data scientists, consultants, and sustainability experts.

Peter Lacy, Accenture’s Sustainability Services lead officer, remarked on this recent acquisition:

“Carbon Intelligence expands our expertise in carbon strategy and delivery, building on the insights of our recently created global carbon intelligence network.”

Supporting Global Companies’ Net Zero Goals

Carbon Intelligence is a carbon and climate change strategy consultancy firm. It focuses on helping large businesses understand their carbon footprints and how to reduce them.

The company is using the Science Based Targets Initiative (SBTi) strategies to rethink clients’ business models and value chains.

As such, Carbon Intelligence has helped many global companies set science-based net zero targets and how to achieve them. It’s a key partner to CDP (formerly the Carbon Disclosure Project).

The company is also popular for its high standards in helping businesses measure and manage emissions. As per the firm’s CEO, Jonathan Sykes:

“The Carbon Intelligence team is made up of amazing, passionate people who are committed to driving real impact on climate change… We are excited to be joining Accenture, which will help us scale our capabilities and fulfill our mission to help businesses make a successful transition to a low-carbon world.”

The deal shows Accenture’s strong commitment to embed sustainability into everything it does and with everyone it works with.

With the entire world racing to net zero, the ability to measure, interpret and act on carbon data using the latest analytics, AI and visualization technologies has never been more critical.

So the addition of Carbon Intelligence will help Accenture ramp up true impact in reducing its clients’ total emissions.

The terms of the acquisition were not revealed.

Expanding Sustainability Services across ESG

Carbon Intelligence is Accenture’s 5th acquisition focusing on sustainability and net zero emissions.

The firm continues to highlight sustainability by expanding its capabilities in this area. It does the same in supply chain transformation and data-driven measurement of value and impact.

Earlier this year, Accenture acquired the following four companies. This move is to expand its services and solutions across ESG matters, including reaching net zero emissions.

Greenfish in France, Belgium and the Netherlands – June 2022

Greenfish is an independent engineering and advisory company specializing in sustainability consultancy services.

With a team of over 270 highly skilled professionals, the consulting firm joined Accenture to further enhance the provision of global Sustainability Services. This is to help clients improve their ESG performance and include sustainability in their operations.

akzente in Germany – May 2022

A recognized expert in ESG issues, akzente strengthens Accenture’s sustainability capabilities.

akzente helps companies across a broad range of industries build sustainability into the core of their businesses while creating sustainable values for stakeholders. These include the automotive, financial services, energy and consumer goods sectors.

Its team of 60+ professionals brings extensive knowledge in sustainability strategy, reporting, communication, and stakeholder management to Accenture Sustainability Services.

Avieco in the UK – April 2022

Avieco plays a central role in helping businesses in the U.K. and Ireland to create a sustainable, low-carbon economy.

Accenture’s commitment to sustainability aligns to that of Avieco’s. Being part of Accenture will create new opportunities for its people while helping businesses become truly sustainable.

Avieco’s team of over 60 professionals will bring more knowledge in ESG reporting, net zero strategy, and real-time data analytics to Accenture’s Sustainability Services in the U.K.

Avieco’s expertise in sustainability consulting spans a broad range of industries including retail and consumer goods, financial services, technology and media.

Zestgroup in the Netherlands – December 2021

Zestgroup was acquired by Accenture last year in December. It’s a services firm specializing in energy transitions, net carbon-zero projects, and procurement of renewables.

Zestgroup brings deep industry knowledge, project expertise and market regulation experience into helping entities move to net zero. This will further enhance Accenture’s ability to build more trusted, circular and net zero value chains.

Accenture itself has set its ambitious net zero aim by 2025. It’s committed to reduce emissions across the board, focusing on Scope 2 electricity use and Scope 3 business travels.

To tackle its unavoidable emissions, Accenture invests in its own proprietary nature-based carbon removal projects.

The post Accenture Acquires Carbon Consultancy to Support Net Zero Goals appeared first on Carbon Credits.

Right now, the carbon space is heating up. Dozens of companies are jumping into what’s fast becoming one of the hottest spaces to invest in.

But like in other fledgling industries, many of these junior carbon companies are still private.

Most of the publicly listed carbon investments you can find on stock exchanges right now are exchange-traded funds (ETFs) that hold carbon credit futures such as those found on the EU’s Emissions Trading System.

While these products can be fantastic ways to add exposure to the performance of carbon credits to your portfolio, they aren’t the most exciting.

That’s because carbon credits are a commodity, like gold or oil. And junior commodity companies will often see leveraged performance compared to that of their underlying commodity.

What that means is that when a commodity goes up, a junior company based in that commodity sector tends to go up by more.

Of course, the reverse is also true – when a commodity goes down, a junior company based in that commodity sector tends to go down by more as well.

In addition to this, as previously mentioned, many junior carbon companies are still private. This adds an extra layer of risk:

For private companies, unlike publicly listed companies, there’s no guarantee that you’ll be able to sell your shares whenever you’d like to do so.

Whether or not the potential for leveraged returns outweighs these risks is something only individual investors can decide for themselves.

Furthermore, opportunities to buy into private companies aren’t common, and require either good timing or knowing someone with access to the deal like a private broker. For patient investors, waiting for a private company’s go-public transaction, such as an IPO, can be an excellent alternative for buying into the company, provided that the price is right.

With that said, let’s take a look at three of the best private carbon companies in the sector right now.

But before we discuss each one of them, it would help to highlight the importance of investing in carbon credits and its impact on climate change.

The Importance of Investing in Carbon Credits

Betting your money in carbon credits and the companies that trade them is like paying off your (carbon) debts before investing. That’s because your investment will help get rid of “dirty” companies that pump greenhouse gas into the atmosphere.

