On a High Note: London Stock Exchange Boosts Carbon Credits

On a High Note: London Stock Exchange Boosts Carbon Credits

The London Stock Exchange (LSE) has become the first trading center in the world to publish listing rules regulating carbon trade, giving a boost to the carbon offsets industry. Under the new regulations, companies will be able to submit plans detailing carbon removal projects to the financial conduct authority. Others, then, will be able to invest in the project, and will be paid out in carbon credits, instead of in dividends, with one credit equaling one ton of carbon removed from the atmosphere. The new regulations are expected to bolster and expand carbon removal projects, while increasing transparency, and easing carbon credit trading.

At a press conference, Julia Hoggett, the Chief Executive of the LSE told reporters that, the rules would allow capital “to be channelled into a range of climate mitigation projects” while also giving investors “the ability to access a diverse supply of high-quality carbon credits.”

The LSE’s announcement comes on the heels of the SEC’s proposed plan to mandate climate risk disclosure among publicly traded companies. Both are significant developments that could go a long way in fighting greenwashing in the corporate and financial sectors, and are an essential component of a green transition given that 100 companies are responsible for 71% of emissions.

CNBC: Why Big Tech Is Pouring Money Into Carbon Removal, June 28, 2022.

CNBC: Both carbon tax and emissions trading systems are needed, says carbon exchange, March 24, 2022.

Stansberry Research: Carbon Credits Set to Explode 20-Fold by 2030, Says Ex-Goldman Sachs Strategist, February 18, 2022.

Bloomberg: Carbon Credits as an Asset Class, January 28, 2022.

SEC: The SEC & Climate Risk Disclosure | Office Hours with Gary Gensler, July 28, 2021.

CNBC: Why Tracking Carbon Emissions Is Suddenly A Billion Dollar Opportunity, September 14, 2021.