The London Stock Exchange announced the launch of its Voluntary Carbon Market (VCM) with the publication of the final admission and disclosure standards for VCM designation.
The VCM will enable funds and operating companies to raise capital for climate change mitigation projects that provide carbon credits. In addition, this will give a new solution for corporates seeking access to long-term carbon credits to boost their decarbonisation strategies and exposure for investors to an asset class with a long-term supply of carbon credits. Therefore, this addresses two significant challenges: access to capital at scale for developing new climate projects worldwide; and primary market access to a long-term supply of high-quality carbon credits for corporates and investors.
The London Stock Exchange initially announced its intention to establish a VCM marketplace in November 2021 at the COP26 climate conference. The new market is now open for closed-ended investment funds listed or admitted to the Exchange’s markets.
The designation requires issuers to produce additional disclosures relating to the projects they are directly or indirectly financing. It includes the qualifying bodies’ standards whom the disclosures are in line with, expected carbon credit yield and the extent to which they meet the United Nations Sustainable Development Goals.
“Our goal is to facilitate the financing of projects that are focused on climate change mitigation. Today’s publication of our admission and disclosure standards marks the launch of the first public markets solution to help raise capital for the voluntary carbon market. It paves the way for capital at scale to be channelled into a range of climate change mitigation projects, while providing corporates and other investors with net zero commitments with the ability to access a diverse supply of high-quality carbon credits.”
Julia Hoggett, CEO, London Stock Exchange plc