The Green Assets Wallet Launch – Blockchain Meets Finance

As country representatives are due to meet at the global climate conference in Poland next month, the financial gaps to reach the climate targets, loom heavily above everybody’s head. Signed by 195 countries, the Paris Agreement is the first global and legally binding climate deal.

The Green Assets Wallet (GAW), an innovative blockchain-based platform to validate green investments, aims to tear down some of the barriers that hamper capital flow into more sustainable initiatives. The platform will be officially launched at Climate Finance Day in Paris on November 27, 2018.

 
 

Digitalisation Unlocks Climate Action

Significant investments are needed to reach the climate targets of the Paris Agreement and to fulfil the ambitions of the UN Sustainable Development Agenda.

To achieve the Sustainable Development Goals (SDGs), the United Nations Conference on Trade and Development (UNCATD) estimated $5 to $7 trillion are required. At the same time a recent report by the Business & Sustainable Development Commission estimated that achieving the SDGs could open up to $12 trillion of market opportunities and 380 million new jobs by 2030.

Unlikely to reach the 2˚C target, barriers to finance decarbonisation projects and sustainable initiatives seem to be around plenty: market incentives are lacking, government regulation and policies are often not in place, and market-driven solutions are missing. At the recent Climate Innovation Summit, Harald Rauter from ClimateKic emphasized that digitalisation, data analysis and data encryption and –transaction (such as blockchain and associated distributed ledger technologies) are key levers for a successful transition to a zero-carbon economy.

Mind the Gap – Fintech Links Money to Impact

Digitalisation may be one of the keys to unlock the necessary capital to finance climate and sustainable action. The Green Assets Wallet is a practical solution as it cuts costs for green bond issuers for verification and reporting of green promises on one hand; and injects trust and transparency for investors on the other, making a wider range of investment opportunities accessible.

“The launch of the Green Assets Wallet could not come at a more fitting time. 2018 is the year of milestones in sustainable finance. A mere decade ago the World Bank issued the very first green bond. Vasakronan, one of our partners, was the first company in the world to issue a green bond, exactly five years ago around the same time as Gothenburg became the first city to issue green bonds,” said Cecilia Repinski, Executive Director, Stockholm Green Digital Finance.

By reducing costs, increasing efficiency and validity in impact reporting the platform essentially accelerates the market for green investments. New issuers or issuers from emerging markets that sit on potentially high impact projects can demonstrate trust and successfully attract investments.

“Being part of this unique initiative and taking green financing to the next level is exhilarating. We hope that together with our partners, the Green Assets Wallet will attract more interest and gain momentum in the market. The platform’s setup and transparency make it a win-win situation for all, including those that benefit from where green capital is invested, such as in developing countries.”

The GAW was developed to meet the growing appetite for creative solutions in the green debt market. Leading investors and emerging and developing market issuers have shown strong interest in the applied technology. It could be a potential game changer in support of levering high impact green debt transactions globally.

The project is funded and co-developed by the Emerging Markets Dialogue on Finance (EMDF), which is a project of Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, commissioned by the German Federal Ministry for Economic Cooperation and Development (BMZ). A full description of the initiative and its partners can be found here.