The London Stock Exchange is using its infrastructure to provide products for climate-minded investors. Philipp Good from ESG-AM told finews.com how offsetting carbon is one of many solutions on the journey to net zero.
The London Stock Exchange is launching its first fund on its Voluntary Carbon Market (VCM), which aims to channel funding to climate mitigation projects that generate carbon credits, it said in a statement Monday.
The Foresight Sustainable Forestry fund allows direct and liquid access to its forestry and afforestation portfolio aligned with the UK Woodland Carbon Code certification.
Sustainable Development Goals
Reducing CO2 emissions is one of the UN goals to combat climate change. Offsetting carbon emissions gives companies the chance to compensate for their CO2 emissions by buying credits, but it is only a secondary option for the CEO of Swiss asset manager ESG-AM, Philipp Good.
«First and foremost it is important for companies to concentrate on causing as few emissions as possible and to use resources sparingly,» he said,
Avoidance vs Removal
Besides «Avoidance Offsets» which involve conserving forests and saving energy, there are also «Removal Offsets,» such as removing carbon permanently. Swiss company Climeworks is a specialist in the latter, having developed technology to capture and remove CO₂ from the air.
The emergence of London’s voluntary carbon market and the designated trading venue is not new but «it makes clear that there is a price to pay for CO2 emissions and that energy efficiency is being rewarded,» Good said.
A McKinsey study estimates the carbon credits market will reach $50 billion by 2030, up from $2 billion today.
