- The joint paper highlights carbon market gaps, with a view on how to address market fragmentation and related challenges through legal certainty and international consensus
SINGAPORE – 26 March, 2024 – GenZero, a Temasek-owned investment platform company focused on accelerating decarbonisation, has launched a legal paper jointly authored with leading law firm in Singapore, Allen & Gledhill LLP. Titled ‘The Legal Character of Voluntary Carbon Credits: A Way Forward’, the paper examines the importance of clarifying the legal characterisation of voluntary carbon credits (VCCs) and offers a possible characterisation of VCCs as intangible property in Singapore. It also calls for action by governments to articulate a position.
The paper shares views that VCCs may be characterised as “intangible property”. This is not only supportable by existing legal principles in Singapore, but is also beneficial as it provides market participants with a sound commercial basis to transact and manage risk, especially in the context of:
- Buying and Selling VCCs: Which will enable market participants to confidently claim title to VCCs which they purchase.
- VCCs as Collateral for a Loan: Which will provide certainty to financial institutions on how they can take VCCs as collateral that can be enforceable.
- Trusts, Property, and Insolvency: Which will give clarity to the priority of claims over VCCs in the event of the owner becoming insolvent. The ability to create trusts over VCCs will also enable project development and create a more liquid carbon market.
Further, the paper highlights the pathfinder role that Singapore can play in articulating a position as there is a strong tendency for the ecosystem to converge around jurisdictions where there is a relatively high degree of clarity.
Sim Ting, General Counsel at GenZero, said: “We are pleased to have partnered with Allen & Gledhill on this paper which is aimed at providing a view on the legal characterisation of VCCs. Gaps within the voluntary carbon market limit the ability for market participants to fully leverage carbon markets and unlock its potential for carbon finance. We believe that legal clarity on VCCs will be welcomed by all in the carbon ecosystem, from the financial institutions and investors to the corporates and end-users. Together, we hope that this paper will help galvanise action and cement Singapore’s leadership as a carbon hub that is at the forefront of scaling carbon markets.”
Adrian Ang, Partner and Co-Head of ESG & Public Policy at Allen & Gledhill, said: “We are honoured to partner with GenZero on this paper, which will hopefully inform and start relevant discussions on key ESG topics such as how we can characterise VCCs. With ESG issues continuing to grow in prominence globally and governments looking to implement new regulations to ensure sustainable business practices, it is important that our Firm plays its part in supporting our clients through providing relevant input into vital conversations such as these. We hope to continue contributing to the development of Singapore as a key hub for ESG and will endeavour to continue working with like-minded clients such as GenZero towards this goal.”
To view the full paper, please visit https://genzero.co/legal character of voluntary carbon credits/.
About GenZero
GenZero is an investment platform company focused on accelerating decarbonisation globally. Founded by Temasek, we seek to deliver positive climate impact alongside long-term sustainable financial returns by investing in opportunities with the potential to be nurtured into impactful and scalable solutions.
Driven by a common purpose to decarbonise for future generations, we recognise the need for a holistic and integrated approach to achieve a net zero world. At GenZero, we adopt a flexible investment approach across three focus areas to drive climate impact: (i) nature-based solutions that help protect and restore our natural ecosystems while benefiting local communities and biodiversity; (ii) technology-based solutions that deliver deep decarbonisation impact; and (iii) carbon ecosystem enablers which refer to companies and solutions that support the development of an effective, efficient, and credible carbon ecosystem.
For more information on GenZero, visit https://www.genzero.co/.
About Allen & Gledhill
Allen & Gledhill is an award-winning full-service law firm which provides legal services to a wide range of premier clients, including local and multinational corporations and financial institutions in Asia. Established in 1902, the Firm is consistently ranked as one of the market leaders in the region, having been involved in challenging, complex and significant deals, many of which are the first of its kind.
The Firm’s reputation for high-quality advice is regularly affirmed by the strong rankings in leading publications, and by the various awards and accolades it has received from independent commentators and clients. The Firm is consistently ranked band one in the highest number of practice areas, and has the highest number of lawyers recognised as leading individuals.
Over the years, the Firm has also been named ‘Regional Law Firm of the Year’ and ‘SE Asia Law Firm of the Year’ by many prominent legal publishers. With a growing network of associate firms and offices, Allen & Gledhill is well-placed to advise clients on their business interests in Singapore and beyond, in particular, on matters involving the Asian region.
With its offices in Singapore, Myanmar, Vietnam and China, as well as its associate firms in Malaysia (Rahmat Lim & Partners) and Indonesia (AGI Legal), the Allen & Gledhill network, collectively known as A&G Asia, has over 600 lawyers, making it one of the largest law firms in the region.
For more information on Allen & Gledhill, visit https://www.allenandgledhill.com/.
