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Northern Trust developing digital VCC platform
Ecosystem to allow institutional buyers to access carbon credits from project developers
The Asset 13 Sep 2023

Investment manager Northern Trust has completed the first stage towards an industry-wide voluntary carbon credit (VCC) ecosystem that will allow institutional buyers to digitally access carbon credits from leading project developers.

Project developers transact with buyers of VCCs via an online platform. Legal agreements, the company says, are generated using smart contracts via the Avvoka legal contract tool with the agreement outputs creating the basis of the transaction, driving full straight-through transfer and settlement of the digital credits for fiat currency on the specified settlement date.

This follows the company’s successful completion of fully automated transactions on the initial minimum viable product digital carbon credit platform it has developed with carbon avoidance and removal project developers, including Go Balance, ReGen III and a direct air capture company, in addition to institutional buyers.

The ecosystem uses private ledger digital blockchain technology to connect institutional buyers with carbon credit suppliers who are focused on solutions to reduce greenhouse gases, including carbon dioxide. The fully digital platform allows purchasers to transact tokenized carbon credits directly with project developers and retire these against their carbon footprint.

“This new development from our digital assets and financial markets team represents a significant milestone towards delivering a market-leading platform able to support a diverse range of digital assets,” says Pete Cherecwich, president of asset servicing at Northern Trust. “Allowing institutional clients to access carbon credits, and doing our part to help these firms along their carbon offsetting journey, is important for the future.”

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