Embarking on the green journey

THIS WEEK'S TOPIC: How do you see carbon trading as a tool for businesses to reduce their greenhouse gas emissions?

Lawrence Loh Director, Centre for Governance and Sustainability NUS Business School

As a market-based mechanism to reduce greenhouse gas emission, carbon trading is an effective moderator. However, it cannot be a steady-state solution as businesses can still pay off their emissions. In the longer term, it is better to cut these emissions at source through sustainable practices and products.

Key stakeholders such as consumers, investors and regulators can continue to exert pressures on businesses to have much smaller carbon footprints. It is not a wild dream - net-zero carbon emissions can actually happen in self-sufficient ways if the net incentives are positive.

It is only through businesses realising their self-interests that carbon neutrality can be reached for all, albeit business by business, one business at a time.

Victor Mills Chief Executive Singapore International Chamber of Commerce

Carbon trading is a means to an end. It is not an end in itself. It is a way for companies to enable their transition towards eliminating emissions of greenhouse gasses over time. This is a critical transition for companies to embark on and achieve in their own best interests.

The transition is the best hope we have to reduce the negative impact of climate change and ensure the survival of the human race and our planet. Carbon trading is not an alternative to embarking on and achieving the transition. It is the means to that important and urgent goal.

Patrick Lee Cluster CEO, Singapore & ASEAN Markets Standard Chartered Bank

The need to tackle climate change is real but often our efforts to decarbonise are not enough to reverse the damage to our planet. Carbon offsetting should exist as an integral and complementary part of companies' broader climate strategies to deliver a viable net-zero solution.

By participating in a transparent carbon market, companies can buy quality carbon credits to compensate for hard-to-abate emissions or sell credits to finance nature-based solutions. With the announcement of Climate Impact X, we are one step closer to enabling companies' net-zero goals.

Yeoh Oon Jin Executive Chairman PwC Singapore

Reaching net-zero by 2050 will indeed be very challenging, but carbon trading can help contribute towards the reduction of greenhouse gases by providing an avenue for companies to offset their emissions by buying carbon credits.

On top of that, a vibrant carbon trading market will encourage the creation of high quality carbon credits as the value of carbon credits can be priced and monetised via market mechanisms. However, in order to scale up and deepen the voluntary carbon markets, it is critical that quality and integrity over the carbon credits are intact, and are held to high standards.

Loh Boon Chye Chief Executive Officer Singapore Exchange

Singapore is in a strong position to play a leading role in meeting Asia's decarbonisation challenge. A commitment to sustainability needs to be backed by action, and we will fulfil our role as an exchange by leading and supporting the ecosystem with trusted financial solutions and regulation towards a greener economy.

Businesses have to first reduce their emissions footprint within their operations and value chains, before neutralising hard-to-abate emissions. During the transition process, they can additionally compensate for emissions that are still produced using quality carbon credits that remove, reduce and prevent emissions. Through Climate Impact X, SGX and its partners will help catalyse change and deliver growth in a sustainable manner.

Jeffery Tan Group General Counsel Chief Sustainability Officer Jardine Cycle & Carriage

The desire for businesses to decarbonise and reduce their greenhouse gas (GHG) emissions is now firmly established with many racing to achieve net-zero emission targets. The success of carbon trading and emerging platforms will depend on factors like the quality and liquidity of carbon credits offered, as well as the transparency in the pricing of the carbon credit products.

However, it needs to be recognised that these are only interim measures. Ultimately, carbon trading will need to lead to the discovery of lasting solutions that address the root problems of climate change. This can only come through the adoption of innovative technologies or the hard decision of totally giving up some difficult-to-abate industries and activities.

John Kim Managing Partner Amasia

While every corporation has the responsibility to do its part, some are better placed than others to pluck the proverbial low hanging fruit in reducing emissions. Carbon trading serves a crucial role in capturing maximum systemic benefit despite these differences.

As with any relatively less mature market, critics have found an abundance of ammunition to fire including a lack of transparency and greenwashing. I believe this indicates the opportunity in carbon trading rather than evidence that a market mechanism is not appropriate.

Ong Pang Thye Managing Partner KPMG in Singapore

The climate challenge demands multifaceted solutions to balance today's livelihoods and lives. As a resource allocation mechanism, carbon trading can be an effective tool for businesses to bring down overall greenhouse gas emissions. The critical aspect is to make any related measurements, reporting and verification (MRV) robust and transparent.

