London Stock Exchange Launches First Fund Under New Market for Carbon Credits
Kanebridge News
Share Button

London Stock Exchange Launches First Fund Under New Market for Carbon Credits

Foresight Sustainable Forestry, a U.K.-based investment fund that develops commercial forestland, is the first company to take part in the new voluntary carbon market

Tue, Dec 13, 2022 8:48amGrey Clock 3 min

The London Stock Exchange Group PLC on Monday launched the first fund under its new market for carbon credits, which aims to provide capital to green projects and transparency in an opaque area of sustainable finance.

The new market offers a way for companies and investors to purchase carbon credits to offset emissions and meet net-zero commitments. Developers can raise funds through the exchange and use the money on projects to reduce greenhouse gasses. Companies and shareholders, in return for their investments, can receive carbon credits in lieu of cash dividends.

Companies can currently purchase carbon credits through brokers and private-market intermediaries. However, some companies find it difficult to get information about project developers and can struggle to identify specific projects—in areas such as forest protection or renewable energy—that fit their preferences, environmental lawyers said.

By launching the market the London Stock Exchange hopes to make it easier for companies and investors to access information about the projects that generate carbon credits, said Claire Dorrian, head of sustainable finance for the exchange’s capital markets and post-trade divisions. “I think the overarching principle behind all of this is transparency through disclosure,” Ms. Dorrian said.

Demand for credits in voluntary carbon markets is on the rise as more companies make net-zero commitments and position themselves as taking steps to improve the environment. Just under $2 billion in carbon credits were sold in 2021, up from $520 million a year earlier, according to Ecosystem Marketplace, which tracks data on environmental finance. By contrast, mandatory carbon markets in Europe and elsewhere force major polluters to limit their emissions.

Foresight Sustainable Forestry Co. PLC, a London-based investment firm, is the first company to take part in the new voluntary carbon market, the London Stock Exchange said Monday. Foresight invests in developing land for commercial forests, primarily in the U.K.

The company, which listed on the public markets in 2021, expects to raise additional funds in the year ahead using its Voluntary Carbon Market, or VCM, designation, meaning shareholders could elect to receive carbon credits in lieu of a cash dividend, said Richard Kelly, co-head of Foresight. “We’d be looking to attract companies, and ideally companies with science-based, net-zero pledges, to join us as shareholders,” Mr. Kelly said.

For the new market, developers must disclose the percentage of their total assets invested in eligible climate-change mitigation projects. They must also disclose the industry standards they use to certify their projects. Operating companies or investment funds on the exchange are eligible for the voluntary carbon market and must meet all other requirements for the market on which they are listed. London Stock Exchange Group also operates the FTSE 100 and FTSE 250 indexes and provides financial data.

Companies are facing increasing pressure to disclose climate-related information from regulators and standard-setters across the globe. Finance departments, in particular, are taking on a bigger role when it comes to allocating capital toward carbon offsets and reporting on pollution. “It is becoming more of a financing function, more of a treasury responsibility,” Ms. Dorrian said.

Still, the new market could come with challenges for companies looking to invest. For instance, those interested in crafting a particular narrative about their green investments may find it hard to do so if the credits they receive are tied to several underlying projects, lawyers said.

Underlying demand among companies for purchasing credits through the exchange also remains an open question. “It’s maybe a question of, ‘If you build it, they will come,’” said Chris Staples, a partner at the law firm Linklaters LLP.

Ms. Dorrian, the London Stock Exchange’s head of sustainable finance, declined to provide a specific figure on the number of companies and funds the stock exchange expects to launch on the voluntary carbon market in the coming year. The new market represents a change in how companies currently buy carbon credits, and it takes time for funds and companies to raise new funds, she said.

“It’s going to take, I think, a little bit of time for the market to digest,” Ms. Dorrian said.


Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts

Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’

Related Stories
Tornados! Fire! Ice Storms! These Real-Estate Agents Risk Life and Limb for the Sale
By ROBYN A. FRIEDMAN 03/12/2023
Higher deposits, stretched LVRs & more borrowers needing mortgage insurance
By Bronwyn Allen 30/11/2023
Princess Diana’s Blouse, an Animatronic E.T. Head, and ‘Big Lebowski’ Robe Headline Memorabilia Auction
By Eric Grossman 30/11/2023
Tornados! Fire! Ice Storms! These Real-Estate Agents Risk Life and Limb for the Sale

Nothing stays these brokers from the swift completion of their appointed showings

Sun, Dec 3, 2023 3 min
What is the worst weather you have ever had to contend with while showing a home?

