Investment News

Franklin Templeton funds blockchain for sustainable, green investments

proof of impact

On December 11, Amsterdam-based blockchain organization Proof of Impact said it closed its Series A led by Franklin Templeton. Other investors who participated in the funding round included Ausum Ventures, Crypto Valley Venture Capital and Pangea Blockchain fund. The company did not reveal the investment amount.

What is an “impact event”?

Founded in 2017, Proof of Impact is building a blockchain-based marketplace for investments and donations into projects and initiatives which have sustainable development goals and can be assessed according to an impact outcome. It’s a little like the Kickstarter platform but with a green and sustainability angle.

Proof of Impact is creating a marketplace for “impact events”. This refers to actions such as immunizations, or trees planted, or pounds of waste recycled. Once an event is verified, it is tokenized on a blockchain and can be sold in the marketplace.

Initially, the platform is based on the public Ethereum blockchain, but the organization aims to be blockchain agnostic.

To be able to achieve its goal, Proof of Impact is trying to switch the measurements for investments from outcomes such as lives saved or financial inclusion to instead focus on something that is more immediately measurable but correlated. For example, immunization instead of lives saved or girls educated rather than financial inclusion.

Where possible, the organization also wants to use digital tools for the verifications such as mobile apps which incorporate biometrics for identity, or satellite images to view trees planted. But that proof will need to be more than photos of a scribbled receipt from an unknown third party saying that 1,000 pounds of waste was recycled.

By creating this sort of marketplace, there’s potential to reduce the costs currently spent on middlemen that intermediate investments, and provide far greater transparency and speedier feedback to investors.

“Our client base is increasingly demanding impact returns in addition to the financial returns conventional portfolios offer,” said Roger Bayston, EVP, Franklin Templeton Fixed Income Group. “It therefore made sense to invest in Proof of Impact for its ability to generate impact content in digital form.”

Following the investment, a representative of Franklin Templeton will serve on the Proof of Impact board. This coming January, the company’s co-founder, Fleur Heyns, will be pitching the company at the annual meeting of the World Economic Forum. The blockchain marketplace is expected to launch in early 2020.

Other blockchain green investment initiatives

Earlier this week, Swedish bank SEB, and the German government were involved in the launch of the Green Assets Wallet, a blockchain solution to track the impact of green bonds. Two months ago, the Sustainable Digital Finance Alliance published a whitepaper about blockchain green bonds.

Meanwhile, asset manager Franklin Templeton has previously explored blockchain for other financial instruments. A few months ago, it partnered with wallet provider Curv to store digital assets.

Additionally, Franklin Templeton made a preliminary SEC filing to start a blockchain-based mutual fund for government securities. The company said it would use the Stellar blockchain to record the ownership of the fund’s shares.


Image Copyright: Proof of Impact