Trading of carbon credits channels funds from polluting industries towards green projects and innovations. This, together with carbon tax and green financing, gives the needed push for enterprises to adopt low carbon alternatives, while boosting the development of green technologies, renewable energy and the restoration of natural ecosystems.

However, carbon trading will have its share of critics - any concerns should be addressed with technology, appropriate standards, rigorous MRV requirements and independent audit to build trust in the overall system.

Max Loh EY Managing Partner, Singapore and Brunei Ernst & Young LLP

Achieving net zero emissions will take concerted effort across entire ecosystems. Carbon credits can serve as a useful tool to complement internal carbon emission mitigating initiatives by neutralising residual emissions. This is especially relevant for activities that cannot be made carbon-free through technology intervention or change in operation.

Carbon credits also serve to finance carbon reduction or removal projects, which, by themselves, may not be financially viable, and give investors and developers confidence in such projects by providing a clear signal on carbon credit demand.

Additionally, they incentivise companies to invest in carbon-mitigating projects or implement low-carbon technologies. While carbon exchange should not be the be-all and end-all in the goal towards net-zero, it allows businesses to flip the script on carbon by turning it into a source of commercial and long-term value.

Pascal Lambert Group Country Head, Singapore Head of SEast Asia and India Societe General Group

As a founding member of the Net-Zero Banking Alliance, Societe Generale recognises that urgent action is needed to address climate change on the road to net-zero.

In order to achieve progressive energy transition and decarbonisation globally, in addition to shifts to renewable energy, electrification of industry and energy efficiency, companies may still have a residual carbon footprint that needs to be mitigated.

Natural carbon sequestration is one potential pathway to achieve this. A robust global infrastructure to support this pathway is yet to be developed, and we welcome the launch of the Climate Impact X joint venture in Singapore and look forward to supporting its ambition to develop a carbon market of high-quality, trustable credits in order to catalyse the market for natural climate solutions.

Malavika Bambawale MD, Sustainability Solutions - APAC ENGIE Impact

Trading of carbon offsets can be an important instrument for companies to limit the impact of their greenhouse gas emissions as part of a net-zero target. It should not be misused to allow the continued use of legacy technologies (such as coal-powered generation). Rather, it should be a short-term transitionary lever on a transformative path to net-zero emissions, or to offset residual emissions that are impossible to eliminate within a certain timeframe.

High quality carbon offsets are key in channelling investment into critical nature-based solutions (including preservation, restoration, and regeneration of forests, wetlands, and more) which put people at the heart of climate solutions for generations to come.

Bai Bo Executive Chairman and Co-Founder Cyberdyne Tech Exchange (CTX)

The "cap and trade" regime for carbon has created a thriving market for businesses to offset greenhouse gas emissions.

But challenges abound in the implementation of carbon offsets. Among other things, a lack of agreement on Article 6 of the Paris Agreement, certification of credits generated from an emissions reduction project, and proving that a project would not have happened without the credits incentive.

As a journalist observed: "Offsets are an imaginary commodity created by deducting what you hope happens from what you guess would have happened."

CTX will soon launch a digital exchange which will require issuers and investors to disclose the carbon footprints of all asset-backed tokens traded. We believe this unique tracking feature will contribute to solving climate change.

Takehiko Ryu Managing Director Panasonic Asia Pacific Pte Ltd

Carbon trading provides businesses with the opportunity to cut cost by reducing greenhouse gas emissions and increase revenue by generating tradable carbon credits. This not only encourages businesses to invest in clean energy sources and green development projects, it also encourages them to be more involved in tackling environmental issues at the national, regional and global levels.

At Panasonic, we aim to reduce energy usage and achieve net-zero carbon dioxide emissions for all our business activities by 2030, to contribute to building a sustainable society. This includes transforming our sites to use only renewable energy to help reduce greenhouse gas emissions in the longer term.

Ivan Pavlovic Senior Energy, Green & Sustainable Specialist Natixis

Cap-and-trade systems for carbon emissions are often presented as the most economically relevant solution to the climate externalities of various sectors. While it sets a limit in the volume of carbon emitted, this system also leaves the economic actors the choice between purchasing allowances covering their greenhouse gas emissions and making investments aimed at reducing/eliminating these emissions, or ultimately leaving the given activity if the decarbonisation investment proves too costly.

