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Voluntary carbon markets offer enormous business opportunities that counter the massive challenge of climate change. Eddie Listorti, CEO of Viridios Capital, explains here.
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Companies around the globe are turning to voluntary carbon offsets to play their part in helping curb climate change.
Yet only 20% to 25% of the world’s economy is currently pricing carbon emissions via various compliance schemes. This leaves the rest of the global economy unpriced. This is one of the many reasons why the voluntary carbon offsets market is seeing such rapid adoption rates.
Addressing Risk with Voluntary Carbon Offsets
Eddie Listorti, CEO of Viridios Capital, says the number-one undisputed risk the world is facing is climate risk. This risk also transfers to the individual, country, and corporate levels.
He says that, globally, we have an exposure of 125 million tons of carbon per day that need to be hedged. However, the problem is there are only a few instruments that reliably do that.
While that’s a massive challenge the world faces, Viridios sees it as a huge opportunity. That’s why Viridios is focusing so much on voluntary carbon offsets and carbon permits.
A vast majority of the world isn’t pricing carbon emissions. At the same time, the largest corporations in the world have an internal price of carbon they need to manage dynamically while they also work to decarbonize and achieve net-zero emissions.
“I believe carbon offsets have a huge role, a game-changing role to play in addressing this unpriced, unhedged 80% carbon exposure. Yes, there are challenges and some development, but this is what we see as the most exciting asset class and industry of our time, and many angles to participate in as a service provider, like ourselves.”
New Technology for the Voluntary Carbon Market Based on AI
Until recently, the voluntary carbon market has been over-the-counter and opaque. This is where Viridios feels they’ve been able to contribute the most. That is, the company now has in production a valuation and risk engine that uses artificial intelligence.
Through this technology, Viridios can put a fair price on a wide variety of carbon offsets, each of which has different values. The observable data and valuations offering allows the market to perform scenario analysis for financing, feasibility inputs for pricing forward offtake, and trading strategies. Of course, this names only a few use cases.
Why Listorti Finds the Voluntary Carbon Market Exciting
Viridios is also playing a part in pre-trade and post-trade valuations to address and enhance liquidity on the latest voluntary carbon exchanges. But that’s not what excites Listorti the most.
“What excites me … is being able to bring all of our collective skills and participate in the formation of a whole new industry, where new jobs are being created—project developers, research analysts, custodial services, brokers, finance—and to advise investors on an allocation to a whole new alternative asset class.”
Viridios is focused on nature-based carbon offsets, and for good reason. Listorti explains that deforestation contributes more than 10% of global emissions. In addition, nature-based solutions are high impact with multiple co-benefits. Additionally, they are scalable and have credibility with improved methodology from the standards issuing them.
He says that by 2030, more than 40% of voluntary carbon offset supply could be generated just from avoiding deforestation and reforestation-type projects. That’s why Listorti says, “Carbon offsets related to nature-based is the way to go.”
Companies that can’t directly reduce their carbon emissions in their operations turn to carbon offsets to play their part in climate change. And increasingly, they’re focusing on these nature-based carbon offsets.
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About the Viridios Solution
By protecting, restoring, and managing the vital ecosystems worldwide, we’ll be directly reducing carbon on Earth. That’s because these ecosystems suck carbon directly out of the atmosphere.
Viridios’ solution to pricing nature-based carbon offsets is using AI technology to capture all the components of value discovery in the voluntary carbon markets. It’s the most effective solution to complex problems. Moreover, it has been proven in many different sectors.
That’s why Viridios believes in using proven AI technology to harness the until-now-untapped market of nature-based carbon markets.
About Eddie Listorti
Eddie Listorti is the Executive Chairman of Viridios Group and CEO of Viridios Capital. He has a proven track record with 30 years in business and banking. His experience includes managing teams of over 2,000 people and annual revenues exceeding AUD 2 billion. Mr. Listorti has held board positions in industry bodies and joint venture partnerships.
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