Offsets getting the back-office treatment
State Street bank is offering its back-office services to customers investing in carbon credits.
Why it matters: The buy-in from a banking giant is yet another sign that carbon markets are going mainstream.
What's happening: State Street will begin handling "the financial plumbing" for carbon markets in response to client demand, WSJ reports this morning.
- That includes handling and valuing assets, gathering prices, and maintaining investment records — services that make trading easier for big investors like asset managers, hedge funds and private equity firms.
Zoom in: The bank will offer the services for both the mandatory or voluntary carbon markets.
Catch up fast: Mandatory markets in places such as California and Europe require polluters to buy credits for the emissions that their power plants and factories generate.
- Voluntary markets are what they sound like. Those credits help fund new clean energy and climate-tech projects.
Be smart: The move reflects intense investor interest in carbon credits. Anecdotally, investors have told Axios in recent weeks that potential buyers are throwing money at projects that promise to generate carbon credits, especially those that aim to remove carbon from the ambient air.