Bill Winters, chief executive officer of Standard Chartered, at the Asian Financial Forum 2020 in Hong Kong.
Kyle Lam | Bloomberg | Getty Images
A large and “credible” carbon market is needed to transfer hundreds of billions of dollars into assets involved in reducing global emissions, according to Standard Chartered CEO Bill Winters.
Winters chairs the Institute for International Finance’s Taskforce on Scaling Voluntary Carbon Markets, launched by U.N.’s Special Envoy for Climate Action Mark Carney.
The group aims to build a voluntary carbon market to enable corporations to reach net zero emissions, and has suggested that this will need to scale at least 15 times, and potentially 160 times, its current level. These markets allow the trading of emissions allowances and effectively puts a price on carbon.
Speaking to CNBC from the World Economic Forum’s virtual Davos Agenda event, Winters acknowledged that since large companies like Standard Chartered cannot practically reduce their carbon output to zero, they can offset their output by purchasing assets which aid global efforts to combat climate change.
“What that really means is we are going to have to transfer some of our money into the pockets of people that actually remove carbon from the environment, or who can go that extra step in terms of investing in technologies or processes that will reduce the carbon emissions from existing business models,” Winters said.
“We estimate that we will need tens of billions of dollars, eventually hundreds of billions of dollars, to transfer from people like us to people who are actually able to make a difference in terms of affecting the ultimate outcome of carbon emissions.”
A “robust and liquid and credible” carbon market will be necessary to facilitate these transactions between private buyers and sellers over the coming years, Winters said, voicing hopes that this action from the private sector will also help to drive governments toward policies aimed at reducing carbon emissions.
The taskforce is seeking to establish common standards, a verification regime and governance structure to ensure market transparency, and will reveal more details about these efforts on Wednesday.
“We have had to work very quickly to take these ideas and this framework and turn it into an actual market that everybody in the world can participate in with confidence that the money that they are investing is going into the hands of people that are really solving this problem,” Winters said.