K
Kathleen Martin
Guest
With the Paris Agreement being reviewed and countries’ commitments updated at COP26 last November, there’s no doubt that green finance will remain a major topic this year.
At the same time, we’ve seen blockchain technology grow from a fringe and futuristic technology to a powerful tool with many real-world applications, particularly in green finance where transparent and traceable information is critical in measuring and monitoring climate impact.
Here are just some of the ways blockchain technology will revolutionise green finance in 2022:
Digitised monitoring of proceeds in green bonds and loans
New green financial products will continue to emerge over time, but two of the major current products are green bonds and green loans. As regulatory focus on climate change continues to grow, there will be increased demand for the transparency and granularity of these products – which can only demonstrate positive environmental impact if the underlying data is measurable, verifiable and able to be relied upon by third parties.
Today, the monitoring of use of proceeds, underlying asset performance and environmental impact is generally done through periodic manual processes. This leaves the potential for human error and reduces the timeliness of data. These non-digitised data sets are not easily referenced over time and do not fit neatly into future carbon accounting, or ratings and reporting regimes.
While not yet mainstream, we will see increasing use of technology solutions for the monitoring of green bond and loan compliance in the coming year. One of these solutions are blockchain-based systems supported by IoT devices.
These can provide asset owners or operators, investors, lenders, ratings agencies and other stakeholders with verifiable, tamper-proof and real-time data at the asset level. And because this is a digitised process, the monitoring of proceeds can happen at a fraction of the cost and time, which means better financing terms for all.
Continue reading: https://www.eco-business.com/opinion/how-blockchain-technology-will-reshape-green-finance-in-2022/
At the same time, we’ve seen blockchain technology grow from a fringe and futuristic technology to a powerful tool with many real-world applications, particularly in green finance where transparent and traceable information is critical in measuring and monitoring climate impact.
Here are just some of the ways blockchain technology will revolutionise green finance in 2022:
Digitised monitoring of proceeds in green bonds and loans
New green financial products will continue to emerge over time, but two of the major current products are green bonds and green loans. As regulatory focus on climate change continues to grow, there will be increased demand for the transparency and granularity of these products – which can only demonstrate positive environmental impact if the underlying data is measurable, verifiable and able to be relied upon by third parties.
Today, the monitoring of use of proceeds, underlying asset performance and environmental impact is generally done through periodic manual processes. This leaves the potential for human error and reduces the timeliness of data. These non-digitised data sets are not easily referenced over time and do not fit neatly into future carbon accounting, or ratings and reporting regimes.
While not yet mainstream, we will see increasing use of technology solutions for the monitoring of green bond and loan compliance in the coming year. One of these solutions are blockchain-based systems supported by IoT devices.
These can provide asset owners or operators, investors, lenders, ratings agencies and other stakeholders with verifiable, tamper-proof and real-time data at the asset level. And because this is a digitised process, the monitoring of proceeds can happen at a fraction of the cost and time, which means better financing terms for all.
Continue reading: https://www.eco-business.com/opinion/how-blockchain-technology-will-reshape-green-finance-in-2022/
