DBS Bank, the Singapore Exchange (SGX), and Temasek, all of Singapore, have announced plans to form a collaborative venture to combat climate change.

They’re working together to create the Climate Impact X (CIX), a platform for trading carbon credits.

One of the difficulties with carbon credits is confirming the validity of the projects that underpin them. Some woods were cut down after receiving offset cash, according to a 2019 ProPublica report.

According to satellite images, it uses the example of a forest that began selling credits in 2013, and just half of the land was still forested four years later.

Natural Climate Solutions (NCS), which tries to maintain or restore natural ecosystems such as forests, wetlands, and mangroves, is a type of initiative that CIX intends to focus on.

It will use satellite surveillance, machine learning, and blockchain for transparency to fix some of the flaws discovered by ProPublica.

On a more significant level, the Paris Climate Agreement of 2015 aims to keep global warming to 1.5 degrees Celsius. To do so, we’ll need to reach net-zero emissions by 2050.

Current technologies, like renewable energy, can reduce world emissions by around two-thirds, according to a recent Boston Consulting Group assessment. As a result, investing in NCS initiatives is one of the alternative options.

“Shortly, Climate Impact X will provide a solution for corporations to address unavoidable carbon emissions and will stimulate the creation of new carbon credit projects around the world,” said Mikkel Larsen, Interim CEO of Climate Impact X and DBS Chief Sustainability Officer.

“While the carbon credits will first focus on Natural Climate Solutions, they will also provide momentum to address another significant threat of biodiversity loss and assist local communities.”

CIX plans to offer two services by the end of 2021. One is a standardized carbon credit market aimed at large businesses and institutions, particularly those obligated by law to purchase carbon credits to offset their emissions.

The other is a green project marketplace for firms looking to invest in ESG projects. Both ideas are aimed at businesses rather than consumers.

DBS, SGX, and Temasek have several joint ventures. Bill Winters, the CEO of Standard Chartered, is also the Taskforce chair on Scaling Voluntary Carbon Markets.

DBS’s DBS Digital Exchange for digital assets, SGX is an investor, is one of the other joint ventures. Partior is a joint venture between DBS, Temasek, and JP Morgan for a blockchain-based interbank payments system.

In addition, SGX and Temasek have formed a joint venture to invest in digital assets.

Blockchain technology is widely employed in the field of sustainability. A working group within the Interwork Alliance is dedicated to standardizing carbon credits.

Climatetrade, on a much smaller scale than CIX, has built a blockchain-based marketplace that has attracted corporations such as Acciona, a Spanish renewables provider.