Mizuho Financial Group has teamed up with Singapore-based carbon marketplace and exchange Climate Impact X (CIX) to cater to growing demand for international carbon credits among companies in Japan.
Mizuho will invest in CIX, joining its founding shareholders DBS Bank, SGX Group, Standard Chartered, and GenZero, a decarbonization investment platform founded by Temasek.
The strategic partnership aims to facilitate cross-border trading and connectivity between markets, which both companies believe are crucial to resolve imbalances in the demand and supply of carbon credits and help to scale the market effectively.
Carbon credits are one of the primary tools to mobilize additional private financing – at the speed and scale necessary – to help mitigate climate change and build resilience to its impacts. Companies can compensate for their emissions, or contribute to global mitigation efforts, by buying and retiring carbon credits generated from projects that reduce or avoid carbon emissions.
“Through this investment, we aim to provide our customers with reliable and high-quality carbon credits in partnership with CIX, and contribute to the expansion of the carbon credit market in Asia and beyond,” says Masahiro Kihara, Mizuho’s president and group chief executive officer.
Funding from Mizuho will be used to build out CIX’s existing platforms, deepen the company’s offerings for the Japanese market, and ultimately expand its regional footprint. This will allow both companies to better serve customers, especially those in carbon-intensive sectors.
“CIX sees Japan as an increasingly progressive market for decarbonization solutions, including the use of carbon credits. Having a strong partner in Mizuho will allow us to meaningfully serve customers in the market,” says CIX CEO Mikkel Larsen.
“Countries rarely have a perfect match in the demand and supply of carbon credits. Enhanced connectivity is therefore important. We recognize the challenges that many leaders and companies around the world face in decarbonizing; and therefore the potential for international carbon credits to supplement their efforts,” Larsen adds.
CIX adopts a rotational chairperson system, with Bill Winters, group chief executive of Standard Chartered, being the current chairperson of the board of directors.
The investment is subject to shareholder, corporate and regulatory approvals.