The top carbon companies, including the private ones, are instead  putting funds to projects that promote the transition to a low carbon economy. It means they help avoid or reduce emissions by supporting cleaner energy sources.

Common examples of projects that reduce carbon pollution are reforestation, carbon capture, use and storage, and more.

Your money can also incentivize farmers to not turn grasslands (major carbon sink) into crops.

Either way, you’d be glad to know that your investment will not only give you some monetary return but it will help fight climate change. 

So here are the top private carbon companies you can choose from.

1. Xpansiv

Topping our list is the U.S.-based online commodities marketplace Xpansiv.

Formed from the merger of two different companies in 2019, Xpansiv is currently the market leader among all carbon exchanges for voluntary carbon credits.

Currently, around 90% of all global voluntary carbon credit transactions go through Xpansiv’s marketplace.

The carbon firm prices carbon, energy, and water-based transactions. And the company does this in an intuitive, user-friendly environment based on deeper data.

On its platform, users can trade a broad range of carbon credits from major carbon registries around the world. The long list of clients includes big organizations like airlines and financial institutions.

Xpansiv has seen phenomenal growth alongside the voluntary carbon markets, as the chart below shows:

Their investors certainly like what they’ve been seeing as well. Xpansiv has raised over $250 million U.S. since its merger in 2019, including a $40 million pre-IPO raise completed last January.

While currently still private, an IPO is definitely on the books for Xpansiv – potentially as soon as later this year.

For investors looking for exposure to the voluntary carbon markets, as well as other ESG-inclusive commodities, Xpansiv is definitely the top private carbon company to keep a close eye on, particularly as they near a go-public transaction.

2. DevvStream

Next on our list is DevvStream, a carbon credit streaming company with some significant business partnerships in play.

Streaming is an excellent business model, which has been seen in numerous other sectors such as the music and precious metals industries.

As such, it makes sense that DevvStream isn’t the only carbon streaming company around. What sets them apart, however, are the partnerships that we mentioned before:

More notably, DevvStream’s parent company, Devvio, runs a proprietary blockchain-based ESG platform with a number of major corporate clients. DevvStream can use this platform to onboard their carbon credits onto Devvio’s blockchain, where they will get priority access to any of Devvio’s corporate clients looking to reduce their carbon footprint.

Most significantly, DevvStream partners with the United Cities North America. They are an arm of the United Nation’s smart city program that advances the UN’s Sustainable Development Goals across cities around the world.

This strategic partnership will provide sustainable, high-quality projects to DevvStream for their streaming portfolio while giving them access to every project United Cities will be working on.

On top of it all, it will give the carbon streaming company the ability to take any technology partnerships and projects it invests in and bring it to the smart cities program.

These valuable partnerships give DevvStream a competitive edge over its peers and make it number two on our list of private carbon companies to watch.

While the company has received conditional approval to list on the Canadian NEO exchange, it hasn’t gone public yet, and an IPO financing would potentially make for the perfect entry point into this company.

3. Global Carbon Credit Corp.

Last but not least on our list of private carbon companies to keep an eye on is Global Carbon Credit Corp.

Global Carbon has a simple business model: they’re looking to acquire a diverse portfolio of voluntary carbon credits through both direct purchase as well as, potentially, streaming agreements.

By doing this, the company will be able to become a proxy for the price performance of voluntary carbon credits.

While many such ETFs already exist for the compliance carbon markets such as the E.U.’s EUAs and California’s CCAs, Global Carbon would be one of the first companies to do this for the voluntary carbon markets, giving them an early move advantage.

On top of this, Global Carbon’s CEO, Anthony Milewski, previously did the exact same thing with a different ESG-friendly commodity – cobalt, which is used extensively in electric vehicle batteries.

Mr. Milewski was able to sell his previous company, Cobalt 27, for half a billion dollars Canadian – and he’s looking to apply the same business model and experience from his previous success to Global Carbon.

While Global Carbon hasn’t given any indication as to a potential IPO timing yet, the company did mention that it would use its best effort to get a listing on a North American stock exchange when they announced a CAD $35 million financing just earlier this March.

In other words, an IPO could be on the horizon for Global Carbon – giving it the third spot on our list of private carbon companies to watch.

A Few Tips to Remember

If you’ve decided that investing in carbon credits is the best way for you to grow your money responsibly, the best private carbon companies above are a good place to start.

Whether you’re more interested in growing trees to suck in CO2 from the air or promoting renewable energy use in communities, those companies have it all.

But to make sure that your dollars are making a real difference in the battle against global warming, take note of the following tips when making your final choice.

Projects are third-party verified

All projects that produce carbon credits should be verified and certified by internationally recognized carbon standards. This means the projects meet strict criteria ensuring you that their emissions reductions are real and verifiable. The top carbon verifiers are Verra’s Verified Carbon Standards, Gold Standard, American Carbon Registry, and Climate Action Reserve.

Projects provide “additionality”

Make sure that the project was only made possible by carbon funding. If it would have happened anyway even without the funding support, your money is probably better invested elsewhere.

Transparency is key

Not all private carbon companies work the same. A reputable one will have all information about their projects, methods, quality standard protocols, etc. readily accessible on their website. See to it that standards and frameworks are transparent so you know the value of your investment.

Carbon credit retirement

All projects should be listed on a carbon registry so that carbon companies can use them as reference when retiring carbon credits. This is crucial for you to ensure that the credits you bought are not resold. Otherwise, they’ll be double counted in accounting and reporting emissions reductions.

These are just some of the reminders you need to keep in mind. You may also want to know what are the best carbon credits to buy.

And if you want to take your search further, you can also learn more about the top carbon exchanges that you can add to your investment portfolio.

The post The Top 3 Private Carbon Companies to Watch Right Now appeared first on Carbon Credits.