London Stock Exchange Launches First Fund Under New Market for Carbon Credits The London Stock Exchange Group PLC on Monday launched the first fund under its new market for carbon credits, which aims to provide capital to green projects and transparency in an opaque area of sustainable finance. The new market offers a way for companies and investors to purchase carbon credits to offset emissions and meet net-zero commitments. Developers can raise funds through the exchange and use the money on projects to reduce greenhouse gasses. Companies and shareholders, in return for their investments, can receive carbon credits in lieu of cash dividends. Companies can currently purchase carbon credits through brokers and privatemarket intermediaries. However, many companies find it difficult to get information about project developers and can struggle to identify specific projects—in areas such as forest protection or renewable energy—that fit their preferences, environmental lawyers said. Demand for credits in voluntary carbon markets is on the rise as more companies make net-zero commitments and position themselves as taking steps to improve the environment. Foresight Sustainable Forestry Co. PLC, a London-based investment firm, is the first company to take part in the new voluntary carbon market, the London Stock Exchange said Monday. Foresight invests in developing land for commercial forests, primarily in the U.K. For the new market, developers must disclose the percentage of their total assets invested in eligible climate-change mitigation projects. They must also disclose the industry standards they use to certify their projects. Operating companies or investment funds on the exchange are eligible for the voluntary carbon market and must meet all other requirements for the market on which they are listed. Companies are facing increasing pressure to disclose climate-related information from regulators and standard-setters across the globe. Still, the new market could come with challenges for companies looking to invest. For instance, those interested in crafting a particular narrative about their green investments may find it hard to do so if the credits they receive are tied to several underlying projects. The application, use and standardisation of data is key.
London Stock Exchange Launches First Fund Under New Market for Carbon Credits
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