The Green Assets Wallet – validating green bonds and reporting impact

On December 12, 2019, 6 pm CET, the Green Assets Wallet, an innovative blockchain database, where issuers and investors of green bonds meet, will be launched. A co-creation of leading capital market actors, green finance experts and technology innovators, the Green Assets Wallet is a transparent platform for trusted green bond data. Its objective is to unlock greater volumes of credible investment opportunities that deliver green impact.

“After two years of intensive development work, we and our partners are excited to see the Green Assets Wallet going into full service. Underwriters, stock exchanges, development banks, investors and issuers will benefit from the platform,” explains Cecilia Repinski, Executive Director of Stockholm Green Digital Finance, a Centre tasked to accelerate green finance and investment through fintech and co-owner of the platform.

Investments needed to deliver on the Paris Agreement

The ground-breaking platform equips the green debt market with the technology to step up investments needed to deliver on the Paris Climate Agreement and the Sustainable Development Goals (SDGs) and the recently unveiled European Green Deal. “The Green Assets Wallet won this year’s Nordic Ideas Award by Nordea, the largest financial group in the Nordics, for a technology that has both positive impact on society and a solid business value. Reaching Europe’s goal of achieving climate neutrality by 2050 will require a solid action plan on green financing.”

The launch of the Green Assets Wallet has long been anticipated by investors and issuers alike. As financial actors are increasingly calling for competitive investments with positive and measurable impact, the market lacks credible green investment offerings, because of inefficient impact reporting and the absence of reliable and trustworthy validation of the underlying projects. At the same time, there is a significant untapped amount of investible green assets. The Green Assets Wallet will change all this.

According to Ashley Schulten, Head of Responsible Investing for Global Fixed Income at BlackRock, one of the world’s largest asset managers, “compiling and comparing different impact reports can be complicated and time consuming. We see this platform as a way to simplify this process for investors. As the green bond market has led the way for other types of environmental financial products, we hope that this foray into using blockchain for impact metrics can be the start of mainstreaming work around digital tokens for environmental impact and natural capital.”

Injecting efficiency and structure in the reporting of green bonds impact

The Green Assets Wallet offers the market an independent platform, where issuers can showcase investment opportunities and report on deliverables and impact. Meanwhile investors can access and follow up on impact, using best-in-class metrics and links to the SDGs. According to Númi Östlund, Director at AidHedge “there is an untapped potential of investable green projects in Africa. The Green Assets Wallet could help reveal these to global investors.”

As a co-creation with leading green bond issuers, the platform’s design reduces the threshold for new issuers to join the market by cost effectively demonstrating credibility and high impact in their investment offerings. But the platform also supports more established actors, as reporting on impact becomes time-efficient and appealing to investors. “The Green Assets Wallet is an attractive and user-friendly platform to facilitate green bond impact communication between issuers and investors. The underlying blockchain injects trust into the system, which is useful for new market actors,” said Björn Bergstrand, Head of Sustainability at Kommuninvest.

Investors benefit from direct access to trusted issuer impact data in a transparent and attractive format. Until now, even the largest institutional investors in the world have had to collect impact data manually. “The Green Assets Wallet has the potential to help scale up the green bond market, especially in emerging markets,” said Oscar Njuguna, Senior Business Development Manager, Nairobi International Financial Centre Authority.

Driving green investments

“The blockchain is where the critical innovation lies. The trust-by-design blockchain architecture of the platform helps drive green investments to higher impact. The tamper-proof blockchain database offers investors real time and direct access to issuer information and impact reports. “Chromia is a relational blockchain that is very energy efficient since it uses a security mechanism based on a combination of voting and risk,” explains Henrik Hjelte, CEO of ChromaWay.

Next steps

In response to overwhelming market feedback, the Green Assets Wallet goes live as an independent public-private company to attract more resources and better fulfill the scope of scaling up the green debt market. Stockholm Green Digital Finance, a not-for-profit that developed the platform with funding from the German Federal Ministry for Economic Cooperation and Development (BMZ), will remain key owner to guarantee the independence of the platform.

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