The global payments technology company Visa, together with Carbonplace, a carbon credit settlement platform, has developed a carbon credit system and has conducted a successful pilot transfer.
For the transaction, Visa purchased Verra-certified credits from Sustainable Carbon, a carbon credit project developer. The transfer, using Carbonplace’s settlement technology to boost the speed, efficiency, and security, supports the growing demand for voluntary carbon credits and hopes to drive private sector capital towards global climate solutions.
The transfer was facilitated by two of Carbonplace’s founding banks, National Australia Bank (NAB) on behalf of Visa and Itaú Unibanco on behalf of Sustainable Carbon.
Carbonplace is developed by seven financial institutions, including BNP Paribas, CIBC, Itaú Unibanco, National Australia Bank, NatWest Group, Standard Chartered, and UBS.
The platform is designed to demonstrate how these institutions can collaborate to leverage their existing infrastructure, including KYC and anti-money laundering procedures, to address some of the challenges that have stifled the development of the voluntary carbon market (VCM).
A report released by the Intergovernmental Panel on Climate Change in April emphasized the importance of decarbonization, and thus scalable carbon innovation, is critical to mitigate the worst effects of the climate crisis.
Against this backdrop, firms around the world continue to make ambitious climate action pledges in the pursuit of a net zero economy. Carbon credits will play an essential, complementary role in these pledges by compensating for unavoidable emissions, and as a result, the VCM continues to grow, hitting US$1 billion in 2021.
This new partnership is part of Visa’s global goal of becoming a climate-positive corporation through new collaborations and activities. Visa vowed in 2021 to achieve net zero emissions by 2040, 10 years ahead of the Paris Climate Agreement target.
The pilot transfer also helps shape the future of Carbonplace, which has been referred to as the SWIFT system of carbon markets, including the exploration of new ways to settle transactions.