The London Stock Exchange has set listing rules for companies that finance carbon reduction projects. LSE’s rules aim to encourage investment funds and operating companies to raise billions of pounds through LSE listings to fund climate-friendly projects.
Under the new rules, a fund or company would have to issue a prospectus vetted by the Financial Conduct Authority that gives details of the carbon emission-cutting project it wants to finance.
“What this brings is proper transparency, proper due diligence and proper disclosure, so corporates and other investors truly know what they’re buying. That’s something that the voluntary carbon markets haven’t had before,” LSE Chief Executive Julia Hoggett said.
One investment fund backing the voluntary carbon market is expected to list this year, followed by others in 2023, Hoggett said. Companies operating carbon reduction projects would be added later.
Worth around $2 billion in 2021, according to Ecosystem Marketplace, the annual global market for voluntary carbon credits could hit $50 billion by 2030, consultants at McKinsey have estimated.
Adapted from an article in Reuters