Carbon credit transaction network Carbonplace has raised US$45 million in a strategic round of investment and formed its own entity.
Headquartered in London, Carbonplace, which connects buyers and sellers of carbon credits through their banks, secured the seed funding from the financial institutions that founded the fintech network.
The institutions include BBVA, BNP Paribas, CIBC, Itaú Unibanco, NatWest, Standard Chartered, UBS, together with Aussie lender National Australia Bank and Japan’s SMBC from the Asia-Pacific region.
The new entity, which has been likened to a SWIFT system for carbon markets, has already piloted trades with a host of buyers, sellers, registries and exchanges, including global payments technology company Visa and Singapore-based marketplace Climate Impact X.
Through the investment, each bank shares equal equity ownership in the new company, which is expected to launch its platform later this year.
The capital injection represents a commitment from some of the world’s largest financial institutions, which account for nearly US$9 trillion in total assets, to achieve Carbonplace’s vision of accelerating corporate climate action by providing transparent, secure and accessible carbon markets.
The new company intends to leverage this investment to scale the platform and its team to expand services to a wider client base of financial institutions and accelerate partnerships with additional carbon market participants, including registries and marketplaces around the world.
Building on its user banks’ highly regulated and standardized compliance frameworks, Carbonplace ensures transparent and simple customer-to-customer transactions by enabling frictionless counterparty due diligence and onboarding.
Carbon credit buyers and sellers can also share information in real-time, ensuring traceable and streamlined settlement of carbon credit transactions, with the retirement of credits within minutes. Digital wallets enable owners to reliably demonstrate ownership to the market, reducing the risks of double counting and simplifying reporting.
Carbonplace will be led by CEO Scott Eaton who has held a number of senior leadership roles in financial technology and capital markets. He joins from capital markets fintech Nivaura, where he served as CEO. Prior to Nivaura, he was CEO of Algomi from 2018 until its sale to BGC in 2020.
“Carbonplace creates an efficient and secure network for carbon credit transactions,” says Robert Begbie, CEO, NatWest Markets. “According to McKinsey, global demand for voluntary carbon credits is likely to increase by a factor of 15 in the next seven years. To meet that demand, Carbonplace is delivering a reliable, secure and scalable technology that will form a crucial part of the infrastructure for carbon markets to drive climate action at scale.”