However, to produce such an outcome, the carbon trading scheme must be supported by a set of ambitious yet credible climate goals in the related jurisdiction and must be designed so as to bring out relevant carbon price signals underpinning the capital allocation decision.

Seah Kian Peng Group CEO FairPrice Group

The commitment by corporate entities to reduce carbon emissions in their business operations for sustainable development has been gaining significant momentum. The carbon trading system would complement and empower companies' efforts towards managing their overall carbon footprint.

At NTUC Enterprise and FairPrice Group, promoting a low carbon economy is on our agenda. We set specific goals and targets to develop a strategic framework across our various businesses - these are work in progress and we certainly need to do more.

Aligned with the Singapore Green Plan, our sustainability efforts are three-pronged which include embracing a circular economy. Beyond efforts such as Green Mark certifications and going paperless, we also galvanise the community to join us in initiatives like bring your own bag, tree-planting, eco-run, among other activities to raise awareness that no individual effort at mitigating climate change is too small.

Naveen Menon President, ASEAN, Cisco Board Member, Cisco Foundation

Carbon credits are a good start in driving climate resilience. However, I believe that the best approach to reversing climate change is to reduce absolute emissions.

This begins with companies setting clear and ambitious goals to reduce greenhouse gas emissions associated with their operations - an approach that Cisco continues to take as we integrate circular economy principles across our business.

We need to support bold and innovative solutions that reduce the carbon already in the atmosphere and regenerate depleted ecosystems. We also need to encourage community engagement initiatives to spur long-lasting change and collective action. Finally, we need to increase access to green jobs and training.

As a Trustee of the Cisco Foundation, I am excited by our contribution to the climate movement across the region. The foundation is committing US$100 million over 10 years to fund non-profit grants and drive investment in climate solutions.

Shaun Hon General Partner Motion Ventures

Carbon trading will make a positive impact on greenhouse gas emissions only if we can boost the integrity of carbon credits in two ways. First, by introducing technology - such as readily available Internet of Things tools - to ensure we are measuring emissions precisely across a global scale. And second, to create a standard that will make it easier for independent parties to verify that volumes of carbon dioxide are exchanged at the right offset. Startups will be critical to accelerate innovation here, and it is encouraging to see more emerge to develop better tools for our future.

Helen Ng Chief Executive Officer Lock+Store

Reducing carbon emissions through abatement efforts should be a priority if we are serious about combating climate change, but we need a supplementary transitional mechanism where carbon offset credits play a part.

Some sectors or companies find abatement efforts challenging. Having a trusted carbon trading platform that is committed to high quality carbon credits builds confidence for both buyers and sellers working towards a low carbon economy.

David Kuo Co-founder The Smart Investor

Businesses will come under increasing pressure from shareholders, consumers, and other stakeholders to do the right thing. For some, a switch to zero-carbon will be easy. For others, the transition will be much harder. But they must still be given the opportunity to try - not because it will silence the critics, but because it is the right thing to do.

For some companies, buying carbon credits voluntarily will give them time to find suitable solutions. The Climate Impact X is a suitable platform for that. Hopefully over time, demand for carbon credits will diminish, not because businesses will not buy them but because they will not need to buy them anymore.

Hoe Boon Chye Chief Executive Officer Barghest Building Performance (BBP)

Carbon trading, used in tandem with businesses' sustainability roadmaps, could enable companies to work towards carbon neutrality in a sustainable manner.

Leveraging on the purchase of carbon offset credits, businesses could continue to look into their existing carbon footprint and explore readily available solutions to reduce greenhouse gas emission.

One viable option is optimising energy efficiency where use of the Internet of Things and software have enabled high returns at low investments. Another option is to progressively integrate sustainability into a product's value chain, from design to fulfilment.

Lex Lee Chief Strategy Officer TOP International Holding

There is always that concern about abuse of the carbon credit system in which organisations take the easy way out to reduce their greenhouse gas emissions on paper, rather than trying their best to reduce it at source.

Nevertheless, carbon credits as a tool does provide an avenue for companies that have exhausted all possible options to achieve carbon neutrality. It could bring about real change if the design of the system can ensure "real" net carbon reduction.

Since the signing of the Kyoto Protocol 24 years ago, this has continued to be a work in progress. A huge dose of urgency and political will is required to move this forward before it is too late.

Yu Tat Ming Chief Executive Officer PacificLight Power

Carbon trading is a readily accessible and powerful tool for businesses to help realise their carbon emission reductions. It provides financial support for the development of carbon-reduction projects and technologies, including solar facilities and efficiency upgrades.