Justin Fox, broker/owner, Re/Max Professionals, Cottage Grove, Minn.

In the summer of 2011, I was driving some buyers—a mother from out of town with her two young daughters, each under 6—to look at homes. The first two showings were uneventful, but as we headed to the third, we encountered a giant wall cloud on the road. I see wall clouds all the time, but for those not familiar with them, it’s a giant tower of clouds, and it’s very dark and ominous-looking, so it can be scary. My buyer, who claimed to have been some sort of weather watcher, started freaking out, saying things like, “That’s a wall cloud! It’s dangerous! We’re going to have a tornado!” That in turn caused the daughters to start screaming and crying hysterically. They were kicking so much in the back that they caused the threading of my leather seat to come loose. I did my best to calm them down, but then the torrential rain and thunder started, and that led to more screaming from the kids. Thank God we made it to the next house within 10 minutes. I pulled my car into the garage to avoid the hail, and we sheltered in the basement for 25 minutes until it lightened up outside. Then we went on with our showings like nothing ever happened.

Victoria Rong Kennedy, associate broker, the Corcoran Group, New York, N.Y.

I wouldn’t say this was the worst weather, but it was definitely the weirdest. On June 7, 2023, I had three private showings lined up at 2:30 p.m., 3 p.m. and 3:30 p.m. to show my listing on the Upper East Side, which was a duplex penthouse with three terraces listed for $3.3 million. That morning, Canadian wildfire smoke was blowing through the sky of Manhattan. They were telling everyone on TV and radio to stay home all day, and I kept watching my emails and texts, hoping that all three groups of buyers would cancel their showings, but no one did. By 1:30 p.m., the sky was really dark. There was almost no visibility, but, still, there were no cancellations. At 2 p.m., I searched for an old Covid mask, put it on and walked out like a hero to go on the combat field. I could barely see anything a half block away, but I walked 11 blocks and two avenues and managed to get to the building. Well, all three groups of buyers and their brokers showed up on time. We all chatted about how strange the weather was. We put our masks back on when we stood on the living room terrace, which overlooks Billionaires’ Row, but we had no visibility. The sky was red and black, and all we could see was a small circle of light in the sky. It looked like the moon behind heavy clouds. It was like a scene from a movie.

Jeffrey Decatur, broker associate, Re/Max Capital, Latham, N.Y.

Living in upstate New York, I have experienced all kinds of bad weather—snow so deep it was up to my thighs and rain so hard that I wished my shower had that much pressure. However, the worst took place in April 2017, when I was showing a home in Waterford, N.Y., a suburb of Albany. It was during a late-season blizzard that came on fast, and there had to be about 2 feet of snow. The home had a normal-size driveway, but it was a foreclosure and was not shoveled. So, my client and I trekked up the crunchy, snowy driveway and eventually got into the house. As we were walking around, complaining about the Arctic blast and blizzard, I heard the sound of babbling water. I thought it was a fountain, so my buyer and I continued to walk around the house. As we moved toward the garage and family room, the babbling got louder, and as we headed for the basement, we saw that the pipes had frozen. The basement ceiling had fallen, and water was pouring in from the ceiling and the walls. The floor had about 3 inches of water and ice. I called the listing agent and left a message, but I couldn’t just leave the water running, so I waded through the freezing cold water in the basement and turned the water off. I didn’t really think that through, because I was drenched and then had to make my way back through the house and out into the blizzard again. When I opened the front door, I nearly froze immediately, and by the time I got to the end of the porch, I was crunchy and icy. When I got to my car, parked at the end of the driveway, my hair was frozen to my face, and I could barely bend my legs or feel my hands. I was walking like the Tin Man. It took me several hours to thaw out.

——Edited from interviews


Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts

Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’

Related Stories
Australia’s Unemployment Rate Continues Steady Rise
By 16/11/2023
London’s Luxury Home Market Has Been Dragging for Years. These Sellers Are Diving in Anyway.
Room to breathe at the Bend
By Belinda Aucott 10/11/2023
    Your Cart
    Your cart is emptyReturn to Shop