About Us
IDEAglobal Group was formed in 2008, with the intention of bringing to market two important initiatives in climate change solutions: IDEAcarbon and The Carbon Ratings Agency.
These initiatives represented a leading contribution to the thinking, framework and solutions for climate risk. The main objectives were to generate confidence among institutional investors allowing them to understand the risks and prospective returns in this emerging asset class, encouraging their participation to invest.
A Brief History
On June 25th, 2008, Lord Nicholas Stern launched the Carbon Ratings Agency on the London Stock Exchange, shortly after becoming Vice Chair of the Agency.
The group attracted motivated leading experts, particularly on climate policy and the creation of rigorous tools to measure “environmental returns of Natural Capital “, allowing comparable measurement against the standards used for other major assets such as stocks, bonds and commodities.
Christiana Figueres played a vital role at The Carbon Ratings Agency as Vice Chair of its Ratings Committee for several years, before being recruited as head of the UNFCCC. She led the negotiations that delivered the Paris agreement, being called by the Guardian as the woman tasked with saving the world from global warming'.
Lord Stern authored perhaps the key framework “The Economics of Climate Change”, a benchmark for global policy makers and the private sector to translate climate risk to macroeconomics. The work of our group has made contributions at the cutting edge of the 10-year journey which has now culminated in climate risk being the predominant factor being addressed by the private sector, as evidenced by:
- The Bank for International Settlements (BIS) has concluded that traditional backward-looking risk assessments and existing climate-economic models cannot anticipate accurately enough the form that climate-related risks will take. The BIS has identified "green swan" risks: potentially extremely financially disruptive events that could be behind the next systemic financial crisis.
- Blackrock's Larry Fink saying the climate emergency being the greatest risk since the 2008 financial crisis.
- Singapore's state investment vehicle, Temasek's announcement to be carbon neutral by 2030.
- Monetary Authority of Singapore’s announcement to invest USD2bn in green funds.
- Microsoft testing the carbon economy by announcing their intent to offset all carbon emissions since they formed in 1975.
- And in Davos, climate risk filling the top five spaces in the World Economic Forum's risk report.
Key work:
- Advising the Chief Minister, Narendra Modi and the State of Gujarat, on the shape and key levers of its state climate policy framework. This was partly the incubator for the national climate plan, the Solar Alliance.
- Advising Arnold Schwarzenegger’s G20 Regions Group, creating effective structures and financing frameworks for their regional members to fund projects and actions.
- Advising the United Nations Global Compact’s leading Carbon Pricing Champions on how to set their internal prices on carbon. The Carbon Ratings Agency developed the Geo/Sector Carbon pricing model for UNGC members.
Recent work: Benchmark Climate Risk Solutions
In 2018 IDEAcarbon deepened its focus on benchmark solutions for climate risk. It became an advisor, and subsequently a strategic investor, to Veridium Labs an organisation that has developed a cutting edge blockchain based solution for climate risk, backed by IBM. Together, the solutions we have developed can help scale the speed of the transition to lower carbon portfolio selection at an institutional investor level.
Calculating carbon liability of listed companies
One of the main products IDEAcarbon has helped Veridium develop deals with climate risk. At an enterprise level, it dynamically and comparatively measures risks in real time, combining both consistent data and a uniform methodology. It uses a proprietary harmonised dataset capturing level 3, allows comparison across companies and sectors for the global 1000 listed companies. Investors can force-rank companies in terms of inherent exposure to carbon risk, a central requirement for chief investment officers to adjust towards a more optimal “climate risk resilient” portfolio.
The carbon risk product is in beta stage, and now ready for testing by a select group of institutional investors. We expect our carbon risk product to become an important benchmark solution for investors struggling with multiple ESG standards and by regulators seeking a practical and effective solution for guiding their financial systems to become more resilient to climate risk.
Supplying natural capital assets to institutional scale against carbon liabilities
The second product set is a natural capital backed currency using blockchain, which is being supported by IBM. This is designed to enable “natural capital assets” (grounded in fundamental valuation against the UN sustainable goals) to become tradable in line with other asset classes. The proprietary model we have built is designed to enable the creation of financing vehicles (bonds, leveraged loans, ETF’s, ....) to catalyse the “supply” of scaled, tradable, natural capital assets.
We plan to launch these products with the support of strategic business and platform partners, institutional investors and leading financial centres.
Our three areas for focus 2020-2025
- Climate risk assessment tools and platform
- Natural capital asset structures to supply into the balance sheets of corporations and institutional investors
- Natural capital backed tokens/currency (blockchain based)
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