Investment management giant BlackRock and SGX Group (Singapore Exchange) announced today the launch of the iShares MSCI Asia ex-Japan Climate Action ETF, aimed at enabling investors to incorporate low carbon transition objectives in their portfolios and invest in best-in-class companies committed to reducing carbon emissions.

The new fund, managed by BlackRock and anchored by asset owner Prudential, launches with assets under management (AUM) of $426 million, making it the largest-ever equity ETF launched in Singapore.

Peter Loehnert, APAC Head of iShares and Index Investments, BlackRock, said:

“Asia Pacific is the largest and fastest growing region for energy transition investment, offering transformational opportunities for investors with climate-focused objectives. Investors globally are increasingly choosing iShares ETFs as ideal vehicles to align portfolio allocations and implement low-carbon transition goals. This new fund will provide them with an innovative, unique and powerful building block to access companies in the region leading the transition.”

The new ETF tracks the MSCI AC Asia ex Japan Climate Action Index, which forms part of the recently-launched MSCI Climate Action Indexes. MSCI introduced its Climate Action Index suite last year, aimed at enabling investors to invest in companies making progress towards emissions reduction targets. The indexes consist of companies taking measurable steps to reduce emissions, and provides exposure to all economic sectors, by selecting the top 50% of companies in each GICS sector based on factors including Scope 1, 2 and 3 emissions intensity, approved science-based targets, management of climate risks, and green business revenue.

Michael Syn, Senior Managing Director and Head of Equities, SGX Group, said:

“SGX Group plays a vital role in galvanising stakeholders within the financial ecosystem to mobilise capital and develop solutions to effect real change in addressing climate change. With the market and investors signalling their readiness for it, we have been working in partnership with BlackRock and MSCI to create a new global ecosystem of climate-related instruments such as this ETF and the climate action derivatives that were launched earlier this year.”

The launch of the new ETF comes as Singapore endeavors to establish itself as a hub for sustainable finance in Asia, and to attract capital from investors looking to align their investments with climate considerations. In 2019, Singapore’s central banks and financial regulator, the Monetary Authority of Singapore (MAS), launched a Green Finance Action Plan (GFAP) aimed at mobilizing capital to facilitate Asia’s low carbon transition, updated earlier this year with its more comprehensive  Finance for Net Zero (FiNZ) Action Plan.

Gillian Tan, Assistant Managing Director and Chief Sustainability Officer for MAS, said:

“The successful launch of the iShares MSCI Asia ex-Japan Climate Action ETF is the outcome of close collaboration between SGX Group, MSCI and BlackRock, and adds to the suite of innovative products in Singapore that supports transition and decarbonisation efforts in Asia. Looking ahead, Singapore welcomes the development of solutions that facilitate decarbonisation, while meeting the investment and risk management needs of issuers, asset owners and investors in the region.”

European market infrastructure provider Euronext announced the launch of a series of ESG tools and sustainable finance-focused initiatives, including making issuers’ non-financial data available on its website.

According to Euronext, the new initiatives will support its “Fit for 1.5°” climate commitment, which is based on the development of products and services that would help the company, its partners and clients, and the European economy curb the increase in global temperatures, and its “Growth for Impact 2024” strategy to build the leading market infrastructure in Europe, which includes empowering sustainable finance as a key strategic priority.

Euronext CEO and Chairman Stéphane Boujnah said:

“Effective positive change requires efforts and cooperation among key players in the market. Euronext can significantly impact the European sustainability agenda by leveraging its distinct position in financing the real economy and linking local economies with global capital markets.”

One of the new tools launched by Euronext includes “My ESG Profile,” a digital tool enabling issuers to showcase their sustainability efforts and allowing investors to access ESG data. Euronext said that it will deploy nearly 1,900 ESG company profiles, becoming the first exchange to provide standardized non-financial issuer data available on its website.

Euronext also announced the creation of a new family of biodiversity-focused indices, launching the Euronext Biodiversity Enablers index, developed in partnership with Iceberg Data Lab. The new index serves as a global benchmark highlighting companies’ positive biodiversity impact through metrics like Dependency Exposure Score and Biodiversity Avoided Impact. Companies in the index are selected from the “Euronext World Index” universe.

Additional initiatives announced by the company include the strengthening of the ESG content in its pre-IPO educational programs, and the publication of a new “ESG pre-IPO guide” outlining recommendations on best practices for ESG during the IPO process.

