State Street, one of the world’s leading providers of financial services to institutional investors, announced today the launch of State Street Carbon Asset Servicing Solution, a new solution aimed at helping asset managers and owners integrate carbon-related assets such as credits and allowances into portfolios, and make it easier to trade and manage carbon assets.

According to State Street, the new solution comes as the market for carbon-related assets is experiencing rapid growth, with approximately 12.5 gigatons of emissions traded last year, and with industry estimates for a 15x increase in demand for carbon credits between 2021 – 2030, and as global efforts increase aimed at developing governance and market infrastructure for carbon trading, which has historically been made up of disparate components and manual systems.

The new solution comes as the market for carbon-related assets is experiencing rapid growth, as companies and businesses increasingly launch net zero ambitions and turn to offsets as a bridge to their own absolute emissions reduction efforts, or to balance difficult to avoid emissions, and as governments ramp  up cap-and-trade industry carbon allowance systems, such as European Union Allowances and California Carbon Allowances programs.

According to State Street approximately 12.5 gigatons of emissions traded last year, and industry estimates forecast a 15x increase in demand for carbon credits between 2021 – 2030, while global efforts are emerging aimed at developing governance and market infrastructure for carbon trading, which has historically been made up of disparate components and manual systems.

Phil Kim, Global Head of ESG Product at State Street, said:

“Our new carbon asset servicing solution will help clients gain access to this emerging asset class so they can directly hold carbon allowances and credits and trade them as they would other products, and ultimately look to maximize the potential of their investment portfolios using State Street’s fund administration expertise.”

The new solution includes fund administration and depositary services for carbon assets, with offerings ranging from recordkeeping and NAV calculation to reporting and other oversight functions.

Kim added:

“As businesses continue to move toward models that reduce greenhouse gases and emission standards increase in scale and magnitude, the price of carbon offsets are likely to increase. Investing in carbon assets can help fund the energy transition and diversify portfolios, all while offering the opportunity for investment returns.”

The post State Street Launches Investor Services for Rapidly Growing Carbon Market appeared first on ESG Today.