CIBC completed its inaugural pilot carbon credit trade in July (Courtesy CIBC).

CIBC has completed its inaugural carbon credit trade between the Nature Conservancy of Canada and UK-based NatWest Group under Project Carbon.

“Nature is our ally in the face of climate change challenges,” said Catherine Grenier, president and CEO, Nature Conservancy of Canada, in a release announcing the legally binding transaction.

“The Nature Conservancy of Canada’s world-class Darkwoods Forest Carbon project taps the power and potential of private investment to meet our conservation and carbon reduction objectives.

“We are excited to be part of Project Carbon’s pilot trade, to join in driving advances in nature-based solutions through innovation.”

The Nature Conservancy of Canada is a leading land conservation organization active in properties and projects across Canada.

Verra, which manages GHG emission reduction certification projects, issued the voluntary carbon credits for the sale.

Project Carbon’s contribution

Project Carbon is a global platform created as a collaboration between CIBC, Itaú Unibanco, National Australia Bank and NatWest Group. The initiative launched in July and is designed to support corporations’ efforts to reach net-zero by connecting buyers and sellers of carbon credits on the voluntary carbon market.

Carbon offsets are emissions reductions credits awarded to one party for its sustainability activities, which can be sold to another party to compensate for its emissions. The goal of these offsets is to counteract companies’ carbon emissions — or “carbon footprints” — while contributing to a more sustainable future.

Investment firms, pension funds, post-secondary educational institutions, cement manufacturers, home heating distributors, tech giants like Google, Amazon and Lyft are examples of organizations which are attempting to reduce their carbon footprints through the purchase of carbon offsets.

Its creators say Project Carbon will facilitate:

– increased delivery of high-quality carbon offset projects;

– a liquid carbon credit marketplace with price certainty and transparency;

– the creation of a strong ecosystem to support the offset market;

– the development of tools to help clients manage climate risk.

The project is aligned with the leading Taskforce on Scaling Voluntary Carbon Markets (TSVCM), established by Mark Carney, a former head of the Bank of Canada and the Bank of England. He is now the UN special envoy for climate action and finance.

“CIBC remains committed to enabling our clients to achieve their climate-related goals through commercial solutions that lead to tangible progress,” said Harry Culham, senior executive vice-president and group head, CIBC Capital Markets, in the release. “Investments in technology and innovation are going to be important drivers of a reduction in GHG emissions.

“Project Carbon is one example of opportunities to unlock the potential of carbon removal, and we will continue to play an active role in helping this sector to grow.”

Project Carbon’s goals and key features

The pilot aims to help remove barriers to voluntary carbon offset purchasing as well as demonstrate the operational, legal and technical capability of the platform.

The platform is built using blockchain technology to provide reliable issuance and tracking of carbon credits across every transaction.

“Tackling climate change is everyone’s job. We’re helping to find solutions and support our customers as they take action to transition to Net-Zero by 2050,” says a combined statement from CIBC president and CEO Victor Dodig; Itaú Unibanco CEO Milton Maluhy Filho; National Australia Bank CEO Ross McEwan; and NatWest Group CEO Alison Rose, in the release.

“Project Carbon is a terrific example of how technologies such as blockchain can address existing barriers and make carbon offsets more accessible for our customers – as part of their broader plans to reduce overall emissions and achieve their own targets.”

The key features of the project include:

– represents the book of record for ownership of carbon credits;

– allows owners of credits to clearly demonstrate possession to the market, thus reducing risks of double counting and simplifying reporting;

– supports price discovery through the posting of executed trade sizes and prices to the market;

– promotes project investment through the transparent demonstration of market demand;

– provides full traceability and linkage back to source of the credit;

– assists Registries by facilitating the rapid scaling of client base;

– takes care of post-trade settlement, allowing all market participants including exchanges and marketplaces to offer value-added services on top;

– pilot built on a private Ethereum platform developed with ConsenSys.

The project is open to new member institutions in order to build further scale in the Voluntary Carbon Market.

About the partners

CIBC is a Canadian-based financial institution with 10 million personal banking, business, public sector and institutional clients. It offers a full range of services through its digital banking network and locations across Canada, the United States and around the world.

The bank has a target to achieve net-zero greenhouse gas emissions associated with its operational and financing activities by 2050. To support this aim, CIBC plans to increase its commitment to sustainable finance to $300 billion by 2030.

Itaú Unibanco is the largest bank in Latin America, present in 18 countries with more than 56 million customers.

National Australia Bank (NAB) is a financial services organization serving eight million customers at more than 900 locations in Australia, New Zealand and around the world.

NAB is Australia’s largest business bank, working with small, medium and large clients to help them start, operate and grow. The bank has been carbon neutral for 10 years and aims to deliver $70 billion in environmental financing by 2025.

NAB is an inaugural signatory of the United Nations’ Principles for Responsible Banking and the only Australian bank to have signed the UN Environment Programme Finance Initiative’s Collective Commitment to Climate Action, which works towards aligning business operations and lending portfolios to achieve net-zero carbon emissions by 2050.

NatWest Group is a leading banking and financial services group in the U.K. and Ireland under brands including NatWest, Royal Bank of Scotland and Ulster Bank. NatWest is the largest U.K. business banker, servicing one in four businesses across the U.K.