Established carbon trading platforms provide stringent regulatory standards for businesses to be transparent and accountable for their commitment to reduce global greenhouse emissions.

PacificLight laid the groundwork for the transition to a low-carbon future in 2014, by having its power plant certified under the United Nations Framework Convention on Climate Change and the Verified Carbon Standard so as to provide carbon credits to companies looking to reduce their carbon footprint.

Chia Tek Yew Vice-Chairman of Singapore Oliver Wyman

Carbon trading does not, per se, help businesses reduce their greenhouse gas emissions. Indeed the availability of carbon credits will technically allow businesses to continue to emit greenhouse gases and yet be seen to be carbon-neutral by using such credits to offset their emissions.

However, in the short term, it is still a very useful tool in our overall climate change ambitions. In reality, even when businesses have committed to zero-carbon targets, achieving them will require time and effort especially in sectors where emissions are somewhat unavoidable.

In these cases, businesses should attempt to reduce as much emissions as possible and use carbon credits to offset the rest. Essentially, the credits are used to fund other carbon removal activities elsewhere which overall will help reduce carbon globally.

This buys time for businesses to progressively reduce their actual emissions rather than just relying on credits to comply with regulations. Hence, it is important to ensure that such credits are used only in tandem with actual emission reduction efforts.

Sylvie Ouziel International President Envision Digital

Carbon trading plays two symmetrical roles. First, to incentivise and reward transition players. For instance, Tesla's largest source of profit comes from selling carbon credits to car original equipment manufacturers (OEMs) that were slow to move to electric vehicles and are now bearing increasing carbon tax from the European Union for the emissions of every internal combustion engine (ICE) car they put on the roads.

Second, to allow players that cannot physically decarbonise "here and now" at the point of their carbon emissions to actually virtually "sponsor" carbon dioxide removal from the atmosphere.

However, this must be treated with caution as one must ensure that this "remote sponsoring" is measurable, real, and additional.

Ensuring that the offset is happening in proximity to the emission (time-wise and space-wise) and that it is fully traceable in real time, genuinely additive and contributing, is an increasing expectation from regulators and public opinionators. This makes the use of near real-time Artificial Intelligence of Things quite meaningful. Physical, digital and trading realities need to be visibly aligned to ensure credible and truly impactful scale-up of carbon trading.

Mario Singh Chief Executive Officer Fullerton Markets

This is definitely the way forward.

Critics of carbon trading claim that companies with large carbon footprints are still capable of significant emissions. However, this is to be expected because firstly, energy needs especially in developing countries will continue to rise over the next decade. Secondly, fossil fuels such as coal, crude oil and natural gas are still the cheapest way to generate electricity for many of these countries.

A key milestone for industry watchers is the actual demand for voluntary carbon credits, which is expected to grow 15-fold by 2030. I am confident this will happen sooner rather than later for two reasons.

Firstly, some of the largest tech companies such as Microsoft and Amazon have also pledged to be carbon-negative or carbon-neutral by certain deadlines. Many other companies are already jumping on the bandwagon too. Secondly, the financial sector is backing this. According to Bloomberg, total sustainable assets may hit US$53 trillion by 2025, representing a third of global assets under management.

Ronnie Lee General Manager Lenovo Singapore

Efforts to combat climate change by companies cannot be one-off attempts, constrained by budget concerns or motivated by publicity. While carbon trading is a viable first step to get companies to start paying attention to their carbon output, true change will only occur when companies make a shift to ingrain sustainability in their corporate DNA.

Lenovo achieves this by setting aggressive but realistic sustainability targets to cut Scope 1 and Scope 2 greenhouse gas emissions in half by 2030, further strengthening its position as a trusted and purpose-driven technology company. Companies can also choose to work with like-minded vendors with sustainable practices - a measure that Lenovo will handle for its customers under its CO2 Offset service. Carbon trading is a step in the right direction for companies to act more responsibly, with sustainability at their core.

Wendy Johnstone SVP & COO APAC Zendesk

Carbon trading is a very nuanced topic, with critics on both sides of the argument. Zendesk has been involved in the voluntary carbon market since 2018, and has also needed to navigate the lack of standardisation of the marketplace at times. While we remain supporters of carbon trading, we also believe that quality and standardisation is more important than quantity.

At Zendesk, we are not in it to maximise carbon accounting or tree planting. Our upcoming Global Impact Report sheds more light on how we are evolving our approach to reducing our carbon footprint. Starting this year, we are turning more of our attention to the real work of reducing emissions and storing carbon permanently in the earth as part of a multi-pronged approach.

Dileep Nair Independent Director Thakral Corporation Limited

Businesses have a huge role to play in fighting climate change. They produce just about everything we buy, use and discard. To reduce their carbon footprint, companies move towards sustainable sourcing, efficient production and use of "green" energy.

Such accounting, though, ignores the so-called Scope 3 emissions associated with the use and disposal of their products. A carbon trading market allows companies to offset their residual emissions as well as Scope 3 emissions to really move towards net-zero.

Carbon trading harnesses the efficiency of the market and internalises the external cost of pollution caused by companies. Cap-and-trade schemes have been effective in the past. Trading in sulphur dioxide in the 90s helped reduce acid rain in the US.

Businesses here will be encouraged to engage in carbon trading with Singapore's CIX initiative that promises to increase liquidity and scale of transactions.

Jimmy Yam Vice President, East Asia Eaton

We are excited about the possibilities Climate Impact X can unlock in green innovation and investments. However, while such initiatives are a step in the right direction, it is just one piece of the broader climate change puzzle. Adopting a holistic approach and taking concrete actions to navigate the ongoing energy transition is necessary for true impact.

At Eaton, we have taken a multi-pronged strategy towards our sustainability commitment. This involves purchasing carbon offsets, implementing energy-efficient methods and renewables, and investing in research and development for sustainable solutions. A diversified approach is necessary in the long run to attain viable gains for our collective green journey.

Luke Lim Director Phillip Securities Pte Ltd

The UNEP Emissions Gap Report clarified that our emissions trajectory is still increasing sharply, and we are set to miss the Paris Agreement target.

This impending crisis presents an opportunity for Singapore. A carbon market would incentivise big emitters to reduce their emissions, while allowing companies that have bettered their commitments to sell credits. Carbon trading can fill the gaps left by companies that cannot scale quickly enough, and provide capital required to fund technological and nature-based climate solutions.

It is critical that carbon capture and offsets not be used as a means to justify business as usual. It is supplemental to actions needed to achieve carbon neutrality. Businesses still need to drastically reduce and report their emissions.

Eric Neo Say Wei President HG Exchange

Carbon trading is positive. The sale of carbon credits can produce a flow of money to developing businesses to preserve carbon sinks and to develop a foundation for low greenhouse gas emissions.

To ensure the integrity and quality of carbon offsets, trading also promotes employment in new technologies, in areas from satellite monitoring to blockchain technology for tracking and transparency. When a business buys an offset, it knows it is verifiably reducing emissions.

As with any financial marketplace, a strong regulated exchange infrastructure is important - the marketplace should be accessible by a broad set of participants and provide price transparency.

Chua Hock Leng Managing Director, ASEAN Pure Storage

Carbon trading is one way for businesses to meet their carbon reduction goals but it should only be a part of a long-term strategy towards decarbonisation and sustainability. With new efforts led by the World Economic Forum and the EU aimed at standardising metrics and reducing "greenwashing", businesses will be held more accountable for their efforts.

Technology companies like Pure Storage have an obligation to make our solutions as friendly to the environment as possible. One area that is attracting attention is the data centre, where the proliferation of data generation, consumption and storage has led to unsustainable energy usage.

Data centre-level green storage technology will play a critical role in reducing the complexity, expense, carbon footprint and component waste of the infrastructure that modern data requires. It is no longer just about how much faster we can drive technology, but how we can deliver it sustainably for generations to come.

Chia Ngiang Hong President Real Estate Developers' Association of Singapore (REDAS)

Carbon trading essentially treats carbon as a commodity; and with proper market mechanism, sound regulation and appropriate pricing, it will provide a practical and progressive approach for businesses and stakeholders to contribute towards realising carbon-neutral and reduction goals.

It can be an effective part of a holistic, coordinated and integrated climate mitigation strategy beyond direct regulations and carbon taxes involving the collective actions by governments, communities and businesses.

Carbon trading can create opportunities for businesses to extend their reach and deepen collaboration with their value-chain partners to offer a multifaceted approach to accelerate a systematic transformation to achieve sustainable climate resilience.

Divyesh Vithlani SE Asia Market Unit Lead Accenture

Without a global standard framework and unified data reporting, efforts in carbon trading can be fragmented and lead to disappointing results. Well-defined regulations are important to encourage free carbon trade and efficient monetisation of carbon reduction assets, especially in ensuring that there is no "double counting" of carbon credits which can render many of these transactions illegitimate.

Technology solutions such as blockchain can solve these issues by allowing organisations to verify the quality of carbon credits and their accounting. This allows organisations to utilise carbon assets with greater confidence and legitimacy.

With carbon credit standards still in flux, Singapore can set the gold standard for accounting and verification and become a carbon trading hub in the region.

Justin Gabbani Chief Executive Officer, Asia Lendlease

At Lendlease, we have committed to Mission Zero to achieve net-zero emissions by 2025 and absolute-zero emissions, without offsets, by 2040. We acknowledge that carbon trading can be a useful interim solution while organisations grow capability in transitioning towards a net-zero carbon economy. We believe the most sustainable long-term solution is to reduce greenhouse gas emissions through climate resilient design, smarter and leaner operations and a low-carbon investment strategy.

Our Paya Lebar Quarter development is proof that creating sustainable districts leaves a positive legacy for our cities, businesses, investors, the community and the environment. We see the transition to a world warmed by no more than 1.5 degrees Celsius as a journey that all of humanity is on, and we are committed to collaborating with industry partners to find innovative solutions to meet these ambitious targets.

Mark Billington Managing Director International ICAEW

As there will always be a level of carbon emissions that organisations cannot eliminate completely, carbon trading can offer a viable and cost-effective alternative to help meet emissions reduction targets. Businesses should focus on using projects with transparent, measurable and trackable outcomes.

Carbon offsetting is a part of ICAEW's own journey to carbon neutrality, although we believe that organisations should complement their offsets with other internal carbon-reducing projects. Companies can start by developing a cogent and tailored roadmap to carbon neutrality, then implement other long-term initiatives such as installing energy-efficient lighting systems in office buildings or providing incentives for employees to adopt environmentally-friendly habits in the workplace.

Samer Halabi Executive Vice President KONE Asia Pacific

With the right regulatory framework and multi-layered, market-oriented trading systems, carbon trading can play a critical role in reducing carbon emissions and help mitigate the impact of climate change.

Both public and private sectors need to come together to set in place proper cap and trade schemes that will help the world decarbonise. Some countries are already setting up national carbon trading markets.

Last year, KONE set science-based targets for significant reductions in its greenhouse gas emissions and have carbon-neutral operations by 2030. All of us need to play our part by embedding sustainability in every aspect of our business.

Ari Sarker Co-President, Asia Pacific Mastercard

No matter the industry, we are all in the sustainability business; the future of people, our planet and the economy are inextricably linked. To reduce greenhouse gas emissions in commercially sustainable ways, a number of tools need to be considered - just one of which is carbon trading.

In Mastercard's case, to achieve our commitment to reaching net-zero emissions by 2050, we are collaborating with industry partners to support consumers with their environmental consumption choices; regrowing 100 million trees through our Priceless Planet Coalition; linking compensation for senior executives to Mastercard's ESG priorities (including carbon neutrality); and have issued a US$600 million Sustainability Bond to support these initiatives.

Vincent Magnenat Limited Partner and CEO, Asia Lombard Odier

Today, 80 per cent of the global economy is under some form of net-zero target. The scale and implication of this commitment are unprecedented, and should be welcomed. However, for this commitment to materialise into a net-zero economy, we need practical solutions.

The foundational solution is without a doubt a global, rapid and just transition to decarbonised business models. Energy efficient buildings, renewable energy, recycling and circularity are among the many tools that will enable this transition - a transition that investors should be monitoring closely as it will trigger the rise and fall of economic actors across geographies and industries.

As this transition unfolds, residual emissions that cannot be abated through decarbonisation will require high quality offsets. The launch of Singapore's new carbon exchange and marketplace, Climate Impact X, is an exciting step in this direction.

Ng Wai King Managing Partner WongPartnership LLP

As more businesses commit to net-zero targets, they will be looking for ways to achieve the goals without disrupting profitability. Carbon trading offers an efficient way to reduce their carbon footprint.

To promote a more vibrant carbon trading marketplace, it is important to establish an ecosystem capable of supporting a liquid and transparent voluntary carbon trading market. This includes creating accessibility to high-quality carbon offsets and improving verifiability of carbon credits.

The recent announcement by DBS Bank, SGX, Temasek, and Standard Chartered of their plans to jointly launch Climate Impact X is a welcome step in this direction, and will help foster an efficient voluntary market for carbon trading.

Lee Fook Chiew Chief Executive Officer Institute of Singapore Chartered Accountants (ISCA)

What gets measured gets managed. The upcoming launch of Climate Impact X creates a carbon market in local shores, another significant step towards Singapore becoming a sustainability hub.

The establishment of a pricing mechanism creates transparency for carbon-related assets and liabilities, a catalyst to incentivise businesses to innovate to reduce carbon emissions and prepare for a climate-friendly future. Carbon trading also helps businesses reach their climate goals.

The accounting for carbon credits is an evolving topic; and the accounting requirements should be enhanced to facilitate high-quality, consistent reporting. We continue to engage and encourage the accounting standard-setters to add such a project to their agenda.

Sandy Gwee Principal Consultant Nomura Research Institute Singapore

Clean electrification of road transport is one area where carbon trading can support all stakeholders in the energy transition. An efficient carbon marketplace allows emitters such as non-electric vehicle (EV) makers to transact with low- or non-emitters (EV makers). The demand and supply dynamics will determine a fair price for greenhouse gas emissions, thereby accounting for the full environmental cost of running businesses.

As this cost will be factored into the supply of products and services, carbon trading should accelerate behavioural change in how society consumes. Investments in clean technologies and innovation should follow, enabling a low-carbon or carbon-neutral economy sooner.

Choe Peng Sum Chief Executive Officer Pan Pacific Hotels Group

Today's world has increasingly put businesses into the spotlight to be responsible corporate citizens. Carbon trading is one of the viable options for businesses to play a role in active carbon offset. However, this must be well regulated by trusted organisations with high transparency and governance for integrity and control.

Hence globally, the World Bank, IETA (International Emissions Trading Association) and platforms such as Climate Impact X are critical to provide control, guidelines and act as the reliable partner for businesses to trade.

Sustainability must be holistic. Corporations must ingrain in their business culture a mindset to reduce, recycle and conserve. It must encompass an all-rounded solution including adoption of green technology, sustainable operations and practices.

Zaheer K Merchant Director The QI Group of Companies

Forgive my candour, but carbon trading is merely the innovative packaging and monetisation of greenhouse gas emissions (a real global issue).

Who would believe that an offending entity/country can "buy/trade" credits to the benefit of a privileged few and thereby wipe a slate clean? Stripped to its barest, this is the actuality and nicety of carbon trading. It is an ineffective placebo which ought to be curtailed.

In its place, real world education, actual change, stronger incentives/disincentives via carbon taxes for irregular greening should be legislated, as well as proper treatises, ethical supply chains and streams from the first to last mile created, and direct cooperative world engagement would far better serve the environment. Till then, I suppose we could try sticking plasters on the ozone layer.

David Jacob Chief Executive Officer Marsh Asia

Carbon offset is particularly useful in circumstances where simply reducing emissions is not a viable option. An example is the aviation sector for which the current advancements of sustainable fuels are not mature enough to replace fossil jet fuels. A balanced approach is recommended for quality decarbonisation strategies - reduce one's own carbon emissions, offset carbon emissions and adopt other sustainable practices.

There is increasing expectation from consumers, employees, investors and regulators for firms to take transparent and tangible actions in cutting carbon emissions instead of offsetting. Governance, oversight and due diligence are key for all risk management strategies. In that, it is good to see Climate Impact X integrating mechanisms for transparency and evaluation through satellite monitoring, machine learning and blockchain technology. It is also important to consider risk transfer solutions for offset purchasers and project investors and developers.

Maren Schweizer Chief Executive Officer Schweizer World Group

Tackling climate challenges requires teamwork and a combination of tools.

Putting a price on carbon is essential to drive the technological and behavioural innovation necessary to turn around climate change. Market-based instruments, such as cap-and-trade emission trading schemes, are crucial to price carbon emissions and keep the costs of climate action low.

Each corporation requires a unique strategy to set out the priorities for climate work by avoiding, reducing, and compensating. Well designed carbon trading is one necessary tool of many and can deliver substantial environmental, economic, and social co-benefits.

David Leong Managing Director PeopleWorldwide Consulting Pte Ltd

Carbon trading must be seen separate from the green theme of reducing carbon footprints and greenhouse gas emission. Carbon trading is financial exchange between carbon emitters and carbon reducers by monetising carbon units. The concept of pricing carbon is no different from that of foreign exchange, stocks and shares, commodities and even cryptocurrencies. These carbon traders are likely to trade with profit motives not driven specifically by a mission to reduce carbon emissions and to save the world.

The emitters buy credits so that they can continue their acts of emissions but balancing their carbon scorecards by the credits they purchase. This is still an one-eye open (recognising the climate change challenge with one eye open) and both-eyes-close (provisioning for carbon emitters to continue their climate damaging acts and to buy credits to balance their scorecard) situation.

Carbon trading is therefore not an effective tool to curb greenhouse emissions to maintain climate balance.

Lim Soon Hock Managing Director PLAN-B ICAG

The road to achieving net-zero carbon emissions over the next two to three decades by businesses is likely to be a long one, given that many are ill-prepared or are not giving it the attention it needs, despite the increasing focus on ESG, and the ramifications, such as less or no access to funding by financial institutions and little or no interest from investors, such as Blackrock, that are leading the way on green funding.

Carbon trading, despite some skepticisms, will incentivise businesses to reduce their greenhouse gas emissions. Hence it will also contribute to accelerating the pace at which Mother Earth will need to achieve a smaller carbon footprint to avert many of the problems that will be caused by Gaia's warming.

Given the increased focus on ESG, the pros outweigh the cons. We can therefore expect to see carbon trading taking off as a tool for businesses to reduce their greenhouse gas emissions by pivoting more towards a circular economy, as opposed to the current linear one, where many products are not repaired, recycled or reused, thereby depleting earth resources, and creating more waste and pollution.

Henry Tan Group CEO Nexia TS Group

Carbon credits are the key tool to measure reduction of carbon emissions, sustainability and greening efforts. The ability to earn carbon credits and to trade them for a profit when credits are generated by sustainability practices are key to businesses setting aside time and resources into these areas. Companies that are generating emissions can also find a way to offset them by buying carbon credits. This will clearly put a price tag to the carbon emission and climate impact. So if we use an example that is in limited supply, if we use water, we need to buy water from those who has an abundance of them and over time, this will encourage producing of water or conservation of water as there is a price tag on it. As we strive for net-zero carbon we will be able to put a value to get there. It is important for the world to know the price tag to climate change and global warming target of less than 1.5 degrees C.

Dora Hoan Chief Executive Officer Best World International Ltd

We consider carbon trading as an encouraging tool to reduce and offset carbon emissions. Cost of production is one of the primary concerns of all businesses. With carbon trading - a mechanism to match the overall allocation of allowance with a country's carbon emission target - the number of permits in the market is capped and decreases over time corresponding to the emission reduction target.

Along with the increasing carbon prices and limitations, it puts pressure on businesses to turn to investing in cleaner technology options, and thus lower the carbon outputs.. In addition, the revenue generated from carbon trading could also be used by the government to reinvest in green development projects, offsetting the unavoidable carbon emissions.

Kai-Niklas Schneider Managing Partner Clifford Chance Singapore

With ESG at the top of many boards' agendas, there is a steady and growing interest across different regions and industries in accelerating sustainable business practices. Carbon trading is one such tool allowing businesses to respond to growing pressures to meet their decarbonisation goals without compromising their immediate business commitments.

In a region supported solely by voluntary carbon markets, the success of carbon trading is entirely dependent on the attractiveness of the platform. The introduction of global carbon exchange Climate Impact X in Singapore shows promise in reducing issues of market fragmentation within APAC, with the potential of wider participation fuelling the liquidity of carbon credit. The resultant improvements in trading efficiency, combined with an assurance of high-quality carbon credits, should build the necessary faith required for a voluntary carbon market to be effective.

Alexander Harrison Country CEO, Singapore & Head of Corporate Banking, Asia Pacific and Middle East Barclays

We see the launch of the first trading platform for voluntary carbon markets as a very positive step in the global efforts to reduce greenhouse gas emissions. While direct emissions reductions should be the priority, offsetting could play a critical role in delivering on net-zero targets. The CIX platform will help drive transparency around carbon offsets, increasing quality and accountability in the market and helping direct capital towards financing of carbon mitigation activities. This is especially important in a region such as Southeast Asia, where climate change may have a significant impact on diverse ecosystems.