Boujnah added:

“As strong advocates of the CSRD directive, we firmly believe that the shift towards sustainable finance relies on improved extra-financial standards and more precise, regulated and granular ESG criteria. Our newly unveiled ESG products and services are designed to empower companies in their pursuit of these goals.”

Euronext also announced the launch of the “Euronext Foundation” aimed at supporting local sustainable communities and projects across Europe, in areas including financial literacy, diversity and inclusion, and marine resources.

Carbon removal marketplace Nori announced today that it has raised $6.25 million, and appointed exchange veteran Matt Trudeau as its new CEO.

The company said that the announcement comes as it prepares to scale its marketplace to support its largest-ever sale of carbon removal credits through its collaboration with Bayer, announced last year, and as it looks to expand the carbon removal product offerings on its marketplace.

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.

Founded in 2017, Seattle-based Nori aims to help scale the carbon removal industry and help address climate change through the creation of a large-scale carbon market. The company has set a goal to develop market-driven solutions to remove 1.5 trillion metric tonnes of legacy carbon dioxide from the atmosphere.

Trudeau joins Nori after serving as Managing Partner at 10x Markets, a strategic consulting and advisory for startups and businesses focused on electronic trading, fintech, capital markets, cryptocurrencies, crypto assets, and blockchain technologies. He has led or assisted in 12 market launches, with expertise in areas spanning regulated financial markets, market structure, trading technology and blockchain. The company’s founding CEO, Paul Gambill will stay on as Chief Product Officer and remain on the board.

Trudeau said:

“Under Paul’s leadership, Nori has established an exceptional team, brand, technology platform, innovative products, and strategic commercial relationships. The opportunities to advance the carbon market align strongly with my experience building financial and commodities markets. We will leverage Nori’s solid foundation to continue to drive innovation, expand our marketplace, and become the leading provider of solutions for carbon removal suppliers and buyers.”

The funding round was led by existing investors, M13, Toyota Ventures, Placeholder, and Cargill. With the completion of the new round, Nori has raised over $17 million.

Jim Adler, founder and general partner at Toyota Ventures, said:

“We are excited to support Nori’s next phase of growth with this latest financing. Nori is addressing a key challenge for the industry and society by offering a transparent marketplace for carbon removal. To reach Paul’s vision of carbon removal at a planetary scale, many challenges remain. Under Matt’s leadership, we look forward to seeing the team expand Nori’s offerings and grow its marketplace volume to achieve its founding mission.”

Gambill added:

“With Matt at the helm, we are excited to commercially scale our carbon removal credits with the Bayer Carbon Program collaboration and to make step-change-level improvements in the amount of CO2 being removed from the atmosphere.”

All issuers listed on the Stock Exchange of Hong Kong will be required to provide climate-related disclosures aligned with the International Sustainability Standards Board’s (ISSB) upcoming Climate Standard, according to a new proposal released by the exchange, with the new rules anticipated to take effect for financial periods beginning January 1, 2024.

The new rules, released alongside a consultation paper into the proposals, would represent a significant increase in the reporting provided by many companies, in areas including Scope 3 emissions, or those arising through the value chain outside of a company’s direct control, and scenario analysis to determine climate resilience. A report released by Hong Kong Exchanges and Clearing Limited (HKEX) in November 2022 found that, while many companies already reported on Scope 1 and 2 emissions, only around a third of issuers have started reporting on Scope 3 emissions, and around 5% have adopted climate-related scenario analysis.

In order to address issuers’ concerns about the need to ramp up climate reporting, and in light of current readiness, the exchange’s proposals include interim provisions, allowing issuers to provide quantitative disclosures for the first two years for some disclosures such as Scope 3 emissions, the financial effects of climate-related risks and opportunities, and certain cross-industry metrics.

Climate-related disclosure requirements under the new proposals cover a range of areas including companies’ governance of climate-related risks and opportunities, strategy topics ranging from the disclosure of material risks and opportunities and transition plans to scenario analysis-based climate resilience and the anticipated financial effects of climate-related risks and opportunities. The proposed rules would also mandate disclosure of metrics and targets including Scope 1, 2, and 3 emissions, the amount and percentage of assets vulnerable to transition and physical risks or aligned with climate-related opportunities as well as the amount of capex deployed towards these risks and opportunities, reporting on internal carbon prices, if used, and disclosure of the use of climate-related considerations in executive remuneration.

Katherine Ng, Head of listing at HKEX, said:

“With climate change being a global concern and focus, investors are demanding more information on how climate issues and related policy change could impact an issuer’s assets, business operations and financials. Our proposals aim to accelerate the building of resiliency and the sustainability journey of our issuers, further strengthening Hong Kong’s position as a trusted and attractive venue for capital raising.”

Responses to the consultation will be accepted until July 14, 2023. Click here to access the consultation paper.

Voluntary carbon market network Carbonplace announced today that it has raised $45 million from its consortium of founding banks, as it prepares to launch and scale its global carbon credit transaction platform.

The company also announced that it has become an independent entity, and appointed fintech executive Scott Eaton as its first CEO.

Based in London, Carbonplace was launched in July 2021 by a coalition of banks including CIBC, Brazil’s Itaú Unibanco, National Australia Bank, and Scotland-based NatWest Group, with UBS, Standard Chartered, BNP Paribas, BBVA and SMBC joining as founding banks in 2022. The platform connects buyers and sellers of carbon credits through their banks.

The funding comes as demand for carbon offset projects 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, while the market for carbon credits is challenged by problems including a lack of liquidity, and insufficient or inconsistent data to assess the effectiveness of the projects.

Robert Begbie, CEO, NatWest Markets:, said:

“Carbonplace creates an efficient and secure network for carbon credit transactions. 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.”

Carbonplace said that it will leverage the new investment to scale its platform and grow its team, expand its services to a wider base of financial institutions and accelerate partnerships with additional carbon market participants. The platform is expected to launch later this year.

Following the financing, each bank will share equal equity ownership in the new company.

Eaton joins Carbonplace after serving as CEO of fintech company Nivaura, which focuses on workflow automation for debt capital markets transactions and creating a distributed ledger solution for bond origination. Prior to joining Nivaura, he was CEO of London based fintech company Algomi, and has also served as COO at fixed income trading platform provider MarketAxess.

Eaton said:

“With Carbonplace, we are transforming the way that carbon credits are bought, distributed, held and retired. I am excited to take this company to the next level of its evolution, and to help unlock its massive potential to drive significant economic and social value by opening the carbon markets up to the world.”

Global carbon and environmental commodities market infrastructure platform Xpansiv announced today that it has closed a capital raise of $125 million, with proceeds aimed at supporting growth in the company’s service offerings and technology platforms.

The capital raise follows a $400 million capital raise in Xpansive last year, led by alternative asset manager Blackstone. New strategic investors participating in the financing included Bank of America and Goldman Sachs.

Jim DeMare, President of Global Markets at Bank of America, said:

“Sustainability is part of discussions in boardrooms and with investors. Robust technology, reliable data, and accessible spot markets are crucial to promote liquidity and scale growth in voluntary carbon trading and environmental commodities. Bank of America supports innovation in these evolving markets.”

Xpansiv provides infrastructure enabling market participants to value and exchange environmental commodities such as carbon, energy and water, and provides market data for voluntary carbon offsets, renewable energy credits (RECs), and low-carbon fuels. The company’s business units include ESG commodities spot exchange CBL, Australia-based water spot exchange H2OX, market data provider XSignals, and ESG-inclusive commodities multi-registry portfolio management system EMA.

The investments come as environmental commodity marketplaces, and particularly those for carbon markets, are anticipated to see significant expansion over the coming years, as companies and businesses increasingly launch net zero ambitions, and turn to carbon offsets and credits as a bridge to their own absolute emissions reduction efforts, or to balance difficult to avoid emissions.

Patrick Street, head of Goldman Sachs’ Global Markets Net Zero Solutions, said:

“The development of a robust and transparent infrastructure for environmental markets plays a key part in driving energy transition and broader decarbonization. We support Xpansiv’s effort to develop market infrastructure and trade advisory services to deliver seamless environmental solutions to companies globally.”

Alongside the capital raise, Xpansiv also announced the closing of its acquisition of environmental markets transaction and advisory services provider Evolution Markets. According to Xpansiv, the transaction will expand its service offerings and product development capabilities, and enhance Evolution Markets’ services to its global client base of 2,000 customers, including many of the world’s largest energy firms, companies, utilities, and financial institutions.

The transaction is the second recent acquisition for Xpansiv, following its purchase of energy and environmental markets registry infrastructure provider APX in August.

John Melby, CEO, Xpansiv, said:

“Evolution Markets brings a world-class team of professionals with the same level of focus and dedication to enabling the energy transition and delivering client successes that we strive for every day. We are excited to work with them and our clients to build the future of environmental markets. Our disciplined acquisition strategy is made possible through the backing of top-tier strategic investors, who share our belief in the environmental markets’ important role addressing the climate crisis.”

Carbon markets-focused products and solutions platform Rubicon Carbon announced its official launch today, aiming to “deliver greater scale, confidence, and innovation across all facets of the carbon market.”

The new platform is being launched with backing from global alternative asset firm TPG, with a $300 million capital commitment from its climate-focused investment strategy TPG Climate Rise, and its impact investing strategy, The Rise Fund.

The company stated that it is targeting total capital commitments of $1 billion, with participation in its initial equity financing expected from investors including Bank of America, JetBlue Ventures, and NGP ETP.

Rubicon is led by CEO Tom Montag and Chariwoman Anne Finucane, formerly Chief Operating Officer and Vice Chair of Bank of America, respectively.

Montag said:

“To deliver on net zero and keep as close as possible to a 1.5-degree pathway, companies must first reduce emissions within their value chain to the greatest extent possible. To balance any remaining emissions that cannot otherwise be eliminated right now, we must scale high-quality carbon credits in parallel.”

According to Rubicon, the launch comes as demand for carbon credits is rapidly increasing, while weaknesses and imbalances in the market are becoming apparent.

Jim Coulter, Founding Partner of TPG and Managing Partner of TPG Rise Climate, said:

“The growing carbon market will need new tools and financing solutions in order to reduce friction, democratize access, and improve quality. Rubicon Carbon was not designed as a replacement for aggressive carbon emissions reduction but rather as an end-to-end solution for corporations that have chosen to include high-quality carbon credits as part of their overall decarbonization strategy.”

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, with companies and businesses increasingly launch net zero ambitions, and turning 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.

Aiming to address these issues at scale, Rubicon’s platform provides technology-based services including proprietary curation and portfolio construction, enhanced monitoring and analytics. The company’s first product, the Rubicon Carbon Tonne (RCT), provides enterprise customers access to proprietary sets of both nature-based and non-nature-based carbon credits, backed by an owned inventory – 20 million tonnes of CO2e at launch – of high-quality, verified, broadly diversified carbon credits.

Finucane said:

“The latest discussions from COP27 underscore the critical role that developed markets play in channeling capital towards a vast supply of high-quality carbon reduction or removal projects, particularly in developing countries. Rubicon is designed to be the market-based solution that allows both the supply and demand side of the global carbon market to scale responsibly.”

Issuers listed on the Stock Exchange of Hong Kong are being encouraged to begin planning and building the infrastructure and systems necessary to meet future climate reporting requirements, as the exchange looks to further enhance climate-related disclosures in line with the Task Force on Climate-related Financial Disclosures (TCFD) framework and the new International Sustainability Standards Board (ISSB) climate standards.

The recommendation was made as part of a review published by the exchange into ESG disclosures, based on requirements instituted in 2020, which focused on board governance and oversight of ESG issues, as well as management of climate-related risks. For the report, the exchange sampled the ESG reports of 400 issuers.

According to the exchange, the review indicated good progress in ensuring that boards are giving necessary focus to ESG considerations. The report found that more than 95% of issuers disclosed their boards’ oversight and management approach on ESG matters, while 85% of issuers chose to disclose details on all new climate-related requirements, which include consideration of significant climate-related risks and mitigation measures, setting of certain environmental targets, and reporting on scope 1 and scope 2 GHG emissions. The report also found that around a third of issuers reviewed have started reporting on Scope 3 emissions, and around 5% have adopted climate-related scenario analysis for climate resilience assessment.

In the report, the exchange stated that it is currently reviewing its ESG framework, “with a focus to enhance climate disclosures amongst our issuers.” Aligning with the TCFD recommendations and ISSB standards would significantly increase reporting requirements above the current exchange rules, with requirements under the frameworks including reporting on climate plans, Scope 3 value chain emissions, and performance of climate scenario analysis.

The exchange said that it would take into account “the market readiness and the challenges issuers face.” The report also noted that the exchange has published a range of guidance and training materials, including guidance on climate disclosures to help issuers prepare TCFD-aligned climate change reporting.

Additional recommendations from the review included ensuring that issuer ESG reports provide information on supply chain risk management and green procurement practices, and that ESG reports and annual reports are published at the same time. The exchange also added that monitoring progress against ESG targets is key to boards’ evaluation of the effectiveness of measures taken, and that disclosure of information on the board’s progress review, and the results of the review, are required under the ESG Rules.

Hong Kong Exchanges and Clearing Limited (HKEX) Head of Listing, Bonnie Y Chan, said:

“Sitting at the heart of Asia’s capital markets, HKEX is well positioned to help drive the broad sustainability agenda across our markets. We are committed to promoting high standards of ESG practice and disclosure amongst our issuer community, through listing regulation, advocacy and education.”

European market infrastructure provider Euronext announced today the launch of two new indices aimed at offering investors with exposure to companies with strong gender equality performance. According to Euronext, the indices will be the first in a broader family of indices addressing challenges around gender balance in the workplace.

Euronext said that the new indices were developed in response to an increasing demand for “Social” thematic investments, and addressing UN Sustainable Development Goal (SDG) #5, “Gender Equality.”

Camille Leca, Head of ESG at Euronext, said:

“The launch of these indices is representative of Euronext’s corporate culture and values. Our company is diverse and inclusive by nature, and we see all forms of diversity as a key success factor of our federal model. We constantly innovate in our products and services offering to meet investors’ strong demand and need to carry out their ESG transition.”

The new indices, the Euronext Equileap Gender Equality Eurozone 100 and Euronext Equileap Gender Equality France 40, will include 100 Eurozone and 40 French companies, respectively, assessed as demonstrating a strong role in improving gender equality.

Companies are selected for inclusion based on scores provided by gender equality-focused data and insights provider Equileap. Companies are scored across four categories, including gender balance in leadership and workforce; equal compensation and work-life balance; policies promoting gender equality, and; commitment, transparency and accountability. The index also applies activity-based exclusions, and UNGC compliance as well as controversial activities exclusion.

Diana van Maasdijk, CEO at Equileap, said:

“It appears that high-performing companies with the drive to do the right thing when it comes to addressing gender equality at work apply the same ethos to other key ESG criteria. Investors looking to create a better society with equal opportunities for women at work can now use these indices to back high-quality, high-performing companies.”

Singapore Exchange (SGX) announced today a new initiative, aimed at enabling investors to identify green, social and sustainability fixed income securities. Under the new program, issuers of the sustainable bonds will be able to use an “SGX Sustainable Fixed Income mark” for securities that meet requirements including alignment with standards and disclosure.

The initiative comes as labelled sustainable bonds have captured a significant portion of the fixed income market, with global issuance reaching a record 16% of bond volumes last quarter, and remaining more resilient than the overall market. Commenting on the new initiative, Tan Boon Gin, CEO of Singapore Exchange Regulation said that, “sustainable investing is gaining momentum and SGX Group anticipates that such an assurance may therefore be helpful for other asset classes.”

Tan added:

“The SGX Sustainable Fixed Income initiative enables investors to easily identify fixed income securities that are issued to embark on sustainable projects meeting market expectations. Investors will benefit from knowing that these bonds have been independently checked for alignment with the recognised standards.”

In order to be recognized under the SGX Sustainable Fixed Income initiative, issuers will be required to meet a series of criteria, including ensuring that the securities align with recognized green, social or sustainability standards, obtain confirmation from a reputable external reviewer that the securities are aligned with the standards, and provide published reports setting out the securities’ alignment.

To retain recognition, issuers will be required to publish post-issuance reports as required under the standards, along with any material information that may affect alignment with the standards.

SGX said that it estimates that 200 SGX-listed fixed income securities already meet the SGX Sustainable Fixed Income criteria.

Lee Beng Hong, Head of Fixed Income, Commodities & Currencies, SGX Group, said:

“This recognition will help SGX Sustainable Fixed Income products stand out from among the close to 6,000 bonds listed on SGX at any one time. Issuers can use the recognition to demonstrate their commitment to these well-understood standards and raise their visibility and profile to investors who are interested in sustainable fixed income securities.”