New findings from BeZero Carbon, a leading global carbon ratings agency, underscore a burgeoning trend in the carbon market: credits linked to the United Nations’ Sustainable Development Goals (SDGs) are fetching notably higher prices.
In 2023, the data reveals a striking difference in pricing. Carbon credits with SDG-related claims were sold for a 106% premium on the price of those without such claims. This trend has been consistent over time, with an average premium of 31% observed from January 2021 through August 2024.
The price disparity is even more pronounced when considering the carbon ratings of these credits. Credits rated ‘AA’, indicating a high likelihood of achieving a tonne of CO2e avoided or removed, and bearing SDG claims, commanded prices over three times higher than those rated ‘C’ without such claims.
Sebastien Cross, co-founder and chief innovation officer at BeZero Carbon, emphasized the importance of this development. “It is enormously significant that carbon markets are learning how to effectively price the impact of credits beyond carbon, as found by our latest research. Global progress towards SDGs must be made by 2030, yet targets are currently veering off course.
“There is a growing role for carbon markets in stimulating finance to boost advancements towards SDG goals, as corporates are increasingly willing to purchase credits with SDG claims at a higher price. Demand for these credits evidently exists: buyers now want to know that the SDG claims attached to any credit they purchase are robust. Risk analytics on a credit’s associated SDG claims is a vital first step in this journey.”
Keep up with all the latest FinTech news here
Copyright © 2024 FinTech Global
