Singaporean banking and financial services company OCBC Bank announced today a new strategic partnership with digital green exchange MetaVerse Green Exchange (MVGX), to launch tokenized green finance solutions, aimed at accelerating large corporates’ energy transition to carbon neutrality.
The partnership will enable OCBC’s corporate clients to offset their carbon footprints with the use of tokenized carbon credits through MVGX’s Carbon Neutrality Tokens (CNTs). Supported by MVGX’s Non-Fungible Digital Twin (NFDT) distributed ledger technology, the tokens provide companies with a record of the carbon performance of the climate-action projects that they have invested in through the digital carbon credits.
Bo Bai, MVGX Executive Chairman and Co-Founder, said:
“By joining forces with Southeast Asia’s second-largest bank, we have the opportunity to advance our sustainability ambitions and fast-track our nation’s goal of achieving Singapore’s 2030 Green Plan. We are excited to be building the bridge between green investments in traditional finance and the global carbon trading markets of the future through green digital assets.”
Demand for carbon offset projects that counteract the release of greenhouse gases, and related credits, is expected to increase significantly over the next several years, as companies and businesses increasingly launch net zero ambitions, and turn to offsets as a bridge to their own absolute emissions reduction efforts, or to balance difficult to avoid emissions.
The market for carbon credits, however, is challenged by problems including a lack of liquidity, and insufficient or inconsistent data to assess the effectiveness of the projects.
According to OCBC, the ability to properly account for and track carbon credits under existing systems has resulted in challenges that have prevented uptake and impact at scale, such as double counting and the difficulties involved with cross-border carbon trading. The new green financing solutions aims to address these challenges by providing businesses with a view of their emissions and offsets.
OCBC stated that the solutions are scheduled to be launched later this year, and an independent party will verify the expected carbon emissions from projects using these financial solutions, to calculate the corresponding carbon credits reused.
Elaine Lam, Head, Global Corporate Banking, OCBC Bank, said:
“With the recently released report by the United Nations’ Intergovernmental Panel on Climate Change (IPCC), there will be increased urgency in corporates’ transition to a low carbon future by cutting down greenhouse gas emissions. We hope to accelerate these efforts by providing financing solutions with tokenised carbon credits, and expand the reach of private sector finance in areas and sectors most crucial in mitigating